Tag Archives: AFRODAD

Zambia has continued to record massive revenue losses – AFRODAD

13 Aug

ZAMBIA has continued to record massive losses in revenue due to the dubious manner in which mining and other sources of national revenue are being managed, AFRODAD has observed.

In an interview in Gaborone, Botswana, during a seminar on Illicit Financial Flows in Africa and their negative impact on development, African Forum and Network on Debt and Development (AFRODAD) economic governance policy officer, Tafadzwa Chikumbu, said due to the secrecy that surrounds agreements with multinational companies on mineral extraction, Zambia was losing huge sums of money through illicit financial flows.

“Mineral extraction has placed Zambia at a very precarious situation because the bulk of illicit financial flows come from commercial activities which are either transfer mispricing or trade misinvoicing by multinational corporations. The secrecy around the contracts awarded to mining companies expose Zambia in such a way that it loses more money in the region just like South Africa, Congo DR and Angola,” he said.

Chikumbu said the danger of losing more money through such flows had persisted in Zambia and the country would continue grappling with challenges of getting meaningful revenue from such operations if nothing was done to abate the situation.

He said if Zambia was able to collect enough resources, the country could have been in a position to finance education, health, infrastructure development and reduce the gap between the rich and the poor by simply giving social protection to the majority of the poor people.

“Discussions of illicit financial flows should not remain a technical issue because they affect the lives of ordinary people, the poor. We should always relate the implications of such illegal acts on the lives of the majority poor. Efforts, however, have been made by Zambia to try and mitigate the problem by implementing Extractive Industry Transparency Initiative. Although it’s yet to be implemented in a robust way, the country has taken a very positive development to move towards transparency and accountability in the mining sector,” Chikumbu said.

He said illicit financial flows were a problem for Zambia and considering the fact that the money that moves out of the country ends up in another jurisdiction, probably in the global north, there was need for cooperation between the government and countries where the money was going.

Chikumbu said the disclosure of beneficial owners who have corporate offshore accounts was critical in abating the problem.

SOURCE: http://www.postzambia.com/news.php?id=10498#sthash.flx0BylC.dpuf

Donations from West mask ‘US$60bn looting’ of Africa

12 Aug

illicit2WESTERN countries are using aid to Africa as a smokescreen to hide the “sustained looting” of the continent as it loses nearly US$60 billion a year through tax evasion, climate change mitigation, and the flight of profits earned by foreign multinational companies, a group of NGOs has claimed.Although sub-Saharan Africa receives US$134 billion each year in loans, foreign investment and development aid, research released last week by a group of UK and Africa-based NGOs suggests that US$192 billion leaves the region, leaving a US$58 billion shortfall.

The report says that while Western countries send about US$30 billion in development aid to Africa every year, more than six times that amount leaves the continent, “mainly to the same countries providing that aid”.

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

The study, which also notes that African governments spend US$21 billion a year on debt repayments, calls for the aid system to be overhauled and made more open.

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

“The common understanding is that the UK ‘helps’ Africa through aid, but in reality this serves as a smokescreen for the billions taken out,” said Martin Drewry, director of Health Poverty Action, one of the NGOs behind the report.

“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.”

Research by Global Financial Integrity shows Africa’s illicit outflows were nearly 50 percent higher than the average for the global south from 2002-11. The UK-based NGO ActionAid issued a report last year that claimed half of large corporate investment in the global south transited through a tax haven.

Supporting regulatory reforms would empower African governments “to control the operations of investing foreign companies”, the report says, adding: “Countries must support efforts under way in the United Nations to draw up a binding international agreement on transnational corporations to protect human rights.”

But NGOs must also change, according to Drewry: “We need to move beyond our focus on aid levels and communicate the bigger truth – exposing the real relationship between rich and poor, and holding leaders to account.”

The report was authored by 13 UK and Africa-based NGOs, including: Health Poverty Action, Jubilee Debt Campaign, World Development Movement, African Forum and Network on Debt and Development, Friends of the Earth Africa, Tax Justice Network, War on Want, Medact, Friends of the Earth South Africa, JA!Justiça Ambiental/Friends of the Earth Mozambique.

Sarah-Jayne Clifton, director of Jubilee Debt Campaign, said: “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.

“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.”

A UK government spokesman said: “The UK put tax and transparency at the heart of our G8 presidency last year and we are actively working with the Organisation for Economic Co-operation and Development to ensure companies are paying the tax they should and helping developing countries collect the tax they are owed.” – The Guardian.

