Tens of billions of dollars are stolen every year in Africa, experts estimate. According to them, fraud, embezzlement and other forms of corruption deprive the continent of much-needed funding for health, agriculture, education and infrastructure.
In Kenya, the Ethics and Anti-Corruption Commission said on Twitter on July 20 that it was investigating four Treasury employees suspected of embezzling public funds. According to the local press, these employees have been accused of having stolen about 37 million Kenyan shillings, or almost 307,700 dollars.
Elsewhere, Glencore, a multinational commodity mining and trading company, pleaded guilty earlier this year – in UK, US and Brazilian courts – to bribery and market manipulation, some of which have involved Africa. The UK Anti-Fraud Office, in a June 21 statement, found that Glencore staff had done so “bribes paid for over $ 28 million” in oil operations in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan. A month earlier, the United States Department of Justice announced that Glencore had pleaded guilty to two related criminal cases and that the multinational would pay approximately $ 700 million in bribery fines and $ 485 million in price manipulation. Petroleum.
About $ 88.6 billion illegally leave African countries every year, the United Nations Conference on Trade and Development (UNCTAD) estimates in a 2020 report that specifically points the finger at tax evasion, mis-billing and l ‘tax evasion. Other criminal activities.
The estimate of losses made by the UN report corresponds to a conclusion of On the trail of capital flight from Africa, a book published earlier this year that examines the illegal flight of capital from Angola, the Ivory Coast and South Africa. The book’s research team calculated that these three countries together have lost an average of $ 60 billion a year for five decades.
“It is much more than what they receive in terms of foreign aid, than what they receive in terms of foreign direct investment, remittances and any other flow”says Léonce Ndikumana, co-editor of the book, professor of economics and director of the African development policy program at the University of Massachusetts.
Having worked for the African Development Bank, Léonce Ndikumana has been studying illegal capital flows for years. “The flight of capital weakens the ability of a country to finance development projects that would create jobs, reduce poverty, generate more opportunities in the field of education and health”he recently told the VOA in an interview.
The professor believes the book team succeeded “identify a very strong and systematic relationship” Between “flight of capital from African countries and the phenomenon of external debt”.
Many governments borrow money from abroad to finance development projects. But, according to Léonce Ndikumana, “a lot of that money ends up being stolen from the same people who are supposed to manage it … and then stolen from the country.”
Léonce Ndikumana explains that, according to the team’s analysis, of every dollar borrowed from African countries, 40 to 60 cents are lost due to bribes, overcharges, embezzlement and the like. Fewer funds can mean lower quality roads, railways or buildings, fewer health services, schools and sanitation facilities, fewer police, firefighters and social workers.
Not to mention, he adds, that the loans must always be repaid in full.
Capital flight is also linked to the decline of a country’s institutions, notes Léonce Ndikumana, “because the very people who profit from capital flight are actively undermining the government’s ability to control transactions” in the field of trade and taxation.
“African resources are plundered by acts of collusion between international actors, a network of facilitators and profiteers, including multinationals and law and accounting firms who advise these individuals who are bleeding the continent.”he complains.
Faced with these illicit financial flows, “We must address all sources of the problem”, says Léonce Ndikumana. For instance, “we must ensure that efforts are made globally to improve the transparency of banking systems”he specifies, invoking strengthening “monitoring and reporting of suspicious transactions”.
UNCTAD also asked “International tax cooperation and anti-corruption measures”.
Concerns about illicit financial flows and proposed solutions are not new, they go back years. A report by the UN and the African Union explained this in 2015 “The countries that are the destination of these flows also have a role to play in preventing them and in helping Africa repatriate illicit capital and prosecute those responsible.”
The African Union Anti-Corruption Advisory Council has called for a raise “liability systems” among Member States, in particular with regard to emergency funds intended to combat the Covid-19 pandemic.
Transparency International, a non-profit organization that fights corruption, urges governments and other actors to do more to stem capital flight. In an open letter to AU leaders on the occasion of the annual Anti-Corruption Day in Africa, the NGO called on member states to share “information relating to public procurement and to sanction and prosecute any abuse relating to Covid-19 recovery funds”. The organization also encouraged the acceleration of efforts to combat illicit financial flows and put an end to “secret corporate structures”.
“There are obvious gaps in data tracking”notes Robert Mwanyumba, regional coordinator and Transparency International advisor for Southern Africa.
The group has established research programs in nine African countries to monitor illicit cross-border financial flows “as a point of reference and as a resource” for their respective governments and public service, “Robert Mwanyumba told VOA in a recent video interview from his Berlin office.
The countries involved are Nigeria and Ethiopia – the continent’s most populous nations and two of its largest economies – as well as Ivory Coast, Kenya, Mauritius, Morocco, the Republic of the Congo, southern Africa and Zambia.
The goal, explained Robert Mwanyumba in an email, is to understand better “the size and mechanisms that allow illicit financial flows in the region”where they go, how the authorities react e “the risks to these African countries and their ability to detect and prevent these funds from being stolen rather than used to reduce the obvious inequalities in the region”.