Oxfam report warns of danger ahead as gap widens between rich and poor
In 1990, just one in 10 people living in extreme poverty around the world lived in Africa. In 2024, it was seven in ten. Since 2020, the number of people living in extreme poverty on the continent has risen by over 40 million.
Meanwhile, at the dawn of the new millennium, in 2000, Africa had no dollar billionaires. Today, it has 23. In just the past five years, the combined wealth of Africa’s billionaires has surged by 56%, reaching US$112.6 billion.
The four richest African billionaires alone now hold more wealth (US$57.4 billion) than half the continent’s population–750 million people–combined.
That is part of the data in the latest report released on July 10 by Oxfam International; the British NGO dedicated to highlighting bad practices that contribute to global poverty.
“The current trajectory tells us that inequality is on the rise, and if we don’t do anything, Africa is headed for an unstable future. Evidence shows that unequal societies are very unstable.” said Kwesi Obeng, the Accountable and Inclusive Governance Lead for Oxfam-Africa who presented the report.
“People are unhappy,” Obeng said, “And we know from what’s happening that our young people who are the backbone of our economies will move elsewhere to find a source of livelihood.”
Obeng added: “We do know that just taxing the wealth of the richest 1% would generate such a significant amount of money to allow our governments to invest in tackling inequality,” he said.
“The inequality in Africa is the result of a policy failure; it’s the embodiment of a moral crisis. Right now, there are millions of fellow Africans struggling with hunger, with unemployment, and the impact of climate change,” said Fati Nzi-Hassane, the Regional Director, Oxfam-Africa, during the unveiling of the report.
“Meanwhile there’s a small elite that continues to grow richer and more powerful and protected from fair taxation. This growing gap is tearing down the fabric of our societies, holding back progress and breeding instability,” she said.
A broken system that punishes the poor
Oxfam’s latest report focuses starkly on inequality in Africa. It reveals that the poor are not just overburdened–they are emblematic of a system that punishes the poor while protecting the rich.
It gives the example of Christine Aber, a poor woman who, for over 10 years, has been selling millet flour, rice and soya at a stall inside the main market of Gulu City in northern Uganda. Aber, who was widowed in 2003, has been managing to fend for her family and pay tuition for her son through university.
She says in a good month, she makes about Shs 300,000 (about US$80) in profit. But out of these earnings, she must surrender more than Shs 135,000 including Shs 4,000 she pays daily in market dues and another Shs 13,000 she pays monthly to retain her stall in the market. These payments–mandatory and non-negotiable–consume nearly half of her income.
Aber doesn’t pay income tax. Like most informal traders in Uganda, she’s off the Uganda Revenue Authority (URA) official tax register. But every day, she’s taxed–through local levies, market fees, and high prices driven by value-added tax. In fact, her tax burden – in proportion to her income- dwarfs what some of Africa’s wealthiest corporations and billionaires contribute.
According to the latest report by Oxfam, Aber pays a higher share of her income in taxes than many African billionaires pay on their profits. Oxfam’s report was published on July 10 and is titled, “Africa’s Inequality Crisis and the rise of the super-rich.”
While Aber’s tax rate hovers around 44%, multinational corporations operating in Uganda and across the continent often pay less than the official corporate income tax rate of 30%, thanks to generous exemptions and loopholes. Some pay next to nothing. The experts at Oxfam say this is not a virus in the system; it is the system.
Christine Aber’s case underscores how deeply regressive Africa’s tax regimes have become. Instead of taxing wealth and profit at the top, most African governments lean heavily on consumption taxes like VAT–levies on everyday goods that disproportionately affect the poor. For every dollar collected from income and profit taxes, African governments collect more than two dollars from VAT and other indirect taxes, the report notes.
What makes this even more unjust is that Aber’s demographic–informal traders, the majority of whom are women–bears the brunt of this imbalance. The tax system is not just regressive; it is gendered, notes the report.
As a matter of fact, wealth in Africa is overwhelmingly held by men–three times more than women–while working-class women carry a disproportionate burden of indirect taxes.
Rich men, poor nations
While Aber counts coins to pay her daily dues, the continent’s four richest men collectively own more wealth than half of Africa’s 750 million people. Since 2020, the wealth of the continent’s dollar billionaires has soared–by 56%. The five richest African billionaires alone saw their wealth grow by 88%. Meanwhile, the average income for Africa’s bottom 50% has either stagnated or shrunk.
