• About Us
  • Archives
  • SWG Registration
Samrack Media
Mahiga Homes
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events
No Result
View All Result
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events
No Result
View All Result
Samrack Media
No Result
View All Result

High Level Panel on Illicit Financial Flows from Africa,”How to steal from Africa, all perfectly legally” by Alex de Waal

samrack by samrack
May 7, 2016
in 2016, Africa, Diaspora, Kenya, Kenya Diaspora News, News, U.S Diaspora
A A
0
High Level Panel on Illicit Financial Flows from Africa,”How to steal from Africa, all perfectly legally” by Alex de Waal
Share this
FacebookTwitterPinterestEmailWhatsAppLinkedIn

High Level Panel on Illicit Financial Flows from Africa,How to steal from Africa, all perfectly legally by Alex de Waal

Africa loses at least $50 billion a year — and probably much, much more than that — perfectly lawfully. About 60% of this loss is from aggressive tax avoidance by multinational corporations, which organise their accounts so that they make their profits in tax havens, where they pay little or no tax. Much of the remainder is from organised crime with a smaller amount from corruption. This was the headline finding of the High Level Panel on Illicit Financial Flows from Africa, headed by former South African President Thabo Mbeki, a year ago.

This amount is the same or smaller than international development assistance ($52 billion per year) or remittances ($62 billion). If we take the accumulated stock of these illicit financial flows since 1970 and factor in the returns on this capital, Africa has provided the rest of the world with $1.7 trillion, at a conservative estimate. Africa is a capital exporter.

The rest of the world didn’t take much notice of the Mbeki Panel’s findings until the Panama Papers revealed the extent to which this is just part of a global phenomenon. The rich aren’t being taxed. The rest of us pay for everything.

The OECD calls the phenomenon ‘base erosion’ (referring to the emasculation of the tax base of the affected countries) and ‘profit shifting’. The beneficiaries are a small fraction of the world’s wealthiest 1%, and the secrecy jurisdictions (aka tax havens) where they sequester their money. These locations include the City of London, numerous British overseas territories, Switzerland, and new entrants to the global business of looking after the monies of the hyper-wealthy and ordinarily wealthy, who would prefer not to pay tax. Countries including Mauritius, the Seychelles, Botswana and Ghana are seeking to enter this competition.

And the vast majority of this is perfectly legal.

Accountants’ alchemy

Two hundred years ago, the slave trade was legal. One hundred years ago, colonial occupation and exploitation were legal. This time the legal immiseration is done by accountants.

This dimension of unethical financial activity isn’t captured by Transparency International (TI) and its Corruption Perceptions Index. That index is, as it says, a measurement ofperceptions. But of what andby whom? As the UN Economic Commission for Africa recently observed, it relies on asking key power players in a nation’s economy what they think of the level of corruption. Many of those are foreign investors. Using this approach a country like Zambia will unsurprisingly tend to rank high on corruption – 76 worst out of 168. Meanwhile, Switzerland will rank low – 7th.

But the perfectly legal transfer of the wealth of Africa to Europe isn’t captured by this index. As TI notes, “Many ‘clean’ countries have dodgy overseas records”. Consider this: the number one destination for Zambian copper exports is Switzerland, which in 2014 accounted for 59.5% of the country’s copper exports. Yet Switzerland’s own imports that year scarcely contained any mention of copper at all. Had the African country’s main exports just vanished into thin air? The 2015 figures suggest that in fact much of these exports were destined for China (31%), though Switzerland remained the number one destination (34%).

The answer to where the money goes lies in accountants’ alchemy. International corporations present their books in such a way that they pay as little tax as possible in either Zambia or China. And they don’t pay much in Switzerland either – because the Swiss don’t demand it.

Suddenly the ranking of Switzerland, 69 places ahead of Zambia in the honesty league, looks a bit suspect. But of course it’s all perfectly legal.

From Zambia’s point of view, what counts as corruption is defined by the rich and powerful. When their country is robbed blind by clever accounting tricks, against which their government and people have no recourse, it is just the operation of a free market controlled – as free markets so often are – by corporations that have enough power to set the rules.

Political money in a political marketplace

Another little noticed but significant feature of illicit financial flows from Africa is that there are occasional reverse flows. The movements back into African countries aren’t as big as the outflows, but they are important. What is happening here is “round-tripping”: spiriting funds away to a safe place so they can be brought back, with their origins unexplained, and no questions needing to be asked.

The same multinational corporation that is defrauding an African country can pay money into the offshore account of one of its political leaders. Or that leader can whisk funds away by other means. Our main concern here isn’t the money invested in real estate in France, yachts, fast cars, or foreign business ventures. These are personal insurance policies in case things go wrong at home, or tickets to the global elite club. Rather, our concern is the cash kept liquid, to be brought back home when needed – the money brought back to fix elections, buy loyalties and, in sundry other ways, secure leaders in power. These are political budgets par excellence: the funds used for discretionary political purposes by political business operators.

In the United States, almost any kind of political funding you can think of can be done in a perfectly legal manner, given a smart enough accountant and lawyer. Political Action Committees can spend as much money as they like in support of a candidate. Campaign finance is essentially without a ceiling.

