Kenya: New campaign to stop Africa’s $50 billion a year illicit outflow
A new campaign to stop Africa from ‘bleeding’ was launched on Thursday in Nairobi by the Tax Justice Network-Africa (TJN-A), a coalition of researchers and activists focused on the harmful impacts of tax avoidance, tax competition and tax havens.
“If we can stop Africa from losing resources in illicit outflows, then these funds can be directed to meeting the needs of the continent’s people and allowing them to build a better future,” said campaigners to explain the symbolic amount of $50 billion, which is the minimum that the continent is estimated to lose every year in Illicit Financial Flows (IFFs).
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.
A high level panel chaired by former South African President Thabo Mbeki has recently reported that the estimated $50 billion a year Africa loses in illicit outflows is double the official development aid that flows into the continent.
“This is an indefinite campaign. It will go on until we have detected and significantly dealt with the issue of IFFs, which is costing Africa a great chunk of resources,” TJN’s Kwesi Obeng told journalists.
“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.
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 percent of the lost revenues, the campaigners said.
The three main categories of IFFs are commercial, criminal, and corrupt activities. According to the Mbeki report, illicit financial flows emanating from shady commercial activities, such as tax evasion, increased from $20 billion in 2001 to $60 billion or more in 2010.