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Article

Africa still losing billions through illicit financial flows by multinational corporations despite increasing awareness of the problem

"Africa still leaking billions through tax evasion"

As conferences continue to be held in Africa about the theft of monies due to us by multinationals, the continent continues to be short-changed by lack of collaboration and information sharing…Until African countries build a system to share information on tax evasion, as they should, the dream of stemming illicit capital flows will remain just that...Illicit capital flows are funds that rightfully belong to the fiscal pool of African and other developing countries, but instead are channelled out through aggressive tax planning by multinational corporations...

Instead of paying their due taxes in the countries where they generate their income...[multinationals] shift every expense to the tax haven (or their home country), in order to pay as little tax as possible. Such companies easily operate a loss-making enterprise for years in one country, burdening it with group expenses and costs…In Africa, notable examples include the $300m settlement between Tanzania and the world’s largest gold producer, Barrick Gold Corporation. Barrick’s Acacia Mining had been accused of operating illegally in the country and evading taxation. When the settlement was agreed upon in October 2017, the management of Acacia did not concede culpability, but let go of its CEO Brad Gordon and chief financial officer Andrew Wray two months later...

For their failure to collaborate in rooting out this corruption, African governments are as guilty as the multinational corporations and the fraudsters and their banks in diverting funds that should go towards attempting to improve the quality of life of the continent’s hundreds of millions of poor people.