Oxfam’s report reveals that Africa’s richest 1% are now earning five times more than the bottom half of the population. The richest 0.02%–Africa’s dollar millionaires–own nearly 20% of the continent’s wealth, while the bottom half owns less than 1%.
The report notes that inequality is actually widening in 41% of African countries, and extreme poverty–once a global problem–is becoming an increasingly African one.
“Africa’s wealth is not missing-it’s being siphoned off. Governments across the continent continue to slash budgets to public services like education, health and social protection, while shielding the wealthiest from fair taxation, imposing some of the world’s lowest wealth taxes on the super-rich,” Francis Shanty Odokorach, the Country Director – Oxfam in Uganda told The Independent.
“This rigged system allows a small elite to multiply its fortune, while hundreds of millions of people are denied the most basic services. This is not misfortune. It’s a policy failure – and it can be reversed,” added Odokorach.
Afrobarometer sampled opinion of African citizens recently, and in their 2024 data, it shows that many African citizens, close to 80%, feel that African governments are not doing enough to tackle inequality. That injustice is felt in crumbling clinics, overcrowded classrooms, and empty stomachs.
Since 2022, African governments have slashed funding to education, health and social protection–often to meet debt repayment obligations to the International Monetary Fund (IMF) and the World Bank. In 2023-2024, 94% of African countries with active IMF or World Bank loans (44 out of 47) cut public spending in those critical sectors.
This austerity undermines the African Union’s own target of reducing inequality by 15% over the next decade. Hunger is rising too–with nearly 850 million Africans experiencing food insecurity, 20 million more than in 2022. “African citizens see and they know that their governments are not doing enough and actually can do better,” said Obeng.
Extracting profits without paying taxes
The Oxfam report says income inequality in Africa is not a glitch–it’s by design. Global financial architecture allows multinational corporations to extract profits without paying their fair share in taxes. Oxfam notes that cronyism, monopoly protection, and state-sanctioned tax incentives have enabled billionaires like the Nigerian tycoon, Aliko Dangote, to pay just 2% in effective taxes, even as his companies report massive profits.
In Nigeria, tax breaks to six top corporations cost the government 5 trillion Naira–18.5% of the national budget–more than what is allocated to basic services for millions of citizens.
Meanwhile, austerity policies imposed by institutions like the IMF have seen governments slash social spending, weakened labour protections, and introduce even more regressive taxes–triggering unrest, as seen recently in Kenya and Angola.
Africa’s inequality report was unveiled at the same time African leaders met in Malabo, the Equatorial Guinea capital, for the African Union mid-year coordination summit. Speaking from Malabo, Joël Akhator Odigie, the Secretary General of the African chapter of the International Trade Union Confederation (ITUC-Africa), said African governments must make pragmatic policy decisions to end what has been clearly identified as “government failures.”
He listed tackling public debt servicing, illicit financial flows, social protections, minimum wage payment, expanding the tax base through job creation, and paying more attention to women and the elderly in society.
“If we must fight poverty, we must deal with the issue of minimum wage,” he said, “No society can do well when we continue to pay stagnation, slave, and poverty wages. We must be able to finance social protection.”
He said a government that, rather than pay and put money in basic health care, continues to use this money to service its huge debt profile, causes more poverty. “The situation where we have a huge debt overhang on our continent is unsustainable; a situation where the very stupendously rich are still giving concessions and do not pay taxes is not a society that is just. We need to see a reverse in this.”
Tax the rich class
The report notes that Africa’s billionaires could each afford to lose 99.9999% of their wealth and still be 56 times richer than the average African. Meanwhile, one in five Africans lives on less than US$2.15 a day. The richest 5% of Africans–a fraction of elites–hold nearly US$4 trillion, more than double the wealth of the remaining 95% of the population.
Kwesi Obeng said across all the 55 countries on the continent, inequality is not only rising, it’s accelerating very quickly. “We’ve seen a tiny clique continue to see their wealth expand exponentially. That is unsustainable for a society like ours,” he said.
Obeng argued that although one of the points African governments consistently make is that they don’t have the money to invest in public services, this narrative can change if they, for instance, taxed 1% of the income of their richest citizens.
