UN agencies must walk the talk to tackle illicit outflows

Youth Forum members join Elani music group in a dance during UNCTAD Conference at KICC on Thursday 21/07/16.PHOTO:BONIFACE OKENDO

NAIROBI: Africa is at crossroads. The continent can continue engaging with the developed, and the newly developed countries of South East Asia, as it has done for well over a century or it can engineer a paradigm shift.

Evidence on the ground suggests that the continent will continue hosting the world’s poorest people until it changes the way it does business within its borders and with the rest of the world. To their credit, African leaders understand the need for change and are openly calling on their development partners to embrace a new way of doing business.

President Uhuru Kenyatta articulated the continent’s sentiments at this week’s UNCTAD conference in Nairobi when he accused the West of hypocrisy and double standards in dealings with Africa. The President regretted that the West was now running away from globalisation after it had benefited from the process.

An equally regrettable charge laid at the feet of the West during last year’s World Trade Organisation meeting also held in Nairobi was that the developed countries were subsidizing their farmers thus locking out imports of agricultural produce from Africa and the rest of the developing nations.

That the criticisms were hitting home came from no less a person than Roberto Azevedo, the director-general of WTO when he told off African leaders earlier this week. But, perhaps, unwittingly, the director-general seemed to agree with African leaders when he advised them to avoid the simple narrative that development was the sum total of one or two things; democracy, transparency and accountability.

Interestingly, the African leaders’ argument was that after they had fulfilled the conditions the West laid down, the developed countries moved the goal posts. And by lecturing Africa what development required, the WTO boss seemed to fall back on the old image of Africans as lazy.

The only logical conclusion that can be drawn from the rhetoric generated in these global meetings is that Africa has no choice than to, first, look inwards before seeking or expecting assistance from outside.

This would require a close analysis of the continent’s resources and determine how these may be best used to develop Africa. It is not in dispute that the continent has enormous resources including minerals, oil and gas and vast tracts of fertile land coupled with hospitable climate. And equally significant, the continent has a large pool of well-educated young people in contrast to the majority of the population in the developed countries which is ageing.

But even before the analytical work begins, there is an urgent need for African countries to conduct a fresh audit of their tax systems and processing to reduce the level of pilferage and out-right theft. The countries that depend on commodity exports for much of their tax revenues are particularly vulnerable as UNCTAD’s analysis indicates. Initial findings are that these countries are losing as much as 67 percent of their export earnings in a process referred to as trade mis-invoicing.

As though that was not bad enough, other studies have revealed that the continent loses more in this under-hand process than it receives in annual foreign direct investment (FDI) and development loans and grants.

The hypocrisy that President Kenyatta, and other African leaders highlighted during their speeches, is also evident in the fact that the importing countries benefitting from trade mis-invoicing are some of the leading advocates of the argument that Africa is poor because it has weak or non-existent democratic systems.

LOOTERS

They argue Africa does not have transparent and accountable governance systems in the conduct of public affairs. This would seem to be a case of a kettle calling the pot black or vice-versa.

The way to break the argument which has no winners is for Africa to persuade the UN agencies to walk the talk and assist the continent to stop illicit financial out-flows by designing workable strategies, policies and programmes.

Obviously, that would still leave the onus of implementing the programmes with African leaders. But whether this will happen, especially in view of some African leaders being suspected of going to bed with the looters of their own countries, remains to be seen. [email protected]