Africa loses $85bn in ‘illicit flows’ – Dlamini-Zuma

2014-08-06 09:17

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Africa loses more money in illicit flows from the continent than it gets in aid, and multinational companies were responsible for most of this, African Union Commission chairperson Nkosazana Dlamini-Zuma has said.

Dlamini-Zuma told delegates at the United States-Africa Business Forum in Washington DC yesterday that “Africa loses in excess of $60 billion (R645 billion) every year” due to that practice.

Multinational corporations were responsible for more than 60% of these illicit transfers, while only 30% was due to organised crime and 8% due to corruption.

“Put in context, the amount lost in illicit capital flight out of Africa every year is higher than development aid,” she said.

Dlamini-Zuma said Africa needed a growth of more than 7% “in order to double incomes and eradicate poverty in one generation”.

Over the last decade, the continent has recorded sustained growth of more than 5% in resources sectors as well as in infrastructure and consumer sectors.

She said the continent’s most precious resource “is its over one-billion population, the majority of whom are young, and more than half of whom are women”.

She said it was critical to invest in their health, education and access to basic services.

US Vice-President Joe Biden gave African leaders the assurance that the US was putting in place regulations that prevented the continent from being used to harbour money earned from corrupt practices.

“Africa’s riches shouldn’t be stolen under the cover of darkness, but the continent should be enriched under the rule of law,” he said.

Biden, who earlier met with President Jacob Zuma about issues such as the renewal of the Africa Growth and Opportunity Act, said he had joked with Zuma that, as a “30-year-old kid” when he was first elected into the US Senate, he was trying to get businesses from disinvesting in apartheid South Africa.

“Now I have to get them to invest in South Africa,” he said.

US President Barack Obama yesterday announced almost $33 billion of investments in the continent, mostly from private sector companies. He said this would help create jobs in Africa as well as America.

» City Press’ trip to the United States was partially funded by the US Embassy.

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