Repatriating Illegal Financial Outflows Back To Africa For Rapid Development And Renaissance in 2014

Chofor Che  Illegal financial transactions (IFT) from the continent of Africa remain an impediment to development. Some of these finances are starched in foreign bank accounts with the complicity of corrupt government officials of African states. According to the Mo Ibrahim Foundation in a 2013 publication, from 1980 to 2009, Africa was a net creditor to the world, with a loss of finances to the tune of about $ 1.4 trillion. Central Africa and North West Africa witnessed an annual outflow of $ 30.4 million during the period 2000 to 2009. It is vital to look at the 5 top states in Africa with the largest IFT per capita. It is also important to examine in terms of volume, the top 5 African states with the largest cumulative IFT during the period 2000 to 2009. As a percentage of the Gross Domestic Product (GDP), it is also important to examine the 5 states with the largest cumulative IFT from 1980 to 2009, before suggesting how IFT can be curbed to make the continent more developed in 2014. Global Financial Integrity 2013 of the African Development Bank (ADB) purports that the top 5 states in Africa with the largest IFT per capita are Botswana, Equatorial Guinea, Gabon, Libya and Seychelles. In terms of volume, the top 5 African states with the largest cumulative IFT during the period 2000 to 2009 were Algeria, Egypt, Libya, Nigeria and South Africa. As a percentage of GDP the top 5 states with the largest cumulative IFT from 1980 to 2009 were Chad, Congo, Djibouti, Equatorial Guinea and Seychelles. In most of these states especially the states rich in natural resources, the natural resource sector happens to be the main source of IFT. Oil and gas exploration as well as the mining and forestry industries in Africa are hard hit by IFT. In African states poor in natural resources, IFT usually emanates from mispricing of trade by companies of all sizes. Corruption in the public procurement sector also remains an area which fuels IFT. Such malpractices include serious money laundering activities. The central governments of African states are usually aware of these illicit transactions especially as most top ranking government officials are involved in such malpractices. Those who are most hit by IFT are the poor masses in Africa who do not have a say in such transactions. A majority of poor Africans have to pay the price especially via heavy taxation. It is thus vital that in 2014, the international community, national governments in Africa and abroad, the private sector at home and in the diaspora, universities and think tanks all put their hands on deck and change the status quo. Carefully rethinking through a strategy on how unaccounted finances starched in foreign bank accounts especially Swiss accounts, can be repatriated back to Africa may be a first step to take. Policy suggestions to halt IFT may also include Double Tax Avoidance Agreements (DTAA) and Automatic Exchanges of Tax Information (AEI). Africa equally needs a complete reform of her customs services and serious anti-money laundering initiatives. It is also important for corruption to be curbed in the management of public procurement. The activities of multinationals involved in oil and gas exploration as well as in the mining and forestry sectors in Africa are to be encouraged, but not at the detriment of ignorant and poor Africans. It is thus vital for central governments to ensure that these multinationals are not involved in money laundering and IFT. Apart from the above mentioned suggestions, effective financial and administrative decentralization of financial and human resources in African states is also germane to curb IFT. If African governments take some of these suggestions into consideration then curbing IFT can be a reality on the continent. * Source choforche]]>