OXFORD — Sweeping measures to improve transparency and governance are urgently needed to curb the one billion dollars in losses Africa has experienced every week for the past 30 years because of illicit financial flows according to international relief and development organization Oxfam America.
Speaking at a special public meeting of political, business and civil society leaders at Oxford University, Oxfam's executive director Winnie Byanyima urged for a global solution to this crisis, not solely an African one.
"The resource curse has never been so stark and, with new mineral discoveries happening every day in Africa, it has never been so vital to tackle," said Byanyima. "These huge new finds could mean tens of billions of dollars of taxes to pay for schools and hospitals—but only if this new wealth remains in Africa. Too often it has ended up in Zürich not Zambia, London not Liberia."
In this hemorrhaging of funds, fuel-exporting African countries were hit hardest, losing $732.8 billion in that period, according to the Africa Development Bank. Nigeria, Egypt and South Africa were the worst affected countries across Africa's regions. With new mineral discoveries amounting to $11 billion in iron, oil, gas, gold and coal in Guinea, Ghana, Liberia, Tanzania and Mozambique alone, according to the Africa Progress Panel, there is a worrying potential for a renewed surge in illicit flows from Africa.
Recent moves in Ghana to marry its new mineral discoveries with an ambitious new petroleum revenue management law are encouraging. And regionally, the Economic Community of West African States (ECOWAS) has begun work on a regional mining code intended to protect the rights of local communities and the Africa Union has adopted its 'Africa Mining Vision.'
"We are at a turning point in genuinely opening the global extractive industries to more scrutiny and cleaning up their tax affairs," continued Byanyima. "At long last we see some solid blueprints being laid out. This puts us at square one. Now we must push for all of these exciting initiatives to be put to work for African people."
The challenge, however, remains huge. The latest CIVICUS survey reveals that many newly-resource rich African countries remain rooted near the bottom of global governance rankings. And according to the Chr. Michelsen Institute, for each extra US dollar in oil exports, an additional 11 to 26 cents leaves the country in illicit capital flight. Globally, extractives industries are currently estimated to be worth around $3.5 trillion a year.
Oxfam believes the commitment made earlier this year by the G8 to "raise global standards for extractives transparency and make progress towards common global reporting standards" and its endorsement of the Extractive Industries Transparency Initiative was a good first step.
"Africa's vast natural resource and mineral wealth should benefit Africans. Properly managed, revenues could be used to overcome extreme poverty and improve the health and lives of millions of Africans," said Keith Slack, Global Program Manager for Extractive Industries at Oxfam America. "In order to do this, the US and the EU need to implement their extractive industries transparency laws and companies and governments also must be held accountable for managing Africa's natural resource riches in a way that benefits local communities."
Oxfam and the African Studies Centre of the University of Oxford are hosting the event with speakers including Ugandan Foreign Affairs Minister Sam Kutesa, Ghanaian High Commissioner Kwaku Danso-Boafo and Zimbabwe's former Prime Minister Morgan Tsvangirai. The chief economist of the African Development Bank and representatives of Rio Tinto, the Ford Foundation and the Global Alliance for Tax Justice will also speak.
Up to $1.4 trillion was lost between 1980-2009, according to recent Africa Development Bank figures, or between $50-60 billion each year.