Nigerian billionaire Aliko Dangote is commonly seen as the acceptable face of Nigerian capitalism, with his many “investments” in the country and charity work. But Oxfam has a different view and has highlighted how Dangote contributes to entrenching poverty in his country in a briefing paper “An economy for the 99%” published today.
The report argues that the wealth of billionaires such as Dangote is rarely self-made, with at least one third of the world’s billionaires’ wealth inherited and another 43% linked to cronyism.
It also noted that once accumulated wealth develops a “momentum of its own”, it allows its owner to seek the best investment advice, dodge taxes and otherwise achieve a rate of accumulation far higher than ordinary savers can obtain.
It goes on to state in the “role of corporations in driving the inequality crisis”: “Tax revenues are critical for funding the policies and services that can fight inequality, and progressive taxes directly shrink the gap between rich and poor. Tax revenues also provide the services that the corporations benefit from, including infrastructure and healthy, educated citizens. However, tax is largely something that corporations seek to minimize. This can be achieved in two ways: through making use of accounting tricks using tax havens and loopholes in the law; or by securing preferential tax agreements and ‘holidays’ offered by various countries. It is estimated that Nigeria loses $2.9bn a year in tax revenues due to tax incentives. One tax policy, for example, states that any individual or corporate investment in publicly owned infrastructure is entitled to claim tax breaks; which last year provided a company owned by Aliko Dangote – the richest man in Africa – with a 30% tax break on a road project. This follows a long history of tax incentives offered to the cement magnate”.
The full report is available here.