The adoption of the Sustainable Development Goals (SDGs) in 2015 at a global level and the Regional Indicative Strategic Development Plan (RISDP) by countries in Southern Africa is underpinned by a realization that these plans require vast resource investments for them to materialize. Furthermore, the Agenda 2063 also stresses on the need for domestic resources mobilisation (DRM). While the financing gap to achieve the SDGs in developing countries is estimated to be around US$2.5 - 3 trillion per year, the Agenda 2063 Financing and Resource Mobilisation Strategy (RMS) does not provide such approximate estimates. The RMS instead suggests that 75-90% of DRM will be channeled to finance Agenda 2063.

However, with the global financial crisis of 2008, traditional sources of development support relied upon like Overseas Development Assistance  by countries in the Southern African Development Community (SADC) have diminished considerably and thereby gave rise to another realization;  that these countries have to locally mobilise resources if they are to sustainably finance their development Agenda. This meant that focus had to turn to public taxation and natural resources; the major components of DRM, to raise enough resources to finance their development agenda. DRM in Africa and southern Africa in particular has been hindered and frustrated by Illicit Financial Flows like tax avoidance and evasion, transfer pricing and mispricing, outright criminality, among others, mainly in the natural resources sector. The phenomenon of Illicit Financial Flows (IFFs) has seen Africa lose over $50 billion annually due to these IFFs. Despite the importance of tax in DRM, the SADC region (as with the rest of the continent) is confronted with tax challenges such as: narrow tax bases, reliance on few revenue heads, prevalence of the informal sector, archaic and regressive tax policies, lack or limited capacity etc. These challenges have negatively implied on DRM.

In light of the COVID-19 Pandemic, with so far over 10 million confirmed cases, more than 500,000 deaths globally of which close to 400,000 cases and slightly less than 10,000 deaths are in Africa, the social and economic impact of this public health pandemic on Africa are enormous. COVID-19 has impacted Africa in terms of Health, Trade, and Finance in terms of a decline in Foreign Direct Investments, Remittances and Aid Flows, tourism and increased risk of debt unsustainability and default. According to the World Bank Africa Pulse report 2020[2], the Sub Saharan African Economic growth is to shrink from 2.4% in 2019 to between -2.1% and -5.1 in 2020; the first recession in 25 years. This consequently not only has an impact of decline on the tax revenues to be collected during the same time but also is making fiscal deficits the more likely due to the deterioration in mainly export dependent countries. For Example, mostly hit countries are in Southern Africa which mainly depend on the exportation of natural resources like Zambia, Botswana and Angola. The Tax to Gross Domestic Product (GDP) ratio of countries in Southern Africa was already low due to the persistent challenge of illicit financial flows; this low tax will further be affected by the decline in economic activities like tourism which account for over 10% of the economies of Zimbabwe, Namibia, Botswana, and Zambia among others[3]. The public health measures to contain the spread of COVID-19 that include near total lock down of economies, most of which are predominately informal has also meant that even tax revenue from indirect consumption taxes will reduce significantly due to the fact that people are not spending because of not having money.

The COVID-19 pandemic has therefore laid bare the need for strong universal health care to take care of the sick, equality education capable of responding to global emergencies with innovative solutions (Increased use of technology in fighting pandemics- contact tracing, modified ventilators, etc.), need for strong state led credit finance access to save struggling business and Social Security measures for people to always fall back in terms of temporary or permanent unproductivity in Sub Saharan Africa, Southern African inclusive.  It is however important to note that even before the COVID-19 pandemic, countries in Southern Africa have been underfunding these very critical public sectors, a phenomena most likely to worsen due to the impact of this pandemic. It is therefore imperative that countries in Southern Africa not only continue to enhance their domestic resource mobilisation efforts during this time, but they have to also plunge the gaps in DRM that may have been brought about because of the pandemic.

In response to the Covid-19 situation, governments have tried to use tax policy in form of reducing income and Value Added Tax (VAT) rates for businesses and individuals, extended tax revenue payment deadlines, provided tax holidays for persons manufacturing   covid-19 prevention related products like sanitizers and mask among others. All these measures have meant that governments have to forgo tax revenue in the short term through this measure. This however does not take away governments’ responsibility to provide gender responsive public services and therefore still needs resources to do so. There have been calls to suspend or even cancel sovereign debt due and payable in 2020 by countries in Africa so as to free up some resources for these countries to promptly and adequately respond to social and economic impacts of the COVID-19 pandemic. These calls have, to some extent, been partially successful as the IMF[4] and G20[5] countries have agreed to suspend debt payments for poor countries (Southern Africa Countries inclusive) thus freeing up to $25billion[6]  to allow them to deal with the pandemic.. The IMF has gone no to also provide some concessional loans to poor countries to further have the money to deal with it. These are commendable steps in the short term but need review and change to more sustainable solutions like permanent cancellation of suspended 2020 debt among others. However, the contraction of loans to deal with the Covid-19 may be detrimental to African economies given that the vast majority of these countries are already in debt distress.

