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 UN 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,” saidJoel 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% 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 U.N. 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 inAddis 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.