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  • EU - Africa Summit, Brussels, 2 – 3 April 2014

    European multinational companies are undermining Africa’s development. Africa is making progress in the fight against poverty and inequality, but it is too slow, especially for the 226 million Africans - the majority of them women and girls - who go to bed hungry every night.[1] The European Union has made commitments to fight poverty and increase food security in Africa, such as the Food Security Policy Framework in 2010, but it has failed to prevent some reckless companies from undermining its own development objectives.

    This hypocritical stance hurts the most vulnerable people, who see their land grabbed or find it hard to get fair prices for their produce. At the same time Africans often fail to benefit from the investments of European companies because the companies do not pay the taxes they are due. At the EU - Africa Summit, governments should take action on these two crucial areas where multinational companies are undermining African and international development efforts in the continent.

    Land, agriculture and food security

    Inadequate European policies have incentivised or failed to prevent European companies from buying or leasing large tracts of Africa, often taking plots used by local communities to grow their food and make a living. For example, the European policy on biofuels dictates that biofuels should be part of the energy mix for transportation within the EU. As the EU cannot provide the land necessary for their cultivation, land the size of Belgium has been bought by around 100 European companies sometimes with dire consequences for local communities. Investments in Kisarawe, Tanzania, by the UK company Sun Biofuels and in Ngith, Senegal, by the Italian-Senegalese company Senethanol have displaced and undermined the rights of local communities and farmers.

    European companies and pension funds are also investing in land in developing countries, sometimes for purely speculative purposes.[2] Land held by speculators is often taken out of production and therefore no longer produces food or contributes to the local economy.

    Land is crucial for the survival of communities of small-scale farmers throughout Africa. They rely on it to produce the food that sustains their families. Smallholders produce 80 percent of all food consumed in Sub-Saharan Africa. Most of the African land is worked by women, so empowering and supporting smallholders is a crucial tool to promote gender equality. Land is also a crucial asset which, thanks to its earning potential and intrinsic value, can be used to obtain badly-needed credit.

    In the Manhiça District, Mozambique, smallholder farmers are facing a number of challenges from large agribusiness companies that have targeted the region in recent years. Companies have not only taken land, profiting from the lack of formalization of the customary law and the low levels of awareness about land rights among smallholder farmers, but also put pressure on communities to shift the crops they grow and accept lower prices. As a result, local communities are trapped in poverty - a vicious circle that is only slowly being broken down by increasing awareness and supporting farmers in registering their lands.

    Tax dodging

    Tax dodging by multinational companies in Africa is greater than development aid to the continent. It is depriving African countries of much needed money to pay for schools, hospitals and other essential services.

    The African Union revealed last weekend that between $50 - $60bn a year is lost in Africa solely through the manipulation of trade prices by multinational companies – and this is just one form of tax dodging. Ten percent of the money Ethiopia loses through tax dodging by corporate investors would enrol 1.4 million more children in school.

    Zambia, for example, is an extremely wealthy country in terms of natural resources, but its human development index score is among the 25 lowest in the world. A lot of the money invested in the country by multinational companies is through the secretive world of tax havens to escape taxation.. ActionAid research has shown that Zambia Sugar, a subsidiary of Associated British Foods, siphoned over US$83.7 million out of Zambia into tax havens including Ireland, Mauritius and the Netherlands by exploiting double taxation treaties signed with these countries. This resulted in an estimated loss of US$27 million in public revenues, enough to put 48,000 children in school.

    How do we tackle these problems?     

    European and African countries need to take action to ensure multinational companies do not undermine the African development. . But in an increasingly globalised world where multinational companies have revenues several times larger than many countries and operate across multiple countries and through hundreds of subsidiaries, it is difficult for a single country to tackle the problem effectively. There is a need to adopt a coordinated approach.

