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| Dr. Tigere Chagutah |
By Paul Shalala
A recently released report by the African Union (AU) and the
United Nations Economic Commission for Africa (UNECA) has revealed that Africa
loses up to US$60 billion per year through illicit
financial flows.
The AU/UNECA Report on Illicit and Financial Flows from
Africa was released in January this year.
It was prepared by the High Level Panel on Illicit Financial
Flows from Africa under the theme “Track it, Stop it, Get it” and it paints a
glaring picture on the weak governance and regulatory frameworks on the
continent.
Oxfam Pan Africa Campaigner Dr. Tigere Chagutah, who shared the
findings in Lusaka at the ActionAid-organised meeting yesterday, said Africa suffered the largest illicit financial flows as a share of its economy which averaged 5.5% of its Gross Domestic Product (GDP) per year for the decade 2003-2012.
“There is a shadow global financial system were illicit
financial flows move from one area to the other. In Africa, factors that have
made this situation worse include poor governance, weak regulatory structures
and double taxation agreements,” said Dr Chagutah, who is based in
Johannesburg, South Africa.
According to one of the charts Dr Chagutah unveiled from the
report, Zambia is affected by illicit financial flows to levels of 16% of its
Gross Domestic Product which is one of the highest in the world.
He called on the overhaul of legal frameworks to curb
illicit financial flows if the continent is to gain from its own resources.
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| Pamela Chisanga |
“Multi-national companies employ well learned lawyers to
specialise in tax avoidance which is not a crime. These are the practices that
are affecting Africa today,” he added.
And ActionAid Zambia Country Director Pamela Chisanga said
there was need for political will to fight illicit financial flows from Africa.
“There is need for political will in this fight. Investors
must come and invest and better our lives and communities. We do not need
exploitation,” said Ms Chisanga, who is also an outspoken social media critic
on the impact of what she terms “bad” foreign investment in Zambia.
“40,000 villagers were relocated in Solwezi to pave way for
huge mines but only 4,000 jobs were created for the locals. We don’t need to
defend such activities, its sad.”
Financial Intelligence Center Chief Executive Officer Mary
Nakazwe said there is a tendency among some investors in Zambia to practice tax
evasion and pretend its tax avoidance which is not a crime.
She said her agency, which is part of the Ministry of
Finance, had handled such cases and handed them over to the law enforcement
agencies for possible prosecution.
Meanwhile, Norwegian Ambassador to Zambia Arve Ofstad says
there is need to curb all illegal businesses that deny people of the much
needed development in their countries.
Mr Ofstad says his country funded the establishment of the
Financial Intelligence Center in Zambia as a way of fighting the flow of
illicit money out of the country.
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| Front cover of the report |
”The headquarters of the EITI (Extractive Industry
Transparency Initiative) is now in Norway, we have funded many researches and
commissions on illicit financial flows and we funded the establishment of
Zambia’s Financial intelligence Center. This is part of our efforts to fight
illegal business practices,” he said.
Meanwhile, two lawmakers who attended the meeting expressed
shock at the revelations from the AU/UNECA report but they called for action to
stop illicit financial flows out of Zambia.
“This information you have shared is very vital. These are the
things we need to know as MPs. I urge ActionAid to further take this report to
the executive and technocrats so that action can be taken on these matters,”
said PF Nchelenge MP Raymond Mpundu.
“In these matters, the executive is very scared to take
action. They think investors will run away. They know where the problem is but
they fear to act. Why fear investors?” said UPND Mbabala MP Ephraim Belemu.
The meeting was attended by representatives from the civil
society, media and members of parliament.
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