Oxfam has said African countries like Malawi face the risk of long-term social and economic reversal due to an escalating inequality crisis fuelled by regressive tax policies, elite privilege and a wave of austerity measures.
In a report titled Africa’s inequality crisis and the rise of the super-rich released virtually yesterday ahead of the African Union Mid-Year Coordination Meeting in Malabo, Oxfam said that only four African billionaires now control $57.4 billion in wealth, more than the combined wealth of 750 million people or half the continent’s population.
siphoned out. | Nation
The global analysis also singled out Malawi as one of 44 African countries with active International Monetary Fund (IMF) or World Bank programmes that have led to cuts in public spending on education, health and social protection over the past two years to meet debt obligations.
According to the report, Malawi is currently in debt distress and is spending more on repaying creditors.
Oxfam International director for Africa Fati N’Zi-Hassane described the situation as “a policy failure that is unjust, avoidable and entirely reversible”.
She said: “Africa’s wealth is not missing. It is being siphoned off by a rigged system that allows a small elite to amass vast fortunes while denying hundreds of millions even the most basic services.”
While the global report exposes the rise in wealth concentration with Africa’s richest five percent now holding $4 trillion, more than double the wealth of the remaining 95 percent, it also warns that Africa collects just 0.3 percent of gross domestic product (GDP) in wealth taxes, the lowest rate globally.
Reports from Oxfam further show that in just seven years, the gap between the richest 10 percent of Malawians and the poorest 40 percent has increased by almost a third.
In Malawi, where poverty remains entrenched and fiscal space constrained, the findings have prompted renewed calls for policy reform.
Speaking in an interview, Centre for Social Concern’s economic governance officer Agnes Nyirongo said the report has accurately captured the national dilemma: A shrinking aid envelope, rising debt repayments, and a domestic tax regime that burdens the poor while shielding elites.
She said: “Fiscal consolidation should not mean cutting essential services. Malawi must ring-fence funding for health, education and social protection even under tight budgets.”
In an earlier interview, Economics Association of Malawi president Bertha Bangara-Chikadza called for the broadening of the tax base.
On the agricultural reforms, agricultural economists have urged the government to prioritise investment in local initiatives that boost soil health to enhance the effectiveness of social protection programmes such as the Affordable Inputs Programme.
