The loss was recorded between 1980 and 2008.
The continent is reported to be losing $50 billion annually through the illegal activities of rich individuals and multinational companies in the extractive sector mostly in oil, gas and mining.
According to the African Union/Economic Commission for Africa High Level Panel (HLP) on IFFs from Africa report, the multiplier effect of these challenges were loss of jobs, income, decent education, healthcare facilities, infrastructure and other basic needs of Africans.
“Some of the effects of illicit financial outflows are the draining of foreign exchange reserves, reduced tax collection, cancelling out of investment inflows and a worsening of poverty. Such outflows which also undermine the rule of law, stifle trade and worsen macroeconomic conditions are facilitated by some 60 international tax havens and secrecy jurisdictions that enable the creating and operating of millions of disguised corporations, anonymous trust accounts, and fake charitable foundations. Other techniques used include money laundering and transfer pricing,” the report noted.
It is at the backdrop of these glitches that a campaign to battle illicit financial flows from Africa has been launched in Nairobi with a call on African governments to collaborate to stop the annual $50 billion financial loss.
Stop the Bleeding
An interim working group (IWG) of Africa IFF Campaign platform comprising – six pan-African organisations namely Tax Justice Network-Africa (TJN-A), Third World Network-Africa (TWN-Af), Africa Forum and Network on Debt and Development (AFRODAD), the African Women’s Development and Communication Network (FEMNET), the African Regional Organisation of the International Trade Union Confederation (ITUC-Africa) and Trust Africa supported and joined by the Global Alliance for Tax Justice (GATJ), met at the Uhuru Park in Nairobi, Kenya to launch the campaign.
Dubbed “Stop the Bleeding” Africa IFF Campaign, individuals from all walks of life joined in the movement, which is aimed at preventing IFFs from Africa in order to promote development.
Speakers at the launch voiced their frustrations and urged Africans and African governments to collaborate to bring an end to the plundering of Africa’s wealth.
The Chairperson of the Pan-African MPs Network on IFFs and Tax, Ms Khanyisile Litchfield Tshabalala; the Chairperson of the International Trade Union Confederation Africa, Mr Joel Odigie, and the Head of US-Africa Network, Dr Anyango Reggy, gave brief speeches calling for an end to IFFs.
They were unanimous in stating that Africa was not a poor continent and, therefore, deserved better.
Dr Reggy disclosed that the United States of America (USA) was also a victim of IFFs with a loss of $100 billion annually.
A five-kilometre walk through major streets in Nairobi was organised after the launch.
More than 80 individuals joined the coalition in the march aimed at drumming home the need for concerted efforts to protect the African purse and resources.
The procession attracted Kenyan citizens who came out of their offices to catch a glimpse of the march.
Motorists had to give way to the procession, which was under tight security.
The procession began at the Uhuru Park and was rounded off at the same park.
The organisers said the march would be replicated in other African countries.
They also disclosed that the campaign would be sustained until Africa got what it truly deserved.
Meanwhile, a training programme on tax and IFFs organised by the Tax Justice Network – Africa (TJNA) for selected African journalists has ended in Nairobi, Kenya.
Illicit financial flows out of Africa have become a matter of major concern because of the scale and negative impact of such flows on Africa’s development and governance agenda.
The amount lost by Africa through IFFs is approximately double the official development assistance (ODA) that Africa receives and, indeed, the estimate may well be short of reality as accurate data does not exist for all transactions and for all African countries, the HLP report has noted.
Preliminary evidence showed that taking prompt action to curtail illicit financial outflows from Africa would go a long way to provide a major source of funds for development programmes on the continent.
“One of the keys to achieving success is the adoption of laws, regulations and policies that encourage transparent financial transactions,” said the report.
Credit: Graphic Online (Mabel Aku Baneseh)