When Vince Cable MP, the most vociferous proponent of the mansion tax in UK, described mansion tax as the most sensible way of taxing wealth; only few people could disagree with him. In austere times like this, the best way of achieving fairness in taxation is to get the well-off to bear a greater part of the tax burden.
My agreement to this tax policy, however, extends to the continent of Africa where the gap between the rich and the poor is so wide and has shown no signs of narrowing. Let's be clear, mansion tax in this case is the annual levy on properties above a particular threshold. (Not to be confused with mansion tax in parts of the US, which is the equivalent of stamp duty in the UK).
Travel through the major cities in Africa, from Lagos to Johannesburg, what confronts you is the co-existence of affluence and extreme degradation. A big juxtaposition. The affluent areas are not difficult to notice. Tall walls and huge gates dotes the landscape. The consequence of poverty is laid bare in the shanties.
However, the reason for my calling for a mansion tax is not for bridging income equality. Frankly, its effectiveness in tackling this type of inequality is limited in this context. The aim,however, is for this wealth tax to provide enough funds to tackle the current scourge in African countries, youth unemployment.
In the speech delivered to The Times CEO Africa Summit held in London this week, former president of Nigeria, Olusegun Obasanjo, likened the worsening case of youth unemployment to sitting on a 'keg of gunpowder'. To be fair, this is the case throughout Africa and not only Nigeria. Globally, youth unemployment is a problem. The situation is bad in Europe, highlighted by the statistics in Spain and Greece.
Africa's youth unemployment is all the more worrying because of its demography. Because of the low life expectancy rates in Africa, young people make up a large percentage of population. In same cases up to 70%.
The next decade as being described as the decade of Africa and rightly so. Seven out of the ten future growing economies in the world are in Africa. So there is a once-in-a-lifetime opportunity for Africa to put its house in order. Inadequate educational policies need to be upgraded and proper attention should be paid to this.
The smart way to pay for this is a wealth tax of some sort (ideally a mansion tax). I have earlier described the affluence that exists in some African cities in the midst of degradation. The taxation system is heavily skewed towards income and with large informal sector, a lot of this tax goes uncollected. A wealth tax would put paid to increasing wealth disparity and proceeds would be enough to solve most of the problem of youth unemployment.
The choice before African leaders is clear, tackle this scourge of youth unemployment and enter into the next decade confident. Or do nothing. Lessons from history tells me they would do the latter. The young people are hoping they will be bold and do the former.