In Africa, political finance laws range from lax to non-existent. Spending vast amounts of money on winning political office – or staying in office – offends no law. The monetisation of politics is one of the biggest transformations in African political life of the last 30 years. It is generating vast inequalities, consolidating a political-commercial elite which has a near-monopoly on government office, fusing corporate business with state authority, and making public life subject to the laws of supply and demand. Political markets are putting state-building into reverse gear, transforming peace-making into a continual struggle against a tide of mercenarised violence, and – most perniciously – turning elections into an auction of loyalties.

Political money is discrediting democracy. Some of the transactions that constitute Africa’s political markets are blatantly corrupt, but many are simply the routine functioning of political systems based on the exchange of political services for material reward.

Yes, there is corruption in Africa, just as there is corruption in international trade and finance. But when Prime Minister David Cameron opens the Anti-Corruption Summit next week on 12 May, we should be aware that the greatest fraud perpetrated on the majority of the world’s citizens – notably those living in Africa – is all perfectly legal.

Alex de Waal is the Director of the World Peace Foundation. 

Sou

Tags: Accountants’ alchemyAlex de Waal is the Director of the World Peace Foundation.all perfectly legally by Alex de WaalHigh Level Panel on Illicit Financial Flows from AfricaHow to steal from AfricaPolitical money in a political marketplace
Previous Post

Congo lays to rest music and fashion legend Papa Wemba

Next Post

Raila remembers his mother as Kenya joins world to mark big day

Related Posts

Africa Day: My Vision for Payments in Africa – Olugbenga GB Agboola
Business

Africa Day: My Vision for Payments in Africa – Olugbenga GB Agboola

June 5, 2023
Kenyan Mother and Daughter Running Successful Restaurant in the US
Business

Kenyan Mother and Daughter Running Successful Restaurant in the US

June 5, 2023
bey Muthoni: Kenyan Diaspora psychologist helping immigrant Students at VCU
Business

Abey Muthoni: Kenyan Diaspora Psychologist Helping Immigrant Students At VCU

June 3, 2023
Pastor Catherine Wairimu Ng'ang'a
Diaspora

Githurai Pastor Accused of Defrauding Kenyans in the US of Sh6.8 Million

June 3, 2023
Former Citizen TV Journalist on Verge of Becoming Homeless in the US
Business

Former Citizen TV Journalist on Verge of Becoming Homeless in the US

June 3, 2023
Safaricom’s M-Pesa License Approval in Ethiopia Paves Way for Financial Inclusion and Innovation
Africa

Safaricom’s M-Pesa License Approval in Ethiopia Paves Way for Financial Inclusion and Innovation

June 3, 2023
Next Post
Raila remembers his mother as Kenya joins world to mark big day

Raila remembers his mother as Kenya joins world to mark big day

Please login to join discussion
ADVERTISEMENT
ADVERTISEMENT
Royal Gardens Ngong Royal Gardens Ngong Royal Gardens Ngong
ADVERTISEMENT
KIBS VILLA HOMES:(ABNB) Relax into Luxury: Monthly ABNB rates are negotiable Call:508-479-1517 / 254714428680 KIBS VILLA HOMES:(ABNB) Relax into Luxury: Monthly ABNB rates are negotiable Call:508-479-1517 / 254714428680 KIBS VILLA HOMES:(ABNB) Relax into Luxury: Monthly ABNB rates are negotiable Call:508-479-1517 / 254714428680
ADVERTISEMENT

Latest News

Africa Day: My Vision for Payments in Africa – Olugbenga GB Agboola

Kenyan Mother and Daughter Running Successful Restaurant in the US

Abey Muthoni: Kenyan Diaspora Psychologist Helping Immigrant Students At VCU

Githurai Pastor Accused of Defrauding Kenyans in the US of Sh6.8 Million

Former Citizen TV Journalist on Verge of Becoming Homeless in the US

Safaricom’s M-Pesa License Approval in Ethiopia Paves Way for Financial Inclusion and Innovation

Uhuru Changes Jubilee NDC Venue Amid Suspension

Kenyan Marathon Legend Eliud Kipchoge Awarded Ksh7.4 Million By 18-Year-Old Spanish Princess

Biden and Republicans hopeful of a deal

President Ruto Admits Losing Weight

We are grateful for your monthly or one-off donations To Samrack Media: Cash App No: 781-888-8770 $SAMRACK001

Money

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency

by samrack
November 19, 2021
0

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency This week sees the launch of a new initiative to equip...

A simple guide to Government Bonds investing in Kenya

A simple guide to Government Bonds investing in Kenya

by samrack
September 17, 2021
0

A simple guide to Government Bonds investing in Kenya A treasury bond (T-bond) is a medium term to long term...

Politics

Businessman Awarded Sh126 Million for Land Forcefully Taken to Build SGR

Businessman Awarded Sh126 Million for Land Forcefully Taken to Build SGR

by samrack
April 8, 2023
0

Businessman Awarded Sh126 Million for Land Forcefully Taken to Build SGR The Environment and Land Court has awarded over Sh126...

Paul Rusesabagina's daughter tweeted a photo of him smiling.

Hotel Rwanda hero and government critic arrives in US

by samrack
March 31, 2023
0

Hotel Rwanda hero and government critic arrives in US Paul Rusesabagina, an outspoken critic of the Rwandan government, has arrived...

  • About Us
  • Archives
  • SWG Registration

© 2023 SAMRACK - Diaspora News & Updates; design by: Samrack.

No Result
View All Result
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events

© 2023 SAMRACK - Diaspora News & Updates; design by: Samrack.

Page generated in 1.062 seconds. Stats plugin by www.blog.ca