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Senegal's President Calls for African Tax on Oil Profits


Senegalese president, Abdoulaye Wade, is calling on Africa to renegotiate its economic relationship with the rest of the world. A major part of Mr. Wade's plan is to redirect oil profits into development projects.

In a news conference Monday, Mr. Wade called on Africa to create a mechanism to tax oil company profits and redistribute the money continent-wide.

Wade says record oil profits are immoral because of the high rates of poverty in Africa.

He says his so-called "Wade Formula" would take effect when prices rise above $29 a barrel. That figure, he says, would leave companies with a 20-percent profit on operations, but generate over $235 billion for development.

A key part of the proposal also calls on countries rich in fossil fuels to share revenues with non-producers on the continent.

Otherwise, Mr. Wade says, unequal distribution of wealth and development would create regional instability.

The 80-year-old leader says it is in companies' best interest to share profits. He cited the case of Nigeria, where poverty in the Niger Delta has fueled sabotage and hostage-taking at oil drilling sites.

Wade is usually known for his liberal, free-market ideology. But last month in The Washington Post, he blamed high energy prices for undermining economic growth in sub-Saharan Africa.