This was contained in a statement from Martin Tsounkeu, General Representative, Africa Development Interchange Network (ADIN) and F/Chair of the Commonwealth Civil Society Advisory Committee (CSAC).
Africa Network for Environment and Economic Justice (ANEEJ), represented by its Executive Director, Rev. David Ugolor, is a panelist at the event.
The statement said that the event was organized by the African Forum and Network on Debt and Development (AFRODAD) in Collaboration with Africa Development Interchange Network (ADIN), a member of the African Working Group (AWG) on Sustainable Development.
Key topics of the side event will include the following:
• The Rising awareness among African CSOs on the impacts of IFFs on industrialization in Africa particularly in resource rich countries –
• A discussion on the urgent need for resource dependent economies to industrialize particularly in the face of fluctuating commodity prices.
• An engagement with CSOs and decision-makers and share experiences of how the national and continental level efforts to enhance domestic resource mobilization are being impacted by IFF.
• A discussion on the main obstacles to progress, with emphasis on the role of secrecy jurisdictions and tax havens.
KEY ASSUMPTIONS
According to the statement, it is increasingly clear that tax abuse along with other forms of corruption constitute the bulk of Illicit Financial Flows (IFF), which drain much needed public revenue, especially from developing countries.
Major public scandals brought to light by the many recent leaks, the Panama Papers and Paradise Papers, exposed how many wealthy individuals and multinational companies are involved in illicit flows.
The also exposed how accountants, lawyers and banks provide professional support, and how some major economies serve as conduits whereas the offshore financial centers serve as “sinks,” providing systemically institutionalized facilitation of IFF.
The pioneer work that led to the recognition of IFF as a development challenge came from the High-Level Panel on Illicit Financial Flows out of Africa, which was set up by the African Union and the UN Economic Commission for Africa and provided a comprehensive definition as to what elements constitute IFF.
“The various means by which IFFs take place in Africa include abusive transfer pricing, trade mispricing, mis-invoicing of services and intangibles and using unequal contracts, all for purposes of tax evasion, aggressive tax avoidance and illegal export of foreign exchange.”
This definition underpins the multilateral agreement within the SDG process included in target 16.4 to “significantly reduce IFF” by 2030.
The session looks at illicit financial flows in the extractive sector as a threat to industrialization by draining the economy of a potentially rich resource, domestic capital, which is required to promote industrial development.
Arguably, the capital that illicitly exits African nations particularly in the mining sector could well be reinvested for further beneficiation/processing of raw materials into intermediate and finished products and in the development of productive capacities in manufacturing or firm expansion.
Focus areas of the Session – IFF trends in the developing and emerging economies – Drivers of IFFs – Impact of IFFs on industrialization with a focus on resource rich countries – Agenda of Action: potential safeguards for curbing IFFs Session Format Highly interactive 90 minute session.
This will include framing presentations and moderated active dialogue with the audience, and open debate Resource Persons.
On hand to provide incisive contributions to this session is Rev David Ugolor, Executive Director of the Africa Network for Environment & Economic Justice (ANEEJ), together with eminent stakeholders like Dr. Fanwell Bokosi of AFRODAD, Dr. Martin Tsounkeu of ADIN and Seydi Gassama of the Amnesty International.
The session will be moderated by none other than Georgine Kenge of the AFRODAD. It promises to be a robust session.