SOURCES: http://www.herald.co.zw/donations-from-west-mask-us60bn-looting-of-africa/

http://www.theguardian.com/global-development/2014/jul/15/aid-africa-west-looting-continent

 

Set up commission to undertake debt audit

6 Aug

Flag-map-of-ZimbabwePARLIAMENT should set up a commission to conduct an audit before debt relief mechanisms can be considered as part of a roadmap to resolve the country’s
$9,9 billion external debt, a social and economic justice coalition has recommended.

Last month, Finance and Economic Development minister Patrick Chinamasa announced the setting-up of a Zimbabwe Debt Management Office (ZADMO) to maintain a comprehensive and credible computerised database of all public and publicly guaranteed external debt.

Chinamasa said the sweeping reforms would also see the Ministry of Finance as the final signatory in all loan contractions by parastatals and local authorities.

In an analysis of the reforms to curtail loan contraction, the Zimbabwe Coalition on Debt and Development (Zimcodd) said to find a lasting solution, national public debt audit would bring to the surface the “origins, structure and legitimacy, how much is owed to who, growth and impact of loans on social and economic development”.

“Zimcodd therefore calls for the Zimbabwe Parliament to immediately set up a Public Debt Commission to conduct an official audit before any debt relief mechanism can be considered,” it said.

“The commission should utilise the doctrine of odious debt, and recommend the repudiation of any previous loans which fall under this category.”

Zimcodd said the government should focus on domestic resource mobilisation and plugging “of illicit outflows through high levels of corruption, tax evasion and tax dodging in the extractive industry, particularly the mining sector”.

Zimbabwe’s huge debt has militated against the country’s capacity to attract lines of credit needed to reboot the economy.

The country has no capacity to repay the loans.

Zimcodd said it was concerned by Chinamasa’s proposals to promote the principle of vesting the power to borrow in a single authority as the move was unconstitutional since it violated section 298 (Principles of Public Accountability) and section 299 (Parliamentary Oversight of State Revenues and Expenditure) of the Constitution.

“The executive must ensure that Parliament must at every opportunity be afforded space to exercise its oversight role in all State revenues and expenditure as stated in section 299 of the Constitution,” it said.

It said the composition of the proposed External Loans and Domestic Debt Management Committee (ELDDC) was not adequate as it marginalises the public by only including the central bank governor, Treasury permanent secretary and the Attorney-General.

Zimcodd said Parliament, through portfolio committees, and civil society organisations that are working on debt and economic justice should be included in ELDDC.

SOURCE: https://www.newsday.co.zw/2014/08/06/set-commission-undertake-debt-audit/

World Enviroment Day 2014 #WorldEnviromentDay2014

5 Jun

ImageAs we commemorate World Environment Day (WED), the African Forum and Network on Debt and Development (AFRODAD) calls upon the developed world to speedily honour their pledges in providing funds for climate change financing for mitigation and adaptation efforts to protect our environment (planet earth). In the same vein, there is need for Africa to collectively pool its own resources to address the adverse impacts of climate change to our environment.

WED is the United Nations’ principal vehicle for encouraging worldwide awareness and action for the environment. Over the years it has grown to be a broad, global platform for public outreach that is widely celebrated by stakeholders in over 100 countries. It also serves as the ‘people’s day’ for doing something positive for the environment, galvanising individual actions into a collective power that generates an exponential positive impact on the planet.

Economic Partnership Agreement & World Trade Organisation Post-Bali Meeting

3 Jun

ImageThe Southern and Eastern African Trade, Information Negotiations Initiative (SEATINI) and the African Forum and Network on Debt and Development (AFRODAD) will today (3 June 2014)  hold a joint meeting to update and share information on Economic Partnership Agreements (EPAs) and World Trade Organisation (WTO) Post Bali Doha Round. The meeting will bring together stakeholders from Government, European Union, Parliamentarians, business community, Civil Society Organisations (CSOs) among others.

The WTO is in the process of developing the Post Bali Work Programme and already there are disagreements on the way forward coming from the developed and developing countries. Further, the texts agreed in Bali that includes the Agreement on Trade Facilitation are being debated with regards to entry into force.

