Africa lose US$150bn annually through illicit deals

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By Jeff Kapembwa

Lusaka - An average of between US$50 billion and US$150 billion is being shipped out of Africa in Illicit financial flows (IFFs) because of flawed and inadequate legal and institutional capacity, a vice retarding the continent’s growth despite abundant mineral, human and natural resources, Zambia’s President Edgar Lungu said last week.

President Lungu envisions an Africa harnessing industrialisation in collaboration with the private sector, international partners, and north-south and south-south co-operation to meet the developmental needs of its people, many of who are living in squalor.

Addressing the just-ended 74th United Nations General Assembly in New York recently, President Lungu noted with awe, how Africa was being robbed of resources yearly through IFFs.  

Unless it is nipped in the bud, the robbery of Africa through IFFs has potential to continue depriving the continent’s immense proportions of its resources and finances at the expense of economic development.

Regrettably, many countries lacked adequate legal and institutional capacity to counter the scourge, and failed to recover and return the stolen assets and proceeds to countries of origin. This is despite concerted efforts to effectively combat the vice at national and regional levels, a setback Lungu regretted.

This, he noted, would be a reversal of the expectations of the international community to see a progressive continent and to finance sustainable development when immense proportions of its finances were being shipped out of Africa.

“It would be unrealistic for the international community to expect progress to particularly harness the needed resources to finance sustainable development when for instance, immense proportions of the finance estimates ranging from US$50-US$150 billion, are lost annually in Africa alone through the scourge of IFFs,” President Lungu said.

It was imperative for countries affected to revisit the legal and institutional frameworks and fight back the financial bleeding that was under-developing African countries.

IFFs have adverse effects on economies on the continent whose countries have in turn suffered serious effects of climatic change related calamities. This has forced Zambia to re-look and turn to power rationing, effected 1 June this year because of falling water levels in its reservoirs which are the drivers of hydro energy generation.

“At the international level, we recognise that there is lack of common standards for the definition of IFFs, an internationally agreed methodology to estimate these flows, the lack of cooperation by recipients of IFFs, conflicts between national and foreign interests and the disparity in rates between the tax regimes have continued to undermine efforts towards combating IFFs,” added Lungu.

Despite the climatic change calamities, Zambia has not relented in its quest to find solutions to the energy deficit and is investing in various infrastructure but sought the indulgence of investors to partner with Southern African and the continent’s second best copper producer to “float above troubled waters”.

Lungu threw his weight towards calls for Africa’s industrialization in view of the advent of continental collaboration as evidenced through the African Continental Free Trade Area, among other protocols seeking to harness the continent’s competitiveness through value addition.

Her threw his weight towards co-existing with among other developmental bodies, the United Nations Industrial Development Organisation (UNIDO), other African countries and development partners to achieve inclusive industrialisation that would transcend Zambia and Africa in general to better lives for all.

The population on the continent, he noted, had grown and was projected to equal that of China and India by the year 2050 hence the need for industrialisation of Africa to be championed for foster economic growth.

Africa has an opportunity to create a foundation for its citizenry but that could only be achieved if industrialisation was embraced. The attainment of the vision for industrialisation required commitment towards transformation of individual countries on the continent and enable the affected nations to relocate themselves into the industrialisation circle.

Zambia has stepped up efforts to create the necessary conditions for industrialisation  through the development of the transport infrastructure that will make all areas accessible and make the country reachable from all areas.

This was evidenced through among other programmes, the link Zambia 8000. It remains committed to bettering infrastructure in energy to foster renewable power, water and sanitary systems and modern expanded transport systems.

These include motorways, airports and rail, while investing too in technology platforms, key to innovation, manufacturing, enterprise development and delivery of social services, and ultimately to fight poverty, one of the factors of growth.

 

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