BLUE LINES: THE INSIDE VIEW At a meeting in Bahir Dar on 26-27 April, financial experts told Ethiopias Tana Security Forum that Africa could be losing as much as US$100 billion a year from illicit financial flows and suggested ways to stop them. They also had a sneak preview of a report due to be presented to the African Union summit in June. It may help the leaders to take this subject seriously at the AU summit in Malabo – an improbable location given the reputation of Equatorial Guinea for grand corruption and nepotism – that South Africas former President Thabo Mbeki chairs the panel presenting the findings. Carlos Lopes, who heads the United Nations Economic Commission for Africa which led the research, says the sections on deliberate trade mispricing, the over-pricing of imports and under-pricing of exports to facilitate capital flight, will be particularly detailed. Experts calculate that Africas two biggest economies, Nigeria and South Africa, each lose as much as $10 bn. a year from mispriced trade and the suborning of customs officials. The report will also show how obsessive financial secrecy in many countries helps conceal crimes such as contract kickbacks, money laundering and theft of state assets. It will also show how such secrecy helps companies evade tax and flout market rules. Mbeki will struggle to persuade leaders to act decisively against such abuses. The experts at the Tana Forum concluded that his strongest argument would be self interest: as capital gets costlier and more risk averse, even resource-rich regimes may find it counter-productive to indulge their own criminal classes and foreign allies.
Posted on: Fri, 02 May 2014 10:48:39 +0000
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