For enquiries contact: afrodad@afrodad.co.zw or seatini@seatini.org.zw

For live updates follow us on twitter using the HASHTAG #AFRODADSEATINI, @AFRODAD2011 Alternatively you can follow this blog for LIVE COVERAGE

Malawi poll stand-off loss counted at K18 billion

3 Jun

ImageA regional and economic think tank has estimated that Malawi lost approximately K18 billion due to a slowdown in economic activity just in the first week of the political impasse when the Malawi Electoral Commission (MEC) could not announce results of the elections.

The Harare, Zimbabwe-based African Forum and Network on Debt and Development (AFRODAD) says it has done rough research on the economic impact of the delayed release of the results in Malawi which shows that Malawi has lost a lot economically in the days of the  uncertainty.

Afrodad executive director Collins Magalasi told The Daily Times in an interview in Maputo, Mozambique on Friday that the research showed that the country incurred heavy economic lossesThrough suspended exports, slowed down production by some companies and reduced informal trade. He was speaking on the sidelines of Africa Rising conference organised jointly by the International Monetary Fund (IMF) and Mozambican government. “We learned at the border posts that traffic of both imports and exports had slowed down,” said Magalasi.

He said his institution is now monitoring Foreign Direct Investment (FDI) inflows into the country to establish whether the negative publicity of the election could lead into fewer inquiries about Malawi by investors. He said his institution will prepare a report on the trend of FDI prior, during and after elections, to give a proper picture of how international investors behave in reaction to domestic issues, especially on elections.

Source: http://timesmediamw.com/malawi-poll-stand-off-loss-counted-at-k18-billion/

Zimbabwean government urged to improve taxation systems

18 Feb

ImageThe Zimbabwe Coalition on Debt and Development (ZIMCODD) on Wednesday held a workshop at the Jameson hotel, Harare aimed at sensitizing media on issues to do with Debt, extractives and illicit outflows.

Speaking at the workshop ZIMCODD director Ms Patricia Kasiamhuru spoke on the need to provide capacity information to enable effective reporting. Illicit outflows generally refers to, illegally earned, transferred or spent money, in the extractive sector it involves tax evasions, corruption and illegal exploitation.

Tafadzwa Chikumbu of the African Forum and Network on Debt and Development (AFRODAD) highlighted effects of illegal illicit outflows on a country’s economy, stating that Africa loses about $50 billion in illicit financial outflows while Zimbabwe lost $12 billion over the last 3 decades.

Illicit financial flows stifle socio-economic progress examples can be pointed on the failure by some African countries to finance Millenium Development Goals leading to unsuccessful implementation of these vital causes in societies. Illicit financial flows also promotes corruption and bribery thereby increasing gain for a few and distorting funds which would have been used for poverty alleviation at the expense of ordinary Citizens, it also aggravates foreign debt leading to stagnation in progress as an economy fails to flourish.

Mr Chikumbu spoke on the need for government to ensure fiscal transparency, push for the criminalisation of tax evasions which is rampant in the informal sector, however he pointed out that “untouchable multinational cooperations “, as well as complicity of government position at times make it difficult to fully curb illicit financial flows.

Gilbert Makore of the Zimbabwe Environmental Lawyers association (ZELA ) spoke on challenges and effectiveness of the current resource mobilisation in Zimbabwe’s taxation system citing need to broaden existing tax base, increase diamond resource mobilisation and improve on transparency and accountability as a means to monitor revenue.

Media was urged to play its role in exposing issues of corruption and mishandling of taxes in order to bring justice.

Media was called upon to be factual urging research of all angles so as to be true to the public with dogmatism attributed as the greatest challenge in media.

Zimbabwe Network against illicit outflows (ZINAIF ) called upon journalists to append their signatures as a way of supporting their cause.

SOURCE: http://newsofthesouth.com/finance-mishandling-a-cause-for-concern-for-zim/

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Happy Holidays and a Prosperous New Year from AFRODAD!

25 Dec

afrodad_xmas_card2014

Cursing corruption

10 Dec

ImageCorruption is a barrier to achieving universally accepted development goals, UN Secretary-General Ban Ki-moon said Monday, while calling on governments, the private sector and civil society to take a collective stand against this social, political and economic disease affecting all countries.

“To achieve an equitable, inclusive and more prosperous future for all, we must foster a culture of integrity, transparency, accountability and good governance,” the secretary-general said in his message for International Anti-Corruption Day.
Corruption has a devastating impact across the world. The World Bank estimates that every year between $20 billion and $40 billion are lost from developing countries due to corruption and bribery, but the scourge also impacts developed economies. In his message,  the secretary-general stressed that corruption prevents achievement of the global anti-poverty targets known as the Millennium Development Goals (MDGs) and needs to be taken into account in defining and implementing a robust post-2015 development agenda.

