Africa generates $400b internally – Ncube
As the economic crisis in Europe deepens and Overseas Development Assistance (ODA) to Africa dips, the continent has been asked to look internally for funds to support development.
Prof. Mthuli Ncube, Chief Economist and Vice President of the African Development Bank has said it is predicted that a one percent fall in global GDP or at least in the OECD will lead to a half percent drop in GDP in Africa.
Prof. Ncube, told journalists in Addis Ababa, Ethiopia that Africa generates about $400 billion annually and therefore the continent should begin to look internally for the necessary funds for development.
He told ghanabusinessnews.com later in an exclusive interview that for every dollar that Africa receives in foreign aid, Africa is able to generate ten times that amount internally.
He argued that Africa has the capacity to generate funds internally, but the full capacity has not been realised yet.
He said one of the sources is tax revenues, adding that, “we know that there are lots of companies and individuals who evade taxes. There is a lot of engineering around taxes by companies within the resources sector and billions of dollars are lost to tax evasion.”
“My view is that we can do a lot in domestic resource mobilization,” he said.
He explained that “domestic resource mobilization also means deepening our financial systems and capital markets, so that we can better harness local savings for the purposes of financing development locally, but that has not been fully tapped.”
He also said Africans in the diaspora contribute about $40 billion annually to the continent adding that Africa can also look at global surpluses from Brazil, Russia, India and China to finance development.
By Emmanuel K. Dogbevi in Addis Ababa, Ethiopia
Listen to the interview from attached audio below.