Youth are one of the most adversely affected population demography by the COVID-19 pandemic. Besides the fact that there are as many young people falling sick and dying of COVID-19 like there are old people, most school-going young people have had their studies interrupted for almost a full academic year, those working in the informal sectors, especially the service sectors have also had their livelihoods decimated due to the public health guidelines like lockdowns of the various economies in Southern Africa, with many losing their jobs. Furthermore, young people working in mining and other manufacturing enterprises have continued to be highly exposed to the Corona Virus by working without protective gear. Also, youth have also suffered the social impacts of the pandemic like increased gender based violence, mental health issues, lack of social security and high dependency levels among others. It is a notorious fact that youth form the majority of the populations in Southern Africa and therefore not only have a vested interest of defeating COVID-19 but also defeating it in a manner they will not affect the domestic resource mobilisation efforts of their countries both in the short and long term. This means young people have to engage their governments both at a national level and SADC Level through legal, civil and political processes to influence responsible and sustainable domestic resource mobilisation in these trying times. This demands that youth have a say in key decisions about sovereign debt, tax incentives, transparency and accountability commodities, budgetary process and natural resource revenue management more than ever and must do so.

It is from this background that Youth for Tax Justice Network (YTJN) in partnership with African Forum and Network on Debt and Development (AFRODAD) is organising a series of Virtual Policy Villages to empower youth in southern Africa to have a say in the way youth can support and challenge their governments to not only promote DRM during the COVID-19 pandemic, but to do so in an efficient and sustainable way. The first of these Virtual Policy Villages will be a webinar meeting under the theme Domestic Resource Mobilisation in the Era of COVID-19: Opportunities and Challenges for Youth Engagement in Southern Africa to be held on the 02 July 2020 from 10am to 12am SAT. The Virtual Policy Village will target youth leaders, civil society and government agencies, members of parliament and SADC Youth Forum in Southern Africa.

Objectives

  1. Highlight the salient tax justice issues affecting DRM during the COVID-19 pandemic;.
  2. Making DRM relevant to ordinary people, especially young people, reflecting the voices of real people.
  3. Strengthening and diversifying the tax justice movement; by bringing the fight against COVID-19 and promotion of DRM closer together.
  4. To mobilise young people to play effective roles in ensuring that natural resources are extracted in a sustainable manner and that they contribute to meaningfully broad-based development.

Anticipated Outcomes

  1. Advocacy action for fair tax, responsible debt accrual,  budget reforms and effective natural resource revenue utilization that take into account youth needs and development and national and SADC level.
  2. Increased level of youth-leaders’ awareness with a positive impact on youth tax/budget advocacy.
  3. Strengthened Multi-sectoral youth platform for engaging and advocating for policy reform towards enhanced domestic resource mobilisation.

Targeted beneficiaries

  1. Youths.
  2. policy makers.

Anticipated Outputs

  1. Media Statement about the YPV session and a commitment of future actions youth leaders and policy makers will undertake to influence tax policy reforms towards enhanced DRM during the COVID-19 Era.
  2. A youth opinion brief. This brief will contain opinions of the youth and youth leaders present about the current tax systems and what needs to change. It will inform further research and future engagements.
  3. Commitments from Duty Bearers present about not only adopting gender responsive budgeting and revenue mobilisation efforts but also providing young spaces to inform and influence tax policy formulation and implementation towards enhancing DRM
  4. A Social Media Campaign to popularise the opinion brief and other highlights of the VPV session.
  5. A road map to future youth engagements on enhancing gender responsive tax system and budgeting.

Key Deliverables

  1.  Media coverage materials of the events.
  2. Activity report.

[1] World Health Organisation COVID-19 Situation Report -114

[2] https://openknowledge.worldbank.org/handle/10986/33541 , Accessed on 13th May 2020

[3] ibid

[4] https://www.imf.org/en/News/Articles/2020/04/13/pr20151-imf-executive-board-approves-immediate-debt-relief-for-25-countries Accessed on the 13th May 2020

[5] https://www.worldbank.org/en/news/factsheet/2020/05/11/debt-relief-and-covid-19-coronavirus , Accessed on 13th May 2020

[6] https://www.reuters.com/article/us-health-coronavirus-g20-statement/g20-countries-agree-debt-freeze-for-worlds-poorest-countries-idUSKCN21X29A Accessed on the 13th May 2020

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