Corruption

The International Asset Recovery Mechanism as it currently operates is highly unfair and disadvantageous to developing African countries. It is a system frost with power game, colonial vestige, and the undermining of the African sustainable development agenda. Indeed, African countries persistently suffer from the detrimental impact of outward illicit financial flows (IFFs), stemming from complex and multifaceted criminal and commercial activities. Latest IFFs estimates from the United Nations Conference on Trade and Development Organization for Economic Cooperation and Development and African Development Bank (AfDB) reveal an ugly illicit financial flight that continues to deprive the continent of huge domestic resources and economic prosperity.

Over the past few decades, we have seen an emerging form of neoliberal discourses on Africa that focus on emergence, as the continent has moved from being framed as the world’s “problem case” to the exciting new frontier of “Africa Rising". This has pushed neoliberal capitalists to see Africa as a continent of the future that is about to achieve transformations and socio-economic progress if it follows the orthodox advice of opening its market and accepting negative integration into the world economy. However, fuelled heavily by GDP growth rates, the “rising” narrative has been adept at obscuring a reality of widening wealth inequality and persistent poverty among the majority sections of the continent’s population even while witnessing the emergence of mega shopping malls and cell phones in almost every hand. Additionally, the myth of an Africa that achieves growth has overshadowed the quality of this growth as it does not lead to an improvement in the living conditions of Africans but instead breeds illicit financial flows (IFFs).

Climate finance is critical in addressing climate change because of the large-scale investments required for the climate transition. Climate finance refers to local, national or transnational financing – drawn from public, private and alternative sources of financing that seek to support mitigation and adaptation actions that will address climate change. The United Nations Framework Convention on Climate Change, the Kyoto Protocol and the Paris Agreement call for financial assistance from Parties with more financial resources to those that are less endowed and more vulnerable to the adverse effects of climate change. Despite the gathering momentum when it comes to climate finance, developed nations have so far failed to meet their long-standing climate pledges. Developed countries fall significantly short of their commitment to contribute $100 billion annually to support climate actions in developing nations. There remains a substantial financial gap in climate finance in Africa, yet climate disasters cost between 5 and 15% of the Gross Domestic Product (GDP) each year. According to the United Nations Economic Commission for Africa (ECA), the implementation of African Nationally Determined Contributions (NDCs) requires nearly $3 trillion, including about $2.5 trillion between 2020 and 2030. The need to fast-track climate finance is urgent and undeniable. However, Parties should also take into account the question of financial integrity in the climate transition. Transparency International defines financial integrity as “a financial system that operates in a clean, transparent and accountable way”. Tax transparency, fiscal transparency, procurement and contract transparency, and beneficial ownership transparency are prerequisites to financial integrity.

The Gabonese duffel bags of cash televised in September this year demonstrate the inadequacy of existing measures to stem state-abetted graft. The African Union’s High Level Panel (HLP) on IFFs promotes policy harmonization, however, its non-binding provisions slip towards toothlessness, given that states themselves drive SIFFs. Implementing the HLP needs muscular institutional ruptures with graft. Crucially, existing anticorruption measures are crippled by the fact that SIFFs blur the lines between licit and illicit finances. Therefore, policymakers should embed anti-corruption norms within the constitution to enable the people to revolt against enduring SIFF regimes such as the Bongo dynasty.

The exponentially growing discomfort around Illicit Financial Flows (IFFs) globally is an indicator of the undesirable effects that result from the IFFs, ranging from social, economic and even political consequences. There is a general concurrence that IFFs take away substantial amounts of finances from the developing countries, which finances could otherwise be utilised in domestic investments, provision of public services such as education, security, health etc., and offsetting foreign debts. It is on this basis that discussions about IFFs in developing countries should not be postponed.

It is common knowledge that several African economies have a nagging public debt burden. However, in real terms, outside of Oceania, Africa has the lowest public debt in the world. The challenge with Africa is that most of its debt is owed to non-African creditors and the debts are contracted in foreign currency thereby exposing African countries to currency volatility. Another challenge is that these non-African creditors consider the African market as risky, thereby charging higher interest on our loans. While African countries are struggling to finance public debt which ordinarily should be within the capacity of African economies to accommodate, it is estimated that Africa loses about $140 Billion annually to corruption.

There is no gainsaying the fact that Illicit Financial Flows (IFFs) constitute a major impediment to Africa’s sustainable development. In fact, IFFs have a direct impact on a country’s ability to raise, retain and mobilise its own resources to finance sustainable development. Its negative impact further includes draining a country’s foreign exchange reserves, reducing domestic resource mobilization, preventing the flow of benefits of foreign direct investment, and worsening insecurity, poverty and economic inequality.

This case has also, sadly, brought together a combination of examples of what some individuals will do for money. Driven by greed and prepared to use corruption; giving no thought to what their enrichment would mean in terms of harm for others. Others that in the present case include the people of Nigeria, already let down in so many ways over the history of this matter by a number of individuals in politics and administration whose duty it was to serve them and protect them.