Ethiopia: African Anti-graft Court sought to arrest culprits of illicit capital flight [Pan African News Agency]
(Pan African News Agency Via Acquire Media NewsEdge) Addis Ababa, Ethiopia (PANA) - African economists have wound up a two-day meeting in Addis Ababa on the steps required to stop the illicit flow of funds with a call for an African Criminal Court to deal with financial crimes.
They also called for the repatriation of US$400 billion held by African Central banks abroad.
"We have been seen as a weak continent. But we have the resources to make Africa the source of global capital and create the kind of life we want for ourselves," said Esther Koimett, the Investment Secretary at the Kenyan Treasury, after chairing a meeting of top Treasury and Central Bank Governors on Thursday.
The economic researchers and senior policy officials from across Africa attended a meeting convened by the economic think-tank, the African Economic Research Consortium (AERC), to discuss ways of stopping the excessive stealing of funds from Africa through illegal channels and tax cheats.
The experts proposed further suggestions be made to the African Union and the Economic Community of West African States (ECOWAS) to create the court that would try those suspected of masterminding economic crimes affecting Africans.
The AERC meeting, also attended by ministers of finance, labour, health and social affairs, called on African countries to raise funds to support local economic think-tanks to enable them to provide additional training to the national revenue authorities on how to conduct internationally approved auditing.
Experts expressed fear over the continuing exploitation of Africa's mineral wealth by foreign multinationals, which instead of paying the relevant taxes, ended up using invoices to escalate cost of imports and under-valuing exports to avoid paying the taxes to the national governments.
"The problem of capital flight is big in Africa," said Prof. Humphrey Moshi, of Dar es Salaam University. "The investment climate in Africa has been improving for over 10-15 years but the capital flight is equally increasing. The increased investments are not felt because of the capital flight."
Research conducted by a team of economists hired by AERC showed Africa lost US$1.3 trillion in capital flight between 1970-2010, mostly shipped out by corrupt dictators, under-pricing of capital returns and misuse of foreign aid by sitting and former government officials.
Prof. Moshi said Africa was losing US$50 billion annually while studies showed Africa was the world's greatest source of foreign capital.
"Economic growth is taking place but poverty is not decreasing. Africa is unable to finance key services because too much money is leaving the continent," he added.
While cautiously welcoming the proposal to create an international criminal court for corruption in Africa, Prof. Moshi said the problem was not the lack of institutions to deal with corruption locally but was more about countries not willing to enforce the relevant international anti-corruption treaties which they have signed at the level of the UN and the African Union.
"Corruption is good for investors. They engage in over-invoicing imports and under-invoicing exports," the Tanzanian academic said.
He said institutions set up to deal with money-laundering were also incapable of dealing with the challenges at hand while leaders remained non-development oriented across Africa.
"We have to make a point to our international development partners and donors that illicit capital flows are inhibiting the growth of Africa. We have to fight corruption because the recovery of these stolen assets will benefit Africa," added Prof. Moshi.
Lesotho's First Deputy Governor of the Central Bank, Dr Makhetha Masilo, while explaining his country's experience with foreign investors, said curbing illicit financial flows was more complicated.
"We had foreign exchange controls but we were not benefiting because the investors would buy air-tickets pretending to travel and collect the foreign currency only to cancel the ticket. We might still need to lessen some of the controls," he cautioned.
The Bankers called on governments to commission specific case studies on the sources of capital flight.
Experts said some funds were being lost through odious debts, spent by officials to buy prime property abroad while other state officials spent the money on criminal debt by buying arms. Some leaders were also accused of using these funds to create oppressive regimes to hurt their citizens.
Former Zambian Central Bank Governor Caleb Fundanga said the US$400 billion in foreign currency reserves held by Central Banks was a big source of global capital which should be used by Africans.
"I suspect the African countries issuing sovereign bonds are actually borrowing from our reserves," he said.
-0- PANA AO/MA 11April2014
(c) 2014 PANAPRESS. All rights reserved. Provided by Syndigate.info, an Albawaba.com company
[ Back To Technology News's Homepage ]