Corporate Accountability Priority for AfCFTA


23 June 2023

Compiled by, Brandon T Bande, Christabel C Mhiribidi and Malik Chishuvo (YICA Ambassadors)

Africa, a continent known for its abundant natural resources including copper, gold, diamonds, natural gas, timber among other critical minerals, has unfortunately struggled with widespread poverty despite its wealth.Interestingly ,African countries such as  Zimbabwe, Mozambique, South Africa,Nigeria,Angola,Algeria among others possess valuable resources , yet some of these nations consistently rank among the world’s poorest in terms of per capita income. The World Bank reports that Africa’s GDP per capita and income per person make up a mere 3% of the global total. Additionally, despite the significant extraction of natural resources, the continent’s share of international trade is only around 3%.

Determined to reshape this narrative,Youth Initiative for Corporate Accountability (YICA) ambassadors have decided to come together  recognizing the need to assess and evaluate governance systems and business approaches to reshape Africa’s narrative. With a focus on promoting human rights in the extractives sector and advocating for environmental protection alongside profit-driven enterprises, the YICA ambassadors decided to commemorate  the 2023 Africa Day in a unique manner .Africa Day celebrates the establishment of the Organization of African Unity (OAU) on May 25, 1963, which later transformed into the African Union (AU) in 2002. This occasion symbolizes Africa’s identity and unity. The theme for this year’s Africa Day centereds  around expediting the implementation of the African Continental Free Trade Area (AfCFTA) to bring greater prosperity to the continent. The AfCFTA aims to establish a unified African market for goods and services, facilitate economic integration, foster sustainable and inclusive socio-economic development, and promote industrialization.

Recognizing the significant role of the mining sector in Africa’s socio-economic development and its potential benefits from the AfCFTA, it is essential to address the intersection between human rights, tax justice, and the implications of the trade agreement. To achieve this, young individuals from various African countries, such as Algeria, Zimbabwe, Mozambique, South Africa, and Zambia, came together to discuss these matters.Obert Bore, a Sino-Africa Investments Specialist and employee of the Zimbabwe Environmental Law Association(ZELA), highlighted the importance of youth participation in driving the growth of the AfCFTA. In his presentation ,he also highlighted some of the gaps that hinder the youth and other groups from fully benefiting from the trade agreement. These challenges include power dynamics, limited access to assets and finance, insufficient trade-related information, a lack of trade education and skills, and administrative and regulatory frameworks that do not prioritize the youth.To address these obstacles, the 35th Ordinary session of the African Union Assembly in February 2022 made a crucial decision to include a Protocol on Women and Youth in Trade within the AfCFTA. This protocol  addresses issues such as access to trade information and finance, integration of youth in regional value chains, support for  informal cross-border traders, and facilitation of youth participation in business as traders and consumers. Implementing this protocol will ensure the inclusion of youth in the AfCFTA and enhance their opportunities.This is further highlighted by the 36th AU Assembly theme:Promoting Africa’s growth and economic development by championing citizen inclusion and increased cooperation and intergration of African States.

The Coordinator of the Stop the Bleeding Consortium-Mukasiri Sibanda emphasized the profound impact of illicit financial flows on the African economy, United Nations Economic Commission for Africa estimates that more than $84 billion is lost in illicit financial flows from Africa each year. He stressed the importance of corporate accountability in combating these flows, which pose a significant threat to the effective implementation of the AfCFTA. Sibanda also raised concerns about historical imbalances that affect the progressive realisation of human rights and the need to address them through domestic resource mobilization and value addition of raw materials. He emphasized that collective efforts within Africa, without boundaries, are crucial for achieving these objectives.

Sibanda highlighted the Five Roles of taxation, with revenue raising being the first role. Progressive taxation ensures a fair distribution of the tax burden, contributing to a prosperous and dignified life. The second role is wealth redistribution, where tax revenue is allocated to benefit marginalized communities through essential services like healthcare and education. The third role involves repricing, where taxes discourage harmful behaviors or encourage positive ones. For example, carbon taxes discourage fossil fuel use, while tax exemptions promote clean energy.The fourth role is representation, emphasizing the social contract between the government and its citizens. Taxpayers expect their contributions to be used efficiently, and taxation helps hold the government accountable for resource management. Lastly, there is the role of reparations, acknowledging Africa’s history of exploitation. The youth are encouraged to advocate for reparations, and corporate accountability is crucial to prevent further exploitation of the continent’s resources by multinational corporations.

Sibanda added that taxation plays a significant role in the AfCFTA, as taxes are imposed on intra-African trade. By promoting intra-African trade, the AfCFTA contributes to economic growth, resource value retention, and diversification, expanding the tax base and increasing Africa’s taxable capacity. It also acts as a buffer against illicit financial flows, enhancing tax revenue through value retention.Aligning with the Africa Mining Vision, the AfCFTA can foster transparent and equitable resource exploitation, socio-economic development, and regional value chains. Corporate accountability is crucial for the mineral resource sector to effectively address poverty and benefit mineral-rich communities. Youth involvement is vital in accelerating the AfCFTA’s implementation and holding governments and enterprises accountable. Their engagement contributes to building a peaceful and prosperous future for Africa.

Thus the  African Continental Free Trade Area represents a significant milestone in African integration and development, establishing the world’s largest trading bloc across the continent. Active youth participation and corporate accountability principles are essential for inclusive economic growth. Through progressive taxation and fair resource allocation, the AfCFTA can promote intra-African trade, regional value chains, and socio-economic progress. By holding governments and corporations accountable, the youth can drive positive change and create a prosperous future for Africa. Together, we can unlock Africa’s full potential and reshape its narrative as a continent of opportunity.

YICA’s Call to Action:

  • Mining companies to integrate corporate accountability within their core business  values and operate within the context of those right
  • Mining companies to integrate respect and support for young peoples rights into their core strategies and operations in the implementation of AfCFTA
  • Develop and implement a National Action Plan on Business and Human Rights which is a crucial in maintaining peace and prosperity  as we accelerate the implementation of AfCFTA
  • We call upon members of states in Africa to ensure that there  is development of comprehensive guidelines that prioritise the corporate accountability in the business sector and in particular in the extractives .

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