Africa losing $192b annually in profit repatriation - new survey

Africa loses over $192b each year through profit repatriation and tax dodging by foreign companies, a new report by like-minded continental civil society groups led by Health Poverty Action, and Curtis Research, a UK-based research firm, has indicated. The July 2014 report, “Honest Accounts? The true story of Africa’s billion dollar losses” that was released last week, also indicates that the continent suffers a net loss of $58b a year compared to $30b it receives in aid from development partners. According to the report, the continent could lose $580b in the next 10 years if the loopholes that promote profit repatriation are not plugged. “Almost $46.3b in profits made by multinational companies and another $21b in debt payments is lost every year,” the report indicates. Though the report did not indicate the loss incurred by particular countries, it further shows that over $35.3b is lost in illicit financial flows facilitated by the global network of tax havens and $23.4b in foreign currency reserves. Africa also loses about $17b in illegal logging, $1.3b in illicit fishing and $6b from the migration of skilled workers to other continents. What this means “This means African citizens are losing almost six and a half times what their countries receive in aid each year. Or, for every £100 given in aid, £640 is ‘given back’. This demands that we rethink our role in addressing poverty in Africa,” Martin Drewry, the director of Health Poverty Action, said in a statement in London during the release of the report. “Our research, we believe, is the first attempt at a comprehensive comparison of the range of resource flows in and out of Africa. “If these financial outflows and costs are compared with inflows into the continent, they result into a $58.2b net annual loss,” Drewry added. “Africa is not poor; but a combination of inequitable policies, huge disparities in power and criminal activities perpetrated and sustained by wealthy elites inside and outside the continent are keeping its people in poverty. The UK and other wealthy governments are at the heart of this theft,” the report notes. Despite the cancellation of some debts in recent years, Africa still spends $21b on debt repayments annually, the report indicates. Africa loses $35.3b to illicit outflows each year, and the continent had an estimated illicit outflow of nearly 50 per cent higher than the average for all other developing countries.