Obeng said close to half of the continent’s population of 1.4 billion people face food insecurity, from the Sahel all the way to Malawi, from Senegal to Ethiopia.
He says that by reducing inequality by just 2%, accompanied by an annual economic growth of 2% would actually end extreme inequality in Africa. “It would be 24 times faster than if we remain on the current trajectory,” he said.
On average, African governments score the lowest on the commitment to reducing inequality index, which measures over 160 countries around the world. According to the report, 25 of the bottom 30 countries on the global commitment to reducing inequality index are African. Nigeria, Ethiopia, and Democratic Republic of Congo sit at the bottom of the index.
A choice between two futures
Despite the bleak outlook, the report offers a roadmap: By taxing Africa’s richest an extra 10 percentage points on income, and 1% on wealth, could raise US$66 billion annually–enough to fund free, quality education across the continent, provide universal electricity access to homes and businesses, and still leave US$2 billion to spare.
Seychelles, Botswana, Lesotho and Namibia are showing that inequality can be reduced with political will and progressive policies. Investments in public healthcare, education, and targeted welfare programmes have helped shift the needle in these nations.
The African Union has now set an ambitious target: reduce inequality by 15% over the next decade. Some countries are already proving this is possible. Seychelles, for instance, has reduced inequality significantly since 2000: the income share of its poorest 50% has grown by 76%, while the richest 1% have lost two-thirds of their share. Seychelles also offers universal healthcare and free education to all citizens.
Morocco and South Africa also collect 1.5% and 1.2% of GDP in property taxes respectively–far above the continental average. But these are outliers in a continent still captive to elite capture, external debt, and neoliberal orthodoxy.
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Francis Agbere, the Economic Justice Lead at Oxfam in Africa says although Oxfam is not privy to all the effective tax rates across all African countries, what the non-profit knows is that a lot of the tax rates for the rich are very low.
Agbere says on average, the tax rate on capital gains tax is taxed at 19% while taxes on personal income is taxed on average at 33%. He adds that two-thirds of African countries do not tax inheritance at all.
He says there are 8,320 Africans that each own US$ 5 million or more who are expected to pass on a total of US$214bn in wealth in the coming decade through inheritance and gifts.
“Africa is the region where taxes collected from wealth is the lowest as a share of GDP, at just 0.3% and yet taxing the richest 1% has transformative potential even at low rates,” he said. “The richest will hardly notice a 1% tax on their wealth. But, for Africans who currently pay VAT and other taxes, these can entrench poverty and hardship. We need to tax where the money is and that is among the super-rich.”
It’s not a crime to be rich
“It’s not a crime to be rich but our report shows that currently the richest Africans typically do not pay the taxes that they are legally obliged to pay,” adds Christian Hallum, a senior tax specialist at Oxfam.
For example, he says, the report shows that only 1 in 5-dollar millionaires in Rwanda filed a personal declaration in 2018 while more than 99% of Nigeria’s super-rich were found to be non-compliant with their tax obligations in a recent government commissioned study. “Out of the approximately population of 115,000 high net worth individuals, the study found only 40 were compliant or just around 0.035% of the super-rich.”
Christine Aber’s voice, Africa’s call
Back in northern Uganda, Christine Aber may not speak in economic jargon. But her life is a daily negotiation with a system that is failing her. She knows she pays too much in taxes. She knows that politicians talk about development while market stalls rot in the rain. She knows her son’s university fees grow faster than her profits. She may not be famous, but her story mirrors millions. In her struggle is a question for African leaders, economists, and the global community: For whom exactly is Africa being built–its people or its elite?
“This report is a clear wake-up call that delivering economic and social justice can’t be kept pushed down the road. If there’s ever a better time to act on the promises to reduce inequality in Africa by 15% by the next decade, it’s now,” said Nzi-Hassane.
“If African leaders are serious about their own commitments, they must stop implementing policies that only benefit the few and they must start building economies that work for everyone.”
Oxfam also wants African governments to implement their policies that they have voluntarily set up to reduce inequality. “Many of our countries have really beautiful policies on their books; addressing inequalities and gender gaps in the workplace and yet, these are not implemented. And even when they have the policies, they do not devote the financial resources that would allow the government agencies to be able to carry these things out,” said Obeng.
