[UAH] CORRUPTION, WEAK GOVERNANCECOSTING AFRICA BILLIONS
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Report: Corruption, weak governance costing Africa billions
10 MAY 2013 13:07 - LYNLEY DONNELLY
The African Progress Panel has revealed its assessment of the challenges
that still face many countries in developing their oil and mineral wealth.
OUR COVERAGE
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MORE COVERAGE
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WEF: Africa regional integration key to more trade
WEF: Africa still trailing world in growth
Combating international tax avoidance and evasion, corruption and weak
governance are crucial if Africa's people are to benefit from the
continent's vast natural resource wealth, former United Nations secretary
general and chair of the African Progress Panel Kofi Annan said on Friday.
According to the panel's 2013 African Progress report at the World
Economic Forum on Africa taking place in Cape Town, the continent is
losing more through illicit financial outflows than it receives in aid and
foreign direct investment.
It found that trade mispricing, or losses associated with the
misrepresentation of export and import values, alongside other illicit
outflows cost the continent $38.4-billion and $25-billion respectively
between 2008 and 2010.
Annan called for a rule-based global system on tax transparency to be
developed with the G20.
"All foreign-owned companies should be required to disclose the ultimate
beneficiaries of their profits," he said.
Switzerland, the UK and the US – all major conduits – should signal their
intent to clamp down on illicit financial flows Annan said.
He also extended this call to players from other developing nations who
have become increasingly active in Africa in the oil, gas and minerals
realm.
Poor governance of state companies
"Major investors in African extractive sectors such as China and emerging
investors such as Brazil must also engage," he said.
The report raised concerns over the structure of investment activity by
foreign companies operating in Africa.
It was characterised by the extensive use of offshore-registered companies
and low tax jurisdictions, and in some cases the complex use of shell
corporations.
"These arrangements come with weak public disclosure and extensive
opportunities for tax evasion," the report said.
The revenues generated for major companies in many cases dwarfed the gross
domestic product (GDP) of the countries they operate in.
In 2012 Shell's revenues sat at $467.2-billion. This is compared to
Nigeria's GPD of $244-billion, Angola's GPD of $104.3-billion and Gabon's
GDP of $17.1-billion.
Poor governance of state companies and assets are also associated with
extensive revenues losses, the report found.
In 2012 Angola was unable to account for $4.2-billion, according to the
report. Nigeria meanwhile was estimated to have lost $6.8-billion between
2010 and 2012.
'We are not poor'
But nowhere had a country lost out as much from this practise than the
Democratic Republic of Congo (DRC), the report found.
It analysed five privatisation deals involving the sale of state-owned
assets to foreign investors operating through offshore companies
registered in the British Virgin Islands and other jurisdictions. The
panel estimated that the losses sustained in these deals, through the
under valuation of assets, was $1.3-billion – more than double the DRC's
health and education budget.
This was in a country with the sixth highest child mortality rate, endemic
malnutrition and seven-million children, out of a total of 11.2-million,
not attending school.
These under-pricing activities however generated returns of around 500%
for the offshore companies involved.
African countries needed to pursue greater transparency in the management
of their resources according to Annan.
"We are not poor, we need to manage our resources better," Annan said.
"African governments can do better."
Transparent access to the details
States had to have "very clear rules" relating to how companies can bid
for concession in their country, including using public auctions that gave
the public transparent access to the details of the bidders and what they
pay he noted.
Fellow member of the African progress panel, Zimbabwean-born
businessperson Strive Masiyiwa said the arrival of other developing
nations on the continent such as China, Brazil and India had been "a
positive game changer".
"But we also need to call on them to try … help us in creating the equity
we are looking for," he said.
It would be good if these new players introduced legislation in the vein
of the US's Foreign Corrupt Practises Act and Britain's anti-bribery laws
to help achieve this he said.
Thé Mulindwas Communication Group
"With Yoweri Museveni, Uganda is in anarchy"
Groupe de communication Mulindwas
"avec Yoweri Museveni, l'Ouganda est dans l'anarchie"
--
UAH forum is devoted to matters of interest to Ugandans and Africans in general. Individuals are responsible for whatever they post on this forum.To unsubscribe from this group, send email to: ugandans-at-heart+unsubscribe@googlegroups.com or Abbey Semuwemba at: abbeysemuwemba@gmail.com.
10 MAY 2013 13:07 - LYNLEY DONNELLY
The African Progress Panel has revealed its assessment of the challenges
that still face many countries in developing their oil and mineral wealth.
OUR COVERAGE
Private sector lapses worry WEF boss
MORE COVERAGE
Gordhan touts 'resource-filled' Africa at WEF
Davos guide A-Z: what you need to know about the WEF
WEF: Africa regional integration key to more trade
WEF: Africa still trailing world in growth
Combating international tax avoidance and evasion, corruption and weak
governance are crucial if Africa's people are to benefit from the
continent's vast natural resource wealth, former United Nations secretary
general and chair of the African Progress Panel Kofi Annan said on Friday.
According to the panel's 2013 African Progress report at the World
Economic Forum on Africa taking place in Cape Town, the continent is
losing more through illicit financial outflows than it receives in aid and
foreign direct investment.
It found that trade mispricing, or losses associated with the
misrepresentation of export and import values, alongside other illicit
outflows cost the continent $38.4-billion and $25-billion respectively
between 2008 and 2010.
Annan called for a rule-based global system on tax transparency to be
developed with the G20.
"All foreign-owned companies should be required to disclose the ultimate
beneficiaries of their profits," he said.
Switzerland, the UK and the US – all major conduits – should signal their
intent to clamp down on illicit financial flows Annan said.
He also extended this call to players from other developing nations who
have become increasingly active in Africa in the oil, gas and minerals
realm.
Poor governance of state companies
"Major investors in African extractive sectors such as China and emerging
investors such as Brazil must also engage," he said.
The report raised concerns over the structure of investment activity by
foreign companies operating in Africa.
It was characterised by the extensive use of offshore-registered companies
and low tax jurisdictions, and in some cases the complex use of shell
corporations.
"These arrangements come with weak public disclosure and extensive
opportunities for tax evasion," the report said.
The revenues generated for major companies in many cases dwarfed the gross
domestic product (GDP) of the countries they operate in.
In 2012 Shell's revenues sat at $467.2-billion. This is compared to
Nigeria's GPD of $244-billion, Angola's GPD of $104.3-billion and Gabon's
GDP of $17.1-billion.
Poor governance of state companies and assets are also associated with
extensive revenues losses, the report found.
In 2012 Angola was unable to account for $4.2-billion, according to the
report. Nigeria meanwhile was estimated to have lost $6.8-billion between
2010 and 2012.
'We are not poor'
But nowhere had a country lost out as much from this practise than the
Democratic Republic of Congo (DRC), the report found.
It analysed five privatisation deals involving the sale of state-owned
assets to foreign investors operating through offshore companies
registered in the British Virgin Islands and other jurisdictions. The
panel estimated that the losses sustained in these deals, through the
under valuation of assets, was $1.3-billion – more than double the DRC's
health and education budget.
This was in a country with the sixth highest child mortality rate, endemic
malnutrition and seven-million children, out of a total of 11.2-million,
not attending school.
These under-pricing activities however generated returns of around 500%
for the offshore companies involved.
African countries needed to pursue greater transparency in the management
of their resources according to Annan.
"We are not poor, we need to manage our resources better," Annan said.
"African governments can do better."
Transparent access to the details
States had to have "very clear rules" relating to how companies can bid
for concession in their country, including using public auctions that gave
the public transparent access to the details of the bidders and what they
pay he noted.
Fellow member of the African progress panel, Zimbabwean-born
businessperson Strive Masiyiwa said the arrival of other developing
nations on the continent such as China, Brazil and India had been "a
positive game changer".
"But we also need to call on them to try … help us in creating the equity
we are looking for," he said.
It would be good if these new players introduced legislation in the vein
of the US's Foreign Corrupt Practises Act and Britain's anti-bribery laws
to help achieve this he said.
Thé Mulindwas Communication Group
"With Yoweri Museveni, Uganda is in anarchy"
Groupe de communication Mulindwas
"avec Yoweri Museveni, l'Ouganda est dans l'anarchie"
--
UAH forum is devoted to matters of interest to Ugandans and Africans in general. Individuals are responsible for whatever they post on this forum.To unsubscribe from this group, send email to: ugandans-at-heart+unsubscribe@googlegroups.com or Abbey Semuwemba at: abbeysemuwemba@gmail.com.
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