Stop Africa's illicit outflow, campaigners say

Nairobi - Africa can create jobs, improve social services and cut poverty if its governments can stem the $50 billion a year lost in illicit outflows, mainly through multinationals, campaigners said on Thursday.

"Africa is bleeding," said Tendai Murisa, executive director of Trust Africa, a development organisation based in Senegal. "We are tired and we have had enough."

If illicit financial outflows were retained in Africa, the world's poorest continent could improve its people's health, education and incomes, six pan-African lobby groups said at the launch of a campaign 'Stop The Bleeding'.

A U.N. panel led by former South African president Thabo Mbeki has estimated that the $50 billion a year Africa loses in illicit outflows is double the official development aid that flows into the continent.

The campaigners said that crackdowns on tax evasion and illicit financial flows and improved tax collection in developing countries would raise more money than any likely increase in foreign aid.

"The idea is to build huge pressure from below, people's pressure from below, that can force our governments to begin to think differently," said Joel Akhator Odigie, coordinator for the International Trade Union Confederation-Africa.

"This so-called overseas development assistance is money that is coming in reverse... When you trace its origin, much of it is coming from our continent."

Over the past decade, Africa has enjoyed strong economic growth of around five percent a year, but much of this has failed to benefit ordinary people.

Multinationals, particularly those working in the oil, gas and mining industries, account for 60% of the lost revenues, the campaigners said.

Criminal activities such as trafficking and poaching account for 30 percent of the total and corruption for 10%, they said.

Multinationals often shift their profits to countries with low or zero tax rates and arrange payments between parent companies and subsidiaries to hide revenues and lower their tax bills, the UN panel said.

African governments should stop offering multinationals tax holidays and incentives, and negotiate mining agreements at a regional level to ensure better terms, Murisa said.

World leaders will discuss ways of raising trillions of dollars to achieve 17 Sustainable Development Goals at a development finance summit in Addis Ababa in July.

The goals, due to be adopted by the United Nations in September, address a wide range of issues from healthcare for all, to education, water, energy and protecting the environment.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders