Afrikans

Africa Losses $89bn In Illicit Financial Flows, UN Report Shows

Dar es Salaam — Africa losses roughly 88.6 billion USD every year in illicit financial flows (IFFs) including tax evasion and outright theft of resources, UN study shows.

The report, titled “Tackling illicit financial flows for sustainable development in Africa,” published a week ago by the United Nations Conference on Trade and Development (UNCTAD) suggests the IFFs is nearly as much as the combined total amount of development assistance, valued at $48 billion and annual foreign direct investment, pegged at $54 billion — the average African countries received between 2013 and 2015.

Hurdle To Development

Illicit financial flows are hindering African development by draining foreign exchange, reducing domestic resources, stifling trade, and macroeconomics stability thus worsening poverty and inequality.

“Illicit financial flows rob Africa and its people of their prospects, undermining transparency and accountability and eroding trust in African institutions,” says UNCTAD secretary-general Mukhisa Kituyi.

The report shows, almost half of the money that Africa loses is accounted for by the export of undervalued commodities such as gold, diamonds, and platinum.

For instance, the report shows, gold accounted for 77 percent of the total under-invoiced exports worth $40 billion.

Stopping The Flight

While tackling illicit flows is a priority for the United Nations, most African countries are yet to plug loopholes that facilitate illegal capital flight and commercial practices such as mis-invoicing of trade shipments, corruption, money laundering, and illegal markets and theft.

From 2000 to 2015, the total illicit capital flight from Africa amounted to $836 billion. Compared to Africa’s total external debt stock of $770 billion in 2018, this makes Africa a “net creditor to the world”, the report says.

IFFs related to the export of extractive commodities ($40 billion in 2015) are the largest component of illicit capital flight from Africa. Although estimates of IFFs are large, they likely understate the problem and its impact.

IFFs Undermine Africa’s Potential To Achieve The SDGs

IFFs represent a major drain on capital and revenues in Africa, undermining productive capacity, and Africa’s prospects for achieving the Sustainable Development Goals (SDGs).
For example, the report finds that, in African countries with high IFFs, governments spend 25% less than countries with low IFFs on health and 58% less on education.

Since women and girls often have less access to health and education, they suffer most from the negative fiscal effects of IFFs. Africa will not be able to bridge the large financing gap to achieve the SDGs, estimated at $200 billion per year, with existing government revenues and development assistance.

The report finds that tackling capital flight and IFFs represents a large potential source of capital to finance much-needed investments in infrastructure, education, health, and productive capacity.

Paul Akiwumi UNCTAD Director for Africa said IFFs is a shared problem between developing and developed countries.

According to him, extractive, telecom sectors, and financial services are more susceptible to IFFs.

Akiwumi said IFFs have huge social and economic consequences. They not only drain domestic financial resources but also they’re correlated with lower government spending on key development areas.

“Illicit activities are by their very nature inherently difficult to record due to the differences in legal and regulatory frameworks across jurisdictions,” he told Ubuntu Times.
According to him, efforts to curb IFFs are hampered by lack of statistics.

The report shows IFFs in Africa are endemic to certain high-value, low-weight commodities including gold.

Sharpening Skills And Knowledge

Out of $40 billion of IFFs derived from extractive commodities in 2015, 77% were concentrated in the gold supply chain, followed by diamonds (12%) and platinum (6%).
The report aims to equip African governments with knowledge to identify and evaluate risks associated with IFFs and foment solutions to curb IFFs and redirect the proceeds towards development projects.

Improving Cooperation 

The report says African governments have not sufficiently reformed their taxation systems and enhance their national capacities to curb tax evasion and tackle proceeds from money laundering and recover stolen assets

Global Intervention

Tax revenues lost to IFFs are costly to Africa where public investment and spending on SDGs are lacking. In 2014 Africa lost approximately $9.6 billion to tax havens, equivalent to 2.5% of total tax revenue.

Local judicial authorities often lack the tools to challenge tax evasion at the core of the global shady financial system.

“Tackling illicit financial flows, however, will open the door to releasing much-needed investments in education, health, and productive sectors. African Governments — in concert with Africa’s private sector actors — should take the lead in strengthening stolen asset recovery, setting new standards for avoiding illicit flows and committing to more concerted actions to combat the negative impact of illicit financial flows on African economies,” says Kituyi.

Local analysts have called for global policymakers to devise measures that would deter billions of dollars from being siphoned out of the continent through money laundering and industrial-scale corporate tax avoidance.

“Africa is not a net debtor, rather a net creditor whose resources are drained through corruption, tax evasion, and outright theft. We need a new paradigm to reverse this trend,” said Bohera Lunogelo an analyst from a Dar es Salaam-based Economic and Social Research Foundation.

Africans Suffer Chinese Mistreatment – in China, Like in Africa

May 23 — In early April, a persistent phenomenon of Chinese mistreatment of Africans reared its ugly head. It was unexpected at such a particularly difficult and strange time as the world remained in the midst of grappling with the Coronavirus. The recent wave of mistreatment of Africans was inspired by claims that Africans were responsible for new imported cases of COVID-19 in Guangzhou. But the claims have remained callous as most of the targeted Africans had no recent travel history, and the Chinese city of Wuhan was the epicenter of the virus.

The treatment meted out on Africans in Guangzhou by Chinese local authorities and some Chinese was a toxic mix of inhumanity, wickedness and insanity, victims who spoke to Ubuntu Times disclosed. It smacked of pure racism. Some Africans were forcefully evicted from their homes and abandoned to take refuge on the streets, under the biting night cold. Others were compelled to undergo multiple screening, while some were forced to quarantine in certain lodging facilities at their own cost. “Africans have been subjected to high levels of scrutiny, suspicion, anger, and discrimination in Guangzhou,” Keith B. Richburg, Director of the Journalism and Media Studies Centre at the University of Hong Kong said in an interview with Al Jazeera.

Human rights activists and organizations couldn’t be indifferent to the abuse. “Chinese authorities claim ‘zero tolerance’ for discrimination, but what they are doing to Africans in Guangzhou is a textbook case of just that,” Yaqiu Wang, China researcher at Human Rights Watch said. “Beijing should immediately investigate and hold accountable all officials and others responsible for discriminatory treatment.”

Others like Carine Kaneza Nantulya, Africa advocacy director at Human Rights Watch have called on African governments to urge the Chinese government to cease all discrimination against Africans in China. “African governments should also press China to enforce measures to prevent discrimination in the future,” she said.

The pressure on the Chinese government over the Guangzhou incident seemed to have been too much. And then, Beijing said it will take steps to lay the matter to rest through new anti-discrimination regulations. But this remedy to many an African in China is merely a strategy to douse diplomatic tensions between the Asian giant and Africa.

China’s political system, which works towards the economic empowerment of the country, has characteristics which breed gross rights violation. Being critical of the Chinese government is the last thing any person based in Mainland China will want to do. So, in the aftermath of the Guangzhou incident, many Africans Ubuntu Times contacted were reticent for fear of victimization.

An African in Shandong province, who asked not to be named, said local police officers unjustifiably detained him and a friend. “They came to our apartment and asked us to follow them to the station. When we got there, they said we had not registered our presence in the town with the police district. We showed relevant documentation to prove we had done the right thing but no one cared to listen to us. They locked us up,” the African said. Both of them ended up paying a ‘fine’ of ¥ 1,200 (about $ 170) each before regaining freedom.

Chinese Dark Side in Africa

Mistreatment and racial discrimination/attack against Africans seem to be deeply ingrained in all aspects of Chinese national life. China’s infamous racist detergent ad — considered as the most racist TV commercial ever made — puts this in practical context. In the 2016 TV commercial, a Chinese detergent is forced into the mouth of a dirty-looking black man by a Chinese lady. The black man is then pushed into a washing machine only to emerge as a sparkling white Asian man.

China isn’t doing much to suppress the mistreatment and racial discrimination/attack against Africans and other black people. This can probably be accounted for by its lack of diversity — the country remains reluctant to boost long-term immigration. And the laxity in checking against racism is encouraging Chinese nationals to go haywire, even more on the African continent.

In April 2020, two Tanzanians were rescued off the coast of South Africa after being thrown out of a Chinese vessel into shark-invested waters. The Chinese captain of the cargo ship and his six crew members later pleaded guilty in a Durban court for attempting to murder the two black stowaways on grounds that they could infect them with the Coronavirus. Such mistreatment of Africans by Chinese in Africa isn’t new. There are indications it could only get worse.

Nowadays in much of Africa, the Chinese build more infrastructure than any other country; be it foreign or African. Chinese banks, especially the EXIM Bank of China, are financing billions of dollars in new loans, aid packages, and other deals to build badly-needed infrastructure across the continent as Africa looks forward to becoming the global powerhouse of the future by 2063. And it is Chinese companies that are doing most of the engineering and construction work.

With the rolling out of the Forum on China-Africa Cooperation as well as the Belt and Road Initiative, Chinese companies have been at the fore of major construction works in Africa such as the construction of roads, bridges, stadia, dams and public buildings. This trend is widely expected to continue as Beijing turns to its new development bank, the Asian Infrastructure Investment Bank (AIIB) to focus more of its economic diplomacy on building infrastructure.

Although the Chinese are making a huge contribution to Africa’s infrastructure development, this comes at a great cost. The quality of some Chinese-built structures is also questionable. There have been reports of Chinese-built structures that quickly develop cracks after construction, roads that quickly fall apart, structures built by Chinese contractors that wreak havoc on its users and so on. Also, Chinese infrastructure and investment companies operating in Africa, especially in some priority landscapes, have been noted for flouting Guidelines of Sustainable Infrastructure for Chinese International Contractors (SIG); something they won’t dare back home.

Dead bodies lying on the ground.
Nine locals were killed in a cave-in on December 29, 2017, on a mining site abandoned by a Chinese company in east Cameroon. The Chinese company had flouted local regulations as it failed to fill in the hole and secure the mining site it had just pulled out of, despite inherent dangers. Credit: FODER or Forêts et Developpement Rural

The SIG guidelines were developed by the China International Contractors Association (CHINCA), to which most member companies are or have subsidiaries operating in Africa. However, Chinese companies constructing major infrastructures in Africa have come under fire for highly disrespecting human rights and environmental exigencies inherent in the execution of their projects. Cases abound like in 2014 when the China Water and Electricity Corporation in charge of constructing the Lom-Pangar dam was accused of violating the rights of workers. There were also industrial strike actions in protest of the high-handedness of the China First Highway Engineering Corporation constructing the Douala-Yaounde double carriageway. The China Harbor Engineering Corporation (CHEC) was also indicted for not respecting its corporate social responsibility in the construction of the Kribi deep seaport.

Since 2011, a company with links to China has been keen on threatening Cameroon’s biodiversity and the survival of indigenous people. Sud-Cameroun Hevea (Sudcam) has destroyed almost 25,000 acres — the size of Paris — of dense tropical rainforest for a plantation to satisfy its appetite for rubber. Besides displacing locals and depriving them of their land and livelihood, the monoculture plantation has touched the Dja Faunal Reserve, a UNESCO World Heritage site.

Locals in remote villages in Cameroon have also been among the Africans to be mistreated by Chinese, who in most cases often enter the country illegally or overstay their visas. In the mining localities east of Cameroon, Chinese miners frequently beat up locals, seize their wives and lands and operate like demi-gods as they mine away millions of francs CFA in precious stones. In 2017, a Chinese who had a minor disagreement with a Cameroonian pulled out a short gun and opened fire. The local died! They often bribe local officials to get away with such impunity.

In Kenya early this year, a Chinese chef, who didn’t hold a work permit, was caught on camera flogging his employee — a waiter — over allegations of reporting late to work. The victim later said he was fired for the same offense. The victim said, for over six months, he amongst other Kenyan workers had been enduring the Chinese beating with a special cane made of wires for fear of losing their jobs. “He [Chinese chef] is very harsh and arrogant. As you can see there are no jobs in Kenya. All employees had to bend low in order to keep the job. I, personally, was whipped more than once but, this time, it was worse,” the victim told K24 Tv back then.

No Easy Way Out

Any form of racism or mistreatment anywhere is unacceptable. But that of Chinese, particularly in Africa, is one too many.

According to Hannah Wanjie Ryder, CEO of Development Reimagined; the first-ever Kenyan wholly foreign-owned international development and diplomacy firm in China, the Chinese government has a clear policy — that any form of racism and discrimination is not acceptable. “However, Chinese people are human. There is no country in the world, no society in the world, that does not have some form of racism and discrimination, especially towards black and African people but also others. China has one of the smallest international migrant communities in the world. Thus, what matters is how quickly and seriously the Chinese government acts to remind and educate [its] citizens of, and enforce, its official position, both in China or abroad,” she told Ubuntu Times.

Ryder confirms Africans across the world are treated unequally, be it in terms of visa policies, access to health, and even to jobs and business opportunities. “Whether as a diplomat or business leader, I have had personal experience of this unequal treatment around the world. China is not an exception. And usually, these issues are too many and complex for African leaders to respond to every time, they must prioritize.”

The CEO of Development Reimagined argues that because of the evidence of the magnitude of the problem, what African leaders must now do going forwards is encourage their key trade and investment partners — such as China — to demonstrate their commitment to Africa by making their countries a friendly and conducive business environment for Africans in particular. “Without this commitment, it will be very hard for economic relationships with African countries and people to evolve for the better,” she said.

Letter From A Concerned Afrikan: Xenophobia In South Africa Desecrates Ubuntu

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South Afrikans,

You went against our sustenance. You violated Ubuntu. You failed in keeping to your end of our shared humanity. Xenophobia is alien to Afrika. In its literal sense, xenophobia translates to fear of foreigners. The word xenophobia is of Greek origin. Xenophobia is foreign to Afrika. You appropriated xenophobia to waste the life of your people. You took ownership of something that does not belong to you, all to destroy the little economic strides your people were making. You acted on the grounds of xenophobia, a concept that has no bearing on our shared suffering while going against a principle planted in your backyard. “You are because we all are” is the cornerstone of Ubuntu. Whether this has any meaning or validity to you, the xenophobic violence in South Africa desecrates our shared humanity.

I first preached Ubuntu at Xavier University during a spoken word at an African Student Association Gala event in 2017. “Being who we are through each other” was my memory verse. I don’t mean to get scriptural with you. To put it another way, it became a refrain in my mind. The spoken word was a point of healing. Some students targeted Xavier University black students a few months prior. You were not there when a white student painted her face black. “Who needs white when black lives matter” was the caption which undermined our long-suffering. You also were not there when someone dressed a skeleton in a dashiki, a symbolic Afrikan attire—flooding back terrible memories of the American lynch mob. These racial occurrences are typical in an anti-black society. Xavier University is America. You are not familiar with America. You do not know that in America, black lives do not matter. And now in South Africa, South Afrika, of all places, you mean to tell me that black lives also do not matter?

You are not in the diaspora to witness the anti-black sentiment the world over. I must tell you that Afrikans, particularly black Afrikans, are the most despised people on the planet. This statement is not meant to bring about self-pity. In the main, it is the black experience. You ought not to trivialize self-respect. You might ask what I mean. My point is: if you do not value yourself, your own people will not value you. What more from the loveless world?

A sense of an Afrikans’ self-worth is a requisite condition for liberation so delayed, and so sought after. In the brutal assault on fellow Afrikans, I saw the horrific scenes making rounds. Back in 2008, Ernesto Alfabeto Nhamuave from Mozambique was burned alive. You did not come to his aid. You watched while the fire consumed him. South Africa’s judicial system never charged anyone for Ernesto’s murder, an assault on justice, another precious black body destroyed, and forgotten. In the recent September attacks, black-owned shops were looted, vandalized, and burned. These vulnerable black peoples’ offense was making a living through menial jobs despite continental hardships. Afrikans scampered to save their lives from the violence.

These attacks happened and continue to occur in a continent that has experienced and continues to experience collective oppression. Where is your conscience? Have you lost a sense of your history? I thought you were a better Afrikan than what you showed. People whose future depends on one another would not conspire to wipe each other out. Yet you see the reverse is proving to be the case. These attacks against black people have become common in South Africa. They were soft targets. The attacks were against Afrikans, who could not defend themselves. The perpetrators would not have attempted these attacks on policed, white, affluent neighborhoods or cities where black elites who are monopoly capital collaborators live—refusing to address growing economic inequalities.

South Africa birthed Ubuntu to the world, but the original enclave of the tenet is in the blood of its people. How can we talk about Ubuntu without speaking to our dignity as a people? “Being who we are through each other” reminds me of an Afrikan’s worth. The world watched as we shed our blood and tore ourselves down in Gauteng Province, Durban, Mpumalanga, Johannesburg, and other townships or regions. There was no collective angst or condemnation. We should pull ourselves together and ask why this is so. Harm to self supports the myth that Afrikans are destructive. At the same time, xenophobia eliminates an Afrikan people so despised.

You seem to have forgotten Nelson Mandela’s campaign. The fight against Apartheid had undeniable elements of Afrikan solidarity. Afrikan nations rallied around South Africa—lending moral and financial support. Not allowing you to walk a journey alone exemplifies Ubuntu. But now you have chosen to betray the path that we threaded together. I ask you not to deceive yourself by believing that South Africa is an island onto itself. I also plead with you not to be under any illusion that Afrikans are foreigners in the southernmost part of Afrika. For this is the danger, we all face.

You know South Africa, I do not. You are approximately four-fifths of the South African population, yet you don’t own your land. The predicament of black South Africans applies to all Afrikan nations. We have not recovered from the colonial experience. You can never defeat your oppressive travails if you continue to hate. Nelson Mandela reminded us: “For to be free is not merely to cast off one’s chains, but to live in a way that respects and enhances the freedom of others.” I must tell you from the bottom of my heart: the xenophobic attacks dishonor our shared past and plight. My soul is heavy. Xenophobia endangers us. It goes against Ubuntu, a fundamental principle that we recognize. Alas, we can never be free as Afrikans unless you are free from hating us, a part of you.

Yours Truly,
EZE

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