World Map in Black and White Watercolor
The Global Financial Integrity (GFI) report estimates that sub-Saharan Africa loses more than twice as much in illicit financial outflows than it receives in aid. According to Kevin Watkins, executive director of the Overseas Development Institute (ODI), transfer or trade mispricing is a practice that facilitates the shifting of profits to low-tax jurisdictions. He explains this practice costs less-developed countries “in excess of $550 billion annually: more than five times annual aid flows.” The lack of transparency in the global financial system facilitates such behavior among multi- and transnational corporations. Tax havens are the favorite destinations for such illicit transfers, which otherwise could have been used to boost economic and industrial development.
According to another GFI report, a conservative estimate for overall illicit outflows from Africa, exempting all other flows in illegal activities from 1970 to 2008, total $1.8 trillion. The 2013 Africa Progress Report, citing the GFI investigation, also puts the average annual loss to Africa from 2008 to 2010 at $38 billion — higher than development aid to this region in the same timeframe. Furthermore…
For more, do read this article titled Africa: Tackling Illicit Outflows on the Fair Observer° platform filed in the Economics section.
Our system needs overhauling, committed leadership, selfless public servant, potent policy, vibrant financial sector is what we need as a continent. My hopes for us to advance our course still minimize but revolution of ideas is what we need now not tomorrow.
Sub-Saharan Africa (SSA) does need to explore ways of making it harder to facilitate illicit transfers. A propagation of positive development oriented ideas is definitely needed.
The greater global financial system facilitates the illicit flows while resisting transparency and accountability through the vehicle of tax havens. This too is in need of an overhaul/revision.
Our leaders are not ignorant of the illicit outflows but the question is what are they doing about it. Result oriented research have been conducted on this topic, how many of the
solutions have be factored into policy making. As per your suggestion there is a need for the spreading of development oriented ideas. These people have big development ideas but they are short term- just to keep them in power. As stated by Chinua Achebe ” the trouble with Nigeria(Africa) is simply and squarely a failure of leadership. There is nothing basically wrong with the Nigerian (African) character. There is nothing wrong with the Nigerian (African) land or climate or water or air or anything else. The problem is the unwillingness or inability of its leaders to rise to the responsibility, to the challenge of personal example which are the hallmarks of true leadership. I think Africa needs effective structures that will curb some of these problems and change of attitudes.
“Leadership is cause; all other is effect” as the old adage goes—so I do agree with you about the importance of good leadership in resolving the challenges facing the continent. Thanks for sharing your thoughts Eva.