With abundant natural resources and workforces, Africa attract multinationals to invest in Agriculture industry. The economic growth of Africa is always the front-runner in the world due to the investments from foreign countries, but this doesn’t efficiently contribute in boosting the government’s  revenue and reducing poverty.

Why? Multinationals would use their offshore shell companies to evade the taxes. The tax incidence on the profit would  shrink the total profit of the company, therefore they could decrease the cost and maximize the profit through evading taxes. As Africa is providing with equal amount of supplies to the international investment companies, but obtain less money from tax; government is not able to improve the living standards of Africans.

According to the year’s Africa Progress Report, Africa annually has a estimated lose of US$1.3 billion on fishery and US$17 billion on logging through unregulated and unreported fishing and logging activities. The evasion of taxes and unregulated profit cause tremendous impact to the economy of Africa;  With transparent investment and taxes, Africa could quickly increase government revenue and get out of impoverished situation. Kofi  Annan, chair of the Africa Progress Channel said, “facilitate tax evasion and, in some countries, corruption, draining Africa of revenues that should be deployed against poverty and vulnerability.”  From the view of economics, the supply curve which represents African supplies is extremely elastic, and this causes the profit to increases a little while the quantity increases tremendously.  A regulation on the transparency of foreign investment to Africa is eagerly needed, in order to control the evasion of taxes and help Africa to be prosperous, otherwise, Africa will still be tangled to step out of poverty.

Picture Reference: <http://www.borgenmagazine.com/wp-content/uploads/2014/04/africa.jpg>

Article Reference: “Africa Progress Panel Calls for Responsible Investment and Business Practices in Africa Share Var Addthis_config = {“data_track_addressbar”:false};.” Africa Progress Panel. Africa Progress Panel, 4 Aug. 2014. Web. 05 Oct. 2014.

The ethic responsibilities of businesses can be as simple as maximizing benefits, however, while businesses are pursing maximized profit, the boundaries between right and wrong will be blurred by their desires. Therefore, the proper ethic responsibilities of the businesses are to maximize the profits of all stakeholders, which include employees, financiers, suppliers, and the community through following the regulations and without violating the rights of others.

In recent years, many irresponsible construction companies maximize their “pockets” through purchasing defective constructing materials and obtaining the rest of the construction funds; one of the most significant catastrophic collapse happened in Bangladesh, the capital of Dhaka in 2013. An eight-floor building collapsed in the morning, killing more than 150 people and injuring over a thousand.

The pursuits of satisfying the companies’ financial desire overthrew the concepts and ideas of moralities and ethic. The boundaries between right and wrong vanished completely. Businesses need to understand the balance of our society and maintain it through following the ethic responsibilities of the businesses, which is about to benefit all stakeholders instead of themselves under the situation of following the regulations and respecting the rights of others; as Freeman said in his theory, the business will be on a decline if it does not figure out and focus on the common interests of each group of stakeholders. Each group of the stakeholders is significantly important to the success of the business.

Reference: Ahad, A.M. “Bangladesh Building Collapse Due To Shoddy Construction” National Geographic. April 25, 2013. Web. 09 Sept. 2014. <http://news.nationalgeographic.com/news/2013/13/130425-bangladesh-dhaka-building-collapse-world/>