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Global finance is failing Africa. Time for a progressive carbon tax to fund the Green Transition

Patrick Smith
By Patrick Smith
Editor-in-Chief of The Africa Report.

Posted on Wednesday, 5 January 2022 11:49

Workers set up the photovoltaic panels at the Benban plant in Aswan
Workers set up the photovoltaic panels at the Benban plant in Aswan, Egypt, November 17, 2019. REUTERS/Amr Abdallah Dalsh

Corrupt political and financial elites collude to steal public funds, leaving the poor to foot the bill. Enter the IMF and the debt restructurers, while a generation’s aspirations are put on hold. Meanwhile, there is a huge green financing gap. The time has come for a progressive levy on the 28bn tonnes of carbon dioxide emitted by rich and middle-income countries each year.

Something is rotten in the state of finance. It is failing badly in these frenetic times of climate crisis, pandemics and galloping authoritarianism. And the fallout is producing some unlikely revolutionaries. Take Zambia, where a chartered accountant won an election by standing up for human rights and freedom of the press, and promising to rescue the economy from a corrupt cabal.

Election victor Hakainde Hichilema is too diplomatic to call out the banks that collaborated with venal politicians. But the story has a similar pattern to the hidden loans scandal playing out in Mozambique. Corrupt political and financial elites colluded to steal public funds, leaving the povo with the bill. Enter the IMF and the debt restructurers, while a generation’s aspirations are put on hold.

Pull back the focus for a global view of financial dysfunction – from none other than David Malpass, president of the World Bank and partisan for deregulation and low-tax economies. Under Malpass, the bank has lagged behind the IMF on pushing for debt relief and financing the transition to renewable energy.