Africa is a resource-endowed continent but sadly the continent is reeling in poverty. With its vast resources that are finite in nature mostly in the mining sector, the continent is trailing other continents in terms of socio-economic development and as a result Africans are poor.
Professor Mthuli Ncube, chief economist and vice-president of the African Development Bank, agrees: “The African continent is resource-rich. With good resource husbandry, Africa could be in a position to finance much of its own development.”
It is estimated that Africa has lost over US$1.4trillion in illicit financial outflows in the last three decades, which is about US$50billion to US$80billion yearly. Illicit financial flows siphon revenue out of poor countries, robbing them of much-needed assets and forestalling economic development,” said Global Financial Integrity, a United States-based research and advocacy organisation, director Raymond Baker.
“It is clear that the principal source of this illicit outflow, are in fact the multinational companies. The estimate that we have is something like 60 percent of the outflows originate from the activities of large commercial companies that operate from Africa,” disclosed ex-President of South Africa Thabo Mbeki, who is also the chairman of the panel on illicit financial outflows set up by ministers of finance in Africa.
Anne Versi, writing for the African Business Magazine, said: “... While the outside world has always been very quick to pin the corruption label on Africa, we have always argued that it takes two to make this deadly dance work. Now it is obvious that powerful multinationals are as complicit, in fact more so, in sucking Africa’s lifeblood as the worst local despot.”
According to estimates by Global Financial Integrity corrupt activities such as bribery and embezzlement make up only about 3 percent of illicit outflows; criminal activities such as drug trafficking and smuggling make up 30 to 35 percent and commercial transactions by multinational companies make up a whopping 60 to 65 percent.
Mbeki said there are “a whole number of ways” these multinationals cause illicit flows of funds which include trade mis-pricing, transfer pricing, mis-invoicing and others.
The media has kept silent and has not raised a middle finger against what its governments, intelligence services, corporations and businessmen are doing to Africans.