The Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, has welcomed the recent declaration by the G8 leaders to tighten the rules stopping multinational companies from shifting profits overseas.
According to the finance minister, the policy would help developed as well as the developing countries.
Okonjo-Iweala said this in an interview with CNN’s Richard Quest at the recently concluded G8 summit held in Northern Ireland.
The minister who stressed that tax evasion was unhealthy for economic growth said: “This was seen as a developing country issue only as seen in the past, issues about tax, transfer pricing issue, getting multinationals to pay their fair share of taxes was seen as a problem for developing countries, but now it has become universal.
“When we are negotiating and making this investment agreement with companies that come to exploit our natural resources, there is often an imbalance in terms of knowledge and information.”
The new push by the G8 for a more open tax system which will compel multinationals operating in developing countries requires tax havens to sign agreement on transparency that will bring about more disclosure on illicit wealth traced to elites and big companies who used such locations as cover up.
The new policy is expected to beam its searchlight on Nigeria, where foreign companies are said to be engaged in naked display of tax avoidance through corrupt practices.
Speaking on the performance of the continent, she argued that the African economy was doing well, adding that the continent is expected to grow at about six percent this year. This, according to her, is far better than the growth in the developed world.
“However, Africans we are not completely comfortable with this growth because it is not creating enough jobs and youth unemployment in my country is high and the growth comes with rising inequality. So it is a growth that comes with challenges, which we must address by finding jobs and growing in a way that creates jobs for our youth. So we must look at sectors beyond natural resources and commodities,” Okonjo-Iweala added.