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UN reveals Africa losing billions due to illegal financial flows from the continent; Africa described as ‘net exporter in UNCTAD report’

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There is a reason why Robin Hood is an adored, revered figure till date. Even though the young fictional character with swift leg movements and a knack for crossbows is a tale of sorts, his beliefs are still held in high regard. The character of Robin Hood is believed to be based on the lives of real people, people who put a whole new meaning to the word “thief”. Robin Hood’s principle was simple; steal from the rich and supply to the poor. As simple as his agenda was, blood was poured, lives were taken and despair was brewed. The rich people in his era retaliated, harming as many Robin Hood sympathizers as possible. Yet, Robin Hood still amassed loyalty amidst the poor communities, they saw him as their hero. Robin Hood (and the real life people who abided by this character’s sentiments) saw no reason why the rich should get richer, buffing up their pockets at the expense of the poor people. Even in the modern times, the rich do seem to get richer while the poor get poorer. The gap widens everyday as the rich find new, morbid ways to fatten their accounts. Sadly, Robin Hood is simply a tale for children now, a phantom never to be seen. We just watch as we are robbed, we watch us our assailants cripple our economies by stealing from right under our noses.

A study conducted by the UN showed that Africa loses an approximate of $89 billion a year due to illicit financial flows which includes illegal maneuvers such as theft and tax evasion. This amount of money is more than the country receives for developmental aid. The $89 billion is the most recent figure. According to United Nations Conference on Trade and Development’s (UNCTAD) 248 paged report, the amount of money flowing from Africa in illicit financial flows has been increasing with each passing year.
This latest figure ($89 billion) according to Junior Davis, head of policy and research at UNCTAD’s Africa division, is an underestimate. Apparently there is limited data therefore running the correct numbers is difficult.

This report was released on Monday and UNCTAD expressed their concern over Africa being a net exporter of capital. The UN body claimed that Africa, a continent who’s most countries rely on aid, is ironically a net creditor to the world. This is attributed to the financial flows that happen to be illegal.

Mukhisa Kituyi, the Secretary General of UNCTAD, said that, “Illicit financial flows rob Africa and its people of their prospects, undermining transparency and accountability and eroding trust in African institutions.”

What exactly are these illicit financial flows and what is the UN doing to bridle them?

Illicit financial flows

Nearly half of the total annual figure of $89 billion is accounted for by Africa’s exports such as gold, diamonds and platinum.
According to the UNCTAD report, African gold accounted for 77 percent of the total under-invoiced exports worth $40 billion. This was in the year 2015.

The thing is, the countries importing these minerals know the real values of these pieces. After getting them at cheaper prices from Africa, they proceed to sell them at high costs, reaping unimaginable profits. There is also the erosion of tax base in Africa. At the end of the day, countries abroad get richer while Africa gets poorer.

UN’s strategy

In 2018, the UN General Assembly vowed to put a stop to these illicit financial flows that are deeply affecting Africa. UN has reported that this, putting a stop to Africa being robbed, is their major priority.
The UNCTAD report urged African countries to draw on the reports so as to present renewed arguments in international forums.

It is also important that African countries understand the true value of what they are trading while paying keen attention to matters of tax evasion.

I don’t know about you, but there are a lot of people in this continent who could have benefitted from that $89 billion.
I do suppose that the UN is our modern day Robin Hood. Of course, this is after removing the blood and gore from the equation.

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