A crusade to end illicit financial flows (IFFs) has been launched with the warning to the Ugandan and other African governments to end the criminal activities that is bleeding the continent to death.
The campaign dubbed “stop the bleeding” is a continent wide initiative to stop IFFs from Africa.
Uganda is one of the African countries that is hurting from the illicit trade which manifest itself in several forms including; overpricing, transfer pricing, tax evasion, money laundering, corruption and false declarations, all denying the country the much needed revenues that could unshackle it from donor dependency.
Illicit financial flows refer to money illegally earned, transferred or used. It is also known as the flow of money that has broken laws.
These activities are propagated by intricate network that crosses multiple jurisdictions. Such activities drains foreign exchange reserves, reduce tax collection, cancel out investment inflows and contribute to worsening poverty.
Currently, Africa is estimated to be losing more than $50 billion (about 162trillion) a year in Illicit Financial Flows, an amount of money the member of the Pan African MPs network on IFFs and tax, Ms Kanyisile Litchfiled Tshabalala, said can transform health facilities across the continent.
Civil societies in Uganda, among them the Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI), Action Aid and Civil Society Budget Advocacy Group (CSBAG) estimated that Uganda alone loses an average of $509million (more than Shs1.5trillion) in illicit outflows every year.
This amount is an equivalent of 60 years budget for the National Bureau of Standards (UNBS), a government institution mandated to among others get rid of substandard and potentially life-threatening counterfeit products flooding the country.
The African Union/Economic Commission for Africa High Level Panel on Illicit Financial Flows from Africa report, chaired by former South African president Thabo Mbeki, established that illicit trade is being propelled mainly by multinational companies.
And this is further perpetrated by corruption including at the government level.
Speaking at the launch of Stop the Bleeding campaign last week in Nairobi, Ms Tshabalala, said African leaders need to stand up to forces that drain Africa its resources for that will be a step towards stopping IFFs from Africa.
She said that lack of accountability explains why IFFs is rampant in Africa, largely explaining why African countries, among them Uganda, is not transforming as fast as it should be compared to the Asian tigers—the high-growth economies of Malaysia, Singapore, Hong Kong, Taiwan and South Korea.
Representing US-Africa network, Ms Reggy Anyango said, IFFs if not stopped has the potential to support terrorism activities which is a global problem now.
Speaking on behalf of the International Trade Union Confederation-Africa, Mr Joel Akhator Odigie, said government must not allow the multinationals companies to continue transacting business without paying their fair share of taxes. This is because multinationals have both moral and legal obligation to do so—adequate payment of taxes.
Speaking in an interview in Nairobi, Ms Nelly Busingye, the programme officer SEATINI-Uganda, said the task is now to have the entire population appreciate the dangers that IFFs poses directly to their livelihood.
If this is done, she said the needed changes to deal with the criminal activities propagated by big companies and aided by corrupt government officials, will buckle under the pressure of voices of reason demanding in unison the necessary changes.
The main goal of the campaign is to stop IFFs from Africa. The aim of the launch is to implement one Africa Campaign on IFFs that is led and driven by African civil society organisations with support from other partners including international non-governmental organisations (INGOs).
Stop the bleeding campaign is mainly is spearheaded by the Interim Working Group (IWG) of the African IFF Campaign Platform comprising six Pan-African organisations namely Tax Justice Network-Africa (TJN-A), Third World Network-Africa (TWN-Af), Africa Forum and Network on Debt and Development (AFRODAD), the African Women’s Development and Communication Network (FEMNET), the African Regional Organisation of the International Trade Union Confederation (ITUC-Africa) and Trust Africa supported and joined by the Global Alliance for Tax Justice (GATJ.