    ActionAid calls on European and African governments to:

    • Introduce measures to tackle tax evasion and avoidance. Multinational companies should pay their taxes in the jurisdictions where they do business and make their profits, so that they make their fair contribution to national budgets and expenditure.
    • Refrain from pressuring African governments to sign Double Taxation Treaties that can facilitate tax avoidance and the use of tax havens, and agree to full reviews of existing treaties to eliminate such abuses.
    • Require companies to make their accounts and company structures (including beneficial ownership) public and fully transparent.
    • Protect the rights of African smallholder farmers and put them at the core of the EU-Africa cooperation on agriculture. These rights include access to land, the right to use, exchange and sell their own seeds, access to water and financial resources, and the possibility to provide input into agriculture research so that it respects their knowledge and matches their needs.
    • Acknowledge the need to regulate and monitor the increasing role of the private sector, in land grabs in Africa. In addition, the Voluntary Tenure Guidelines agreed at the Committee on World Food Security should be recognised as the international standard for land issues, and the EU and Africa should commit to support their implementation.



    For more information contact Anna Botsoglou on +32 (0) 473699235 or  

    [2] HLPE (2011). Land Tenure and International Investments in Agriculture. A Report by the High Level Panel of Experts on Food Security and Nutrition of the Committee on World Food Security. Rome.

  • Commenting on the progress report presented today to the African Union finance ministers meeting, Henry Malumo, Africa Advocacy Co-ordinator, ActionAid said:

  • International development agency, ActionAid calls on African Union finance ministers meeting this week in Nigeria to crack down on corporate tax dodging by taking action on harmful tax treaties and tax incentives.

  • Soren Ambrose, Advocacy Manager at ActionAid, said:

    “Today’s proposal fails to match the promises on exchanging tax information made by G8 and G20 leaders last year.

  • ActionAid calls on the international community to leave no stone unturned in seeking a peaceful solution to the Syria conflict that has claimed more than 100,000 lives and left some 9.3 million people in urgent need of aid.

  • Adriano Campolina has been appointed chief executive of the international development agency, ActionAid International.  Campolina, who is currently executive director of ActionAid Brazil, will take over the role on 1 April 2014 and will be based at ActionAid’s headquarters in Johannesburg.

  • Speaking in Brussels today, ActionAid’s Laura Sullivan said:

  • African governments spend an average of just five per cent of their national budgets on agriculture risking even greater hunger across the continent, according to a new report published today by the international agency, ActionAid.

  • Following the COP 19 Climate Talks in Warsaw this week here are ActionAid's closing remarks.

  • Enough is enough.

    We have said we stand in solidarity with the millions impacted by Typhoon Haiyan, and with all climate impacted people. Our solidarity compels us to tell the truth about COP 19 – the Warsaw Climate Conference.

  • Barclays bank is promoting the use of offshore tax havens to big companies operating in Africa, despite saying that it wants to become a “force for good”, international agency ActionAid revealed today.

  • One of the world’s biggest accountancy firms, Deloitte, offered advice to large companies on how to avoid potentially hundreds of millions of dollars of tax in some of the poorest countries in Africa, according to an ActionAid investigation.

  • Six months after the world’s worst garment factory disaster, at Rana Plaza in Bangladesh, victims are still awaiting compensation and suffering from injuries that have prevented the vast majority from returning to work, according to a new survey by ActionAid.

  • As EU ambassadors prepare to meet in Brussels to discuss the future of biofuels and renewable energy policies, ActionAid is calling for them to acknowledge the situation of hunger and poverty in the world and their role in perpetuating it.

  • Coreper meeting on biofuels/ILUC on World Food Day, October 16

  • Cyclone Phailin has caused huge damage in the Indian states of Odisha and Andhra Pradesh with three million trees uprooted and hundreds of thousands of homes damaged, ActionAid said today.

  • Yesterday, prosecutors in Murmansk charged 15 activists and a freelance photographer arrested aboard the Greenpeace ship Arctic Sunrise with piracy.
  • 16 leading organisations call for human rights to be at heart of development goals

    24 September 2013, New York, NY: Today, sixteen leading civil society organisations are calling for the human right to education to be recognised and placed at the heart of the post-2015 development framework by member states of the United Nations.

  • Stamping out tax avoidance and unfair tax deals in the world’s poorest countries must be a key part of the plans to fight poverty after the Millennium Development Goals expire in 2015, ActionAid tells the United Nations.

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