Southern Africa: SADC region losing billions in trade-related illicit outflows & external government debt payments every year
‘The Money Drain: How Trade Misinvoicing and Unjust Debt Undermine Economic and Social Rights in Southern Africa’ September 2019
According to a new report, The Money Drain: How Trade Misinvoicing and Unjust Debt Undermine Economic and Social Rights in Southern Africa, launched today by ACTSA on the eve of the SADC Summit in Dar es Salaam, rich countries may be accused of neo-colonialism if they fail to assist SADC countries to address these financial outflows. While SADC governments are primarily responsible for realising the economic and social rights of their citizens, the governments of rich countries have significant legal and moral obligations to support these efforts. The report demonstrates that the scale of unrealised economic and social rights in Southern Africa remains immense. For example, the youth unemployment rate is 31%, 5.4 million people are undernourished, there are at least 617,400 new HIV infections a year, and more than 40% of the population in 12 countries do not have access to basic sanitation services.
The SADC region is losing even more – at least US$21.1 billion a year – from external government debt payments. The external debts of governments are not necessarily problematic for their citizens. But some of the region’s external public debt is illegal, some is odious, and some is illegitimate. The report calculates that Angola alone is drained of US$12.1 billion a year in principal and interest payments on public debt. Moreover, Southern Africa, parts of which were devastated by Cyclones Idai and Kenneth earlier this year, is owed major climate debts by rich countries. Multilateral institutions dominated by rich countries, such as the Organisation for Economic Co-operation and Development (OECD) and the G20, have raised concerns about trade misinvoicing and debt in poorer countries. Yet progress on tackling trade misinvoicing is fragmented and slow, and virtually nothing has been achieved to ensure debt justice.