“Good governance is critical for sustainable development,” Ban noted, adding that corruption suppresses economic growth by driving up costs, breaches human rights, increases inequality, and undermines the sustainable management of natural resources.
The UN Office on Drugs and Crime (UNODC) and the UN Development Programme (UNDP) Monday launched the ‘Zero Corruption – 100% Development’ campaign, designed by young people for young people to raise awareness about corruption.
The campaign focuses on the corrosive effects of corruption on development, highlighting that this crime undermines democracy and the rule of law, leads to human rights violations, distorts markets, erodes quality of life and allows organized crime and other threats to security to flourish, according to the joint campaign website.

To highlight the impact of corruption in the world of sport and business, the UN Global Compact, in collaboration with UNDP, today launched a Call to Action to mobilize private and public partners to engage in transparent procurement.
The UN has also developed guidelines to help businesses fight corruption in sport sponsorship and hospitality, Mr. Ban noted in his message.

The first global legally binding international anti-corruption instrument was the UN Convention against Corruption, which today marks its tenth anniversary. It was adopted by the General Assembly in 2003, the same year that the body designated 9 December as International Anti-Corruption Day to raise awareness of both corruption and the role of the Convention in combating and preventing it.
“The Convention is countering corruption in the areas of development, the environment, in the private sector, during major public events, match-fixing, asset recovery, and in many other areas of our lives,” said Yury Fedotov, the Executive Director of UNODC, which houses the Convention’s Secretariat.

At least 171 of the UN’s 193 Member States have so far ratified the Convention. It includes a review mechanism enabling countries to review their peers in a partnership process. In its fourth year, the review mechanism has helped 35 States to improve their anti-corruption laws, and led to the training of 1,400 experts, noted Fedotov. 
“This spirit of cooperation is necessary,” he said. “Corruption is not simply a developed or developing nation’s problem, it is the challenge of every person, and every nation. The review mechanism mirrors this unpalatable fact.”

SOURCE: http://www.nation.com.pk/national/10-Dec-2013/cursing-corruption

United Nations Secretary-General Ban Ki-moon: Message on International Anti-Corruption Day

9 Dec

UN SECRETARY GENERAL MEETS WITH SPANISH PRESIDENTCorruption suppresses economic growth by driving up costs, and undermines the sustainable management of the environment and natural resources. It breaches fundamental human rights, exacerbates poverty and increases inequality by diverting funds from health care, education and other essential services. The malignant effects of corruption are felt by billions of people everywhere. It is driven by and results in criminal activity, malfunctioning state institutions and weak governance.

Good governance is critical for sustainable development, and vital in combating organized crime.  Every link in the trafficking chain is vulnerable to corruption, from the bribes paid to corrupt officials by dealers in arms and drugs to the fraudulent permits and licenses used to facilitate the illicit trade in natural resources.

Corruption is also rife in the world of sport and business, and in public procurement processes.  In the last decade, the private sector has increasingly recognized its role in fighting corruption.  A Call to Action launched by the United Nations Global Compact and partners is mobilizing businesses and Governments to engage in transparent procurement.  Guidelines are also being developed to help business fight corruption in sport sponsorship and hospitality.

The UN is strongly committed to fulfilling its own obligations.  Operating in some of the world’s most unstable environments, the UN faces multifaceted corruption risks that can undermine our efforts to advance development, peace and human rights.  We have developed a robust system of internal controls and continue to remain vigilant and work hard to set an example of integrity.

Corruption is a barrier to achieving the Millennium Development Goals and needs to be taken into account in defining and implementing a robust post-2015 development agenda.  The UN Convention against Corruption, adopted 10 years ago, is the paramount global framework for preventing and combating corruption.  Full implementation depends crucially on effective prevention, law enforcement, international cooperation and asset recovery.  On this International Anti-Corruption Day, I urge Governments, the private sector and civil society to take a collective stand against this complex social, political and economic disease that affects all countries.  To achieve an equitable, inclusive and more prosperous future for all, we must foster a culture of integrity, transparency, accountability and good governance.

SOURCE: http://www.anticorruptionday.org/actagainstcorruption/en/resources/index.html