Resource drain hampering progress in Africa
“The resource drain from Africa over the last 30 years, almost equivalent to Africa’s current GDP (Gross Domestic Product), is holding back Africa’s lift off”, once observed Vice President of African Development Bank Professor Mthuli Ncube.
In an article ‘Haemorrhage of illicit financial inflows in Africa’, Ncube indicated that for over 30 years (1980-2009), close to US$1.4 trillion was drained out of Africa. Most of this capital flight was illegal and due to corruption, kickbacks, tax evasion and criminal activities across borders.
“The geographical distribution of the ‘unrecorded capital flows’ on illicit capital flight was uneven with West and Central Africa, surpassing the other regions at US$415.6 billion or 31 percent and Southern Africa US$370 billion or 27 percent,”wrote Ncube.
Although multinational organisations bear the major responsibility for draining African resources, our greed and corrupt African brothers and sisters are playing a major role in siphoning Africa’s bountiful resources.
This has been the case in some African nations where leaders and some individuals are being implicated in high-profile graft charges.
Instead of investing resource revenues into infrastructure and education, these Africans, in collaboration with the companies mining the resources, tap proceeds from the continent's bountiful resources wealth into their own pockets.
As one writer pointed out, “Post-independent Africa is a continent of looters super glued to their ‘power’ seats with rich sycophants greasing the corrupt criminal machines where a bribe is a right.”
“Corruption kills and murders Africans every day. And we need to deal with it as a form of murder,” African Holocaust Society once noted, adding, “When funds for a hospital is divert[ed] to the private purse of some corrupt individual how many people die from preventable illnesses? When [money for] a school, which should have been built, ends up in the pocket of some evil arrogant villain how much human potential, future leaders, future doctors [and] teachers, new markets, [and] new builders are destroyed by that one greedy action. Corruption is murder.”
The World Bank estimates that every year US$1 trillion is paid in bribes while an estimated US$2.6 trillion is stolen annually through corruption sums equivalent to more than 5 percent of global Gross National Income (GNI).
Lack of transparency is facing Africa.
At a conference ‘Making Extractive Industries in Africa Work for African People’ at the University of Oxford in United Kingdom last year, Oxfam executive director Winnie Byanyima, pointed out that sweeping measures to improve transparency and governance are urgently needed to end a scandal that has seen Africa lose an average of US$1 billion every week for the past 30 years in illicit financial flows.
In a study by U4, an anti-corruption resource centre, revealed that the global extractive industry found that for each extra US dollar in oil exports, an additional 11 to 26 cents leaves the country in illicit capital flight. Globally, extractive industries are currently estimated to be worth around US$3.5 trillion a year.
While the root causes of illicit financial flows (ranging from weak financial management systems to political and macro-economic instability, lack of financial liberalisation, and search for higher returns on investments and revenues for health, education, employment income etc,) are further constraints to Africa’s transformation, according to the African Economic Outlook 2012.
The African Economic Outlook 2012 also revealed that the high corruption, coupled with the risk and uncertainty of the domestic economy, weakens the economic and social measures put in place, henceforth limiting the prospect of more inclusive growth.
The International Chamber Of Commerce contends that corruption is the single greatest obstacle to economic and social development around the world.
The estimated resources leaving the African continent in the form of illicit financial transfers is substantial and, as such, resources could be mobilised and invested into an Africa transformation plan.
It is no secret that Africa has the resources to drive its own development.
It is argued that the value between 1980 and 2009 could actually replace all of the foreign assistance and direct investment that developed countries have poured into the continent during the same period.
The massive leak of assets creates poverty in Africa.
Despite the vast resources the continent possesses from oil, minerals, arable land and other valuable assets, Africa South of the Sahara is still trapped in rampant poverty where 48.5 percent of the population lived on less than a US$1.25 day in 2010, according to the World Bank.
Food insecurity, substandard infrastructure and a high unemployment rate affect millions of people across the continent.
South Africa and Egypt are among the major exporters of illicit capital from Africa and suffer the world’s most egregious wealth gaps.
Africa's bountiful resources have often been a source of contention.
Kofi Annan agrees that, “In many African countries natural resources revenues are widening the gap between the rich and poor.”
If Africa’s own assets were put to better use, the continent could progress at a faster pace and meet its targets in the Millennium Development Goals (MDGs) deadline.
As far as this is concerned, Africa’s current rate of development will see the continent battle to achieve the MDGs as predicted by MDGs Report 2013, at least 150 years will still be required for some Sub-Saharan African countries to achieve them.
As stated by MDGs Review, “In order for African countries to achieve their primary MDG goals, to halve the poverty, reduce child mortality by two thirds and achieve universal access to primary education by 2015 at least 7 percent year-on-year GDP is required.”
It added that achieving the MDGs is not only about having enough money. It is also about finding solutions and bringing an end to the blatant corrupt business practices and greed.
African governments should prioritise fighting corruption at the central, local government and international levels. Africans should have the spirit of fighting against endemic corruption which has taken root in our beloved continent.5
Corruption is truly a crime against humanity.