Panic in panama
A scandal rocks the world. The usual scandal
mix - money, power, crime and influential people (sadly no sex…yet). This is a classic
case of the top 1 per centum of the world’s population showing off their wealth
and their way of life. The facts of the scandal; A whistle blower provides 2.6
terabytes of information from one law firm based in Panama. This information uncovers
a secret labyrinth of anonymity stretching over almost four decades and across
50 countries where tax havens have been expertly utilised to siphon, steal and/or
hide large sums of monies by people in powerful places. Scandal rocks countries
in all continents. Russia, Mexico, Iceland, Syria, the United Kingdom, Canada, China
and many more countries. Africa is also not left out. Former Presidents, their
close relations and the leaders of large, powerful public corporations are
implicated. Oh! And by the way, I still cannot wrap my head around what a
terabyte is.
Global effects
Europe-Citizens in Europe are scandalised (as
they should be). Citizens rally to demand accountability and transparency from
their leaders. Presidents, prime ministers and high ranking officials are
implicated. Some resign (as they should rightly do), some are questioned about
their dealings and may yet resign (that would be interesting to watch) and some
defend their actions as not illegal (duh!). Kudos to citizen’s movements.
Change happens rapidly.
Africa-citizens wake up to the news of
politicians, their families and people in high and influential places of power
implicated in the Panama papers. Some newspapers report on it, some media
houses run with it on the 6am news, most of it is covered in the ‘entertainment’
section of the news. Then silence. No change in the status quo. Citizens go
about their business as usual. Man must eat.
The question is; why aren’t African citizens or
even African civil society organisations working on corruption concerned with
the scandal? First of all, no African politician has resigned, nobody has
explained how their monies got to Panama, no press conferences or communiqués to
throw more light on the named individual. Nada. Nothing. Rien. There has been
no citizens movements asking for any such thing. This in itself is a shock.
My answer
is that Africans are so used to corrupt practices by their politicians and
influential people that the Panama papers is just another one of those
things. A drop in the bucket. Nothing will
change anyway. Most revealing to me is that fact that nothing will change
whether or not some noise is made about this event, after all, they have more
important things to do, such as looking for their daily bread.
Illicit financial
flows and Africa
- Tax Justice Network, an international research and advocacy organization, says the as of 2010, there was between $21 and $32 trillion kept in offshore holdings. This represents between 8 and 13 per cent of total global wealth.
- According to latest research from GFI, Sub-Saharan Africa lost an annual average of $52.9 billion—roughly 5.5% of GDP—in illicit financial outflows from 2003-2012 (the most recent year for which data is available), taking an enormous toll on African economies. Trade misinvoicing, the deliberate over- and under-invoicing of trade transactions, accounted for 68.8% of all outflows from the continent over the decade.
- According to the AU-UN report on illicit financial flows in Africa, Africa lost approximately $850 billion in illicit financial outflows between 1970 and 2008 and the report goes ahead to conclude that Africa loses more than $50 billion every year to illicit financial flows.
- Bringing this to reality, Christian Aid, a British Aid Agency, estimates that for every $10 given in aid to the developing world, $15 slips out through tax dodging.
It is refreshing to note that the chairman of
the AU/UNECA High Level Panel On Illicit Financial Flows in Africa, Mr. Thabo
Mbeki, has issued a report in the wake of this expose. In his press release,
Mr. Mbeki makes mention of the need for African countries to take this
information seriously and to put in place measures to punish citizens found to
have breached any financial misconduct laws. Sadly, so far, only South Africa has
put out such a call.
Tax Justice Campaign
A friend of mine once commented that contrary
to the recurring anti corruption reports that Switzerland is one of the least
corrupt country in the world, it is rather the reverse, that Switzerland is the
most corrupt country in the world. In that they have created all these Chinese
walls and codes of secrecy that make them able to ensure that wealth (some
legitimate, most not) is stored within its borders without any transparency.
Tax justice campaigners, myself included, have
since the early 2000s been campaigning to throw light on the grave developmental
losses that continuously accrue to developing countries who lose income from
taxation as a result of these huge financial leakages. Monies that could have
been used to build schools, provide basic services such as clean water and
toilets are rather siphoned into the bank accounts of faceless and nameless
individuals who use their monies and influences and of course, the advice of
lawyers and accountants to deprive legal states from their hard earned tax
incomes.
Infact, tax campaigners have gone as far as to
infer to the value of taxation as a crucial instrument for the realisation of
human rights. This is based on the rationale that taxes enable governments to
mobilise resources
needed for providing essential public goods and services and tax policies also help
in redistributing the wealth preventing inequality and allowing realization of
human rights. Unfair tax incentive, regressive tax systems and weak tax
authorities give rise to leakages that could have been used to fund much needed
public goods and services.
In June 2011, The UN Council on Human Rights
adopted the Guiding Principles on Business and Human Rights. The principles form
a framework that comprises the duty of states to prevent against violations of
human rights, corporate responsibility for respect for human rights and better
access for victims to effective remedy.
People power and the
future
I sincerely look forward to more African countries
looking into the information provided by the panama papers and working jointly together
to help block the leakages from our shores. It is not only immoral, it is
impudent! As I applaud the work of the High Panel On Illicit Financial Flows as
well as the ongoing work being done by economic justice campaigners in Africa,
we must of a right , percolate the gravity of this to local citizens to take
action against their leaders. This is the only sustainable action in a democratic
environment.
I end with one of my favourite quotes "Never doubt that a small group of thoughtful, committed citizens
can change the world;
indeed, it's the only thing that ever has." - Margaret Mead.
Power to the
People!!!
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