An ubiquitous situation, revealed in the latest UNCTAD report. Indeed, according to the organization, the escape of capital of all kinds reaches 88.6 billion dollars each year in Africa, or 3.7% of the continent's GDP. This staggering figure should be compared with the development aid to Africa, provided by rich countries, which amounts to 48 billion dollars annually. In other words, half of the capital flight, we really had no idea of the continent's generosity.
Beyond the figures, this obviously calls for several comments.
First of all, the underestimation is obvious, since it is a question of illegal and therefore secret operations as those responsible for these flows deliberately and systematically take measures to conceal them. These embezzlements are broadly classified into three categories: criminal activities, commercial activities and corruption. If smuggling is known and corruption regularly denounced for lack of being combated (we have already spoken about it, see here: https://www.mangrove-foundation.com/post/tax-evasion-in-africa-and-development -aid), it is in the commercial field that illicit financial flows are the most important. In this area, false invoicing is the essential element of fraud. It consists in minimizing volumes or prices in order to reduce the taxes that are due. According to the report, the tax shortfall amounts to between 30 and 52 billion dollars each year. Extractive industries (see also here: https://www.mangrove-foundation.com/post/why-the-wealth-of-africa-doesn-t-make-africans-wealthy) are by far the most affected and in particular oil, which represents more than half (56%) of these illicit flows. It should be noted that all sectors of activity are affected, including fishing which ranks 10th, which demonstrates the extent of embezzlement.
Now, who are the happy beneficiaries of this benevolent generosity? Unsurprisingly, this flight of financial resources is not for the benefit of the populations. In fact, development policies are hampered by this lack of financial resources. However, this thick report is hardly prolix on the beneficiaries of this trafficking. Perhaps because it wants to help “African leaders”, it is not crucifying anyone. It is justified by specifying that in the field, the techniques of concealment are numerous and complex to determine. Political correctness joins the most nauseating hypocrisy. UNCTAD thus leaves it to the press to denounce the culprits...
This is why our interventions are targeted, avoid the circuits of cooperation to go directly to the beneficiaries. A drop of water in the ocean? We prefer the image of brick in the wall, solid, visible, and durable.