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New Africa Day. New Africa Dream?

Another Africa Day is here.

What can we celebrate for?  My dream has been that each year, a day like this should project a new dawn for Africa. As Africans we should be counting our achievements as we celebrate a new Africa.  An Africa where there is access to potable water, quality education, security and food- essentially an Africa where humanity thrives.

To support my dream for a new Africa, a number initiatives have been put in place including the Millennium Development Goals and now the Sustainable Development Goals, all of which aim at eliminating instances of poverty amongst the fast- growing African population. Nevertheless, even with the forgoing roadmaps, the levels of poverty and inequality have been on the rise. The key challenge has been pointed out as the financing of the various aspirations.

Notwithstanding Africa’s richness with valuable resources, the issue of how Africa can fund its development remains a major concern across the divide.  These resources have remained a curse to most countries in Africa, bringing about unnecessary socio-economic conflict. According to the AU/UNECA High Level Panel Report on Illicit Financial Flows (IFFs), IFFs have had a huge impact on Africa’s development considering that the continent loses more that it receives as Official Development Assistance.

Our ailing governance structures which have facilitated deep- rooted corruption have immensely contributed to the unwavering challenges that Africa face today. In short, Africa’s politico-economic systems have been invaded by the ‘malaise’ commonly referred as corruption. The extent of corruption in African countries has been on the rise each and every day even with concerted efforts by various governments such as the setting up of anti-corruption agencies. These agencies have been rendered toothless as the powerful leaders who set them up are the main facilitators of corruption. Economies have further been crippled by corruption as incoming government regimes recycle old practices and mechanisms, the same one that facilitated the vice to begin with. As a key enabler of illicit financial flows corruption has contributed to the unrealised dream of a new Africa.

Annual surveys conducted by the the Corruption Perception Index (CPI), rank most African countries poorly against others across the world, implying the increasing incidences of corruption. These and other issues have raised the flag over the issue of corruption, and as a result, the  African Union set 2018 as the year of combating corruption.

Corruption has remain a key enabler of illicit financial flows in Africa with most commercial activities especially where government is involved being shrouded by fraudulent activities.  As we celebrate Africa Day it is worrying that the Africa Rising dream is slowly fading away.

The release of the West Africa Leaks dossier by the International Consortium of Investigative Journalists (ICIJ)  has pointed out the rot in our systems where self-interest prevails over national interests, such that powerful politicians and corporations accumulate personal wealth at the expense of the ordinary citizens. For instance, the Leaks have highlighted the fact that most leaders take advantage of their positions and siphon resources out of the country through secrecy jurisdictions.  In Benin, the launch of a superstore acted as a conduit to route the payments to suppliers through a Panamanian company and to a bank account in Monaco. Further, it is shocking to note how some tax agreements are negotiated with a view of benefiting specific companies and in turn affecting the amount of tax revenue that government collects and subsequently enhancing poverty. For instance, according to the just- released West Africa Leaks, Senegal signed a Double Taxation Treaty with Mauritius in order that a  Canadian company registered in the island-state, may invest.  The agreement allowed SNC Lavalin to channel its investment through Mauritius using a letterbox.  It is estimated that the structure cost Senegal about $8.9 million in tax revenue.

The Big Question therefore is what lessons are the incoming African leaders are learning from these developments? To live the dream of a new Africa in line with vision 2063, there is need of one Africa where there is a balance between capital and social practices..

The dream of having access to education, security, water and food will be shuttered permanently unless the doctrine of transparency and accountability is embraced across the divide.

This blogpost was written by Jared Maranga, Policy Lead (Tax and Investments; Extractives)

25/05/2018

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About TJNA

The Tax Justice Network-Africa (TJN-A) is a Pan-African initiative and a member of the Global Alliance for Tax Justice. Launched in January 2007 during the World Social Forum (WSF) held in Nairobi, TJN-A promotes socially- just, accountable and progressive taxation systems in Africa. It advocates for tax policies with pro-poor outcomes and tax systems that curb public resource leakages and enhance domestic resource mobilisation.

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