Home   >   Business   >   Business News   >   201407
Africa Loses $58bn Annually   
  << Prev  |  Next >>
Comments ( 0 )     Email    Print
Related Stories
Africa is losing a staggering $58 billion every year to the rest of the world.

For the first time, a group of UK and East African NGOs have put the figure on the amount sub-Saharan Africa loses through debt repayments, illicit financial flows and illegal activities.

The group is led by Health Poverty Action and includes the People’s Health Movement Kenya, the African Forum and Network on Debt and Development, the World Development Movement, War on Want and eight other NGOs.

While $134 billion flows into the continent each year, predominantly in loans, foreign investment and aid, $192 billion is taken out mainly in profits made by foreign companies, tax evasion and the costs of adapting to climate change.

The result is that Africa suffers a net loss of $58 billion a year.

This report is the first attempt to calculate Africa’s losses across a wide range of areas.

These include: illicit financial flows; profits taken out of the continent by multinational companies; debt repayments; brain drain of skilled workers; illegal logging and fishing and the costs incurred as a result of climate change.

The detailed breakdown in the report shows that Africa loses $46.3 billion in profits made by multinational companies; $21 billion in debt payments, often following irresponsible loans; $35.3 billion in illicit financial flows facilitated by the global network of tax havens; $23.4 billion in foreign currency reserves given as loans to other governments and $17 billion in illegal logging.

The continent also loses $1.3 billion in illegal fishing, as well as $6 billion as a result of the migration of skilled workers from Africa.

In addition to such resource flows, Africa is forced to pay a further $10.6 billion to adapt to the effects of climate change that it did not cause and $26 billion to promote low carbon economic growth.

These figures highlight the huge disparity between aid and the resources leaving Africa, the report said.

Martin Drewry, Director of Health Poverty Action said: “These figures expose the gross misconceptions about aid and ‘charity.’

“Let’s use more accurate language. It’s sustained looting the opposite of generous giving and we should recognise that the City of London is at the heart of the global financial system that facilitates this.”

The perception that such aid is helping African countries “has facilitated a perverse reality in which the UK and other wealthy governments celebrate their generosity whilst simultaneously assisting their companies to drain Africa’s resources,” the report claims.

It pointed out that foreign multinational companies siphon $46 billion out of sub-Saharan Africa each year, while $35 billion is moved from Africa into tax havens around the world annually.

The study calls for the aid system to be overhauled and made more open.

It said aid sent in the form of loans serves only to contribute to the continent’s debt crisis, and recommended that donors should use transparent contracts to ensure development assistance grants can be properly scrutinized by the recipient country’s parliament.

“Tackling inequality between Africa and the rest of the world means tackling the root causes of its debt dependency, its loss of government revenue by tax dodging, and the other ways the continent is being plundered,” said Sarah-Jayne Clifton, director of Jubilee Debt Campaign.

“Here in the UK, we can start with our role as a major global financial centre and network of tax havens, complicit in siphoning money out of Africa.”
Source: Daily Guide

Comments ( 0 ): Post Your Comments >>

Disclaimer: Opinions expressed here are those of the writers and do not reflect those of Peacefmonline.com. Peacefmonline.com accepts no responsibility legal or otherwise for their accuracy of content. Please report any inappropriate content to us, and we will evaluate it as a matter of priority.
Featured Video