Sata, Mbeki slam illicit flows from Africa
Lusaka – Lack of control of industrial and mining output is fueling illicit financial flows (IFFs) from Africa, Zambia’s President Michael Sata has said.
Speaking at a recent high-level panel on IFFs in Lusaka, President Sata said Africa needed strong policies and institutions to stop the haemorrhaging of the continent’s resources.
The United Nations Economic Commission (UNECA) for Africa and the AU organised the meeting.
Former President of South Africa, Thabo Mbeki – who chairs the AU/UNECA High-Level Panel on IFFs – was in attendance.
“The biggest problem we have in Africa is the problem of unemployment and that has made our people conduits (for corrupt outflows of money and resources),” President Sata said. “Once we eradicate that problem, these things we are talking about will not be there.
“It's our resources these people (foreign corporations) have been plundering since we – President Sata and Mbeki – were babies.
“They took your South African gold and silver; they took copper from Zambia … we Africans are just conduits for this plunder for them to enrich themselves and to go and create employment in their own countries.
“What we need now is economic emancipation because once our debts are free, we are not going to be conduits,” President Sata said.
President Sata said there was need to promote a truly African entrepreneurial base to run the continent’s industries.
“It doesn't matter whether it's in Cape Town or Cairo, you don't find any company owned by Africans worth talking about; we need to believe in Africa,” said President Sata.
He added: “Because at the moment, it doesn't matter how many rigid financial regulations we make, these people multinationals are much cleverer; they started dealing in money much earlier, before we were born.”
In a meeting with President Sata, Former President Mbeki said it was unacceptable that most multinational corporations in Africa continued to declare operational losses while siphoning billions of dollars.
In reference to a conversation he had with Mwai Kibaki, the Former President of Kenya, he said: “…what is strange is that for successive years, companies report losses and in fact, they are not making profits.
But in fact, they are underreporting and as a consequence they are not paying corporate taxes.” President Mbeki’s High-Level Panel has conducted a study that estimates that Africa loses US$50 billion annually in IFFs yearly – double the annual official aid to the continent. The figure for 1980 to 2010 is estimated at well over US$1 trillion.
“(The) main destinations of these illicit monies are the Western countries, but not exclusively as some countries such as China, India, Mauritius and Dubai are destinations,” Former President Mbeki said.
“So, the originating countries like ourselves are saying 'what can we do?' And to the receiving countries of these illicit flows, 'what can they do?'” He said ending Africa's continued loss of crucial revenue from multinational companies through tax avoidance, tax evasion and transfer pricing needed the co-operation of blocs like the G8 and the European Union.