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Monthly Archives: January 2014

Repatriating Illegal Financial Outflows Back To Africa For Rapid Development And Renaissance in 2014 – Chofor Che , published 23 January 2014 at Africanliberty.org


Illegal financial transactions (IFT) from the continent of Africa remain an impediment to development. Some of these finances are starched in foreign bank accounts with the complicity of corrupt government officials of African states. According to the Mo Ibrahim Foundation in a 2013 publication, from 1980 to 2009, Africa was a net creditor to the world, with a loss of finances to the tune of about $ 1.4 trillion. Central Africa and North West Africa witnessed an annual outflow of $ 30.4 million during the period 2000 to 2009. It is vital to look at the 5 top states in Africa with the largest IFT per capita. It is also important to examine in terms of volume, the top 5 African states with the largest cumulative IFT during the period 2000 to 2009. As a percentage of the Gross Domestic Product (GDP), it is also important to examine the 5 states with the largest cumulative IFT from 1980 to 2009, before suggesting how IFT can be curbed to make the continent more developed in 2014.

Global Financial Integrity 2013 of the African Development Bank (ADB) purports that the top 5 states in Africa with the largest IFT per capita are Botswana, Equatorial Guinea, Gabon, Libya and Seychelles. In terms of volume, the top 5 African states with the largest cumulative IFT during the period 2000 to 2009 were Algeria, Egypt, Libya, Nigeria and South Africa. As a percentage of GDP the top 5 states with the largest cumulative IFT from 1980 to 2009 were Chad, Congo, Djibouti, Equatorial Guinea and Seychelles. In most of these states especially the states rich in natural resources, the natural resource sector happens to be the main source of IFT. Oil and gas exploration as well as the mining and forestry industries in Africa are hard hit by IFT. In African states poor in natural resources, IFT usually emanates from mispricing of trade by companies of all sizes. Corruption in the public procurement sector also remains an area which fuels IFT. Such malpractices include serious money laundering activities. The central governments of African states are usually aware of these illicit transactions especially as most top ranking government officials are involved in such malpractices. Those who are most hit by IFT are the poor masses in Africa who do not have a say in such transactions. A majority of poor Africans have to pay the price especially via heavy taxation.

It is thus vital that in 2014, the international community, national governments in Africa and abroad, the private sector at home and in the diaspora, universities and think tanks all put their hands on deck and change the status quo. Carefully rethinking through a strategy on how unaccounted finances starched in foreign bank accounts especially Swiss accounts, can be repatriated back to Africa may be a first step to take. Policy suggestions to halt IFT may also include Double Tax Avoidance Agreements (DTAA) and Automatic Exchanges of Tax Information (AEI). Africa equally needs a complete reform of her customs services and serious anti-money laundering initiatives. It is also important for corruption to be curbed in the management of public procurement. The activities of multinationals involved in oil and gas exploration as well as in the mining and forestry sectors in Africa are to be encouraged, but not at the detriment of ignorant and poor Africans. It is thus vital for central governments to ensure that these multinationals are not involved in money laundering and IFT. Apart from the above mentioned suggestions, effective financial and administrative decentralization of financial and human resources in African states is also germane to curb IFT. If African governments take some of these suggestions into consideration then curbing IFT can be a reality on the continent.

– See more at: http://www.africanliberty.org/content/repatriating-illegal-financial-outflows-back-africa-rapid-development-and-renaissance-2014-c#sthash.Z9zbnHbN.dpuf

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Posted by on January 30, 2014 in Africa Development

 

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Regional Integration in the CEMAC zone under the peril of implosion – Chofor Che , 11 january 2014


In June 2013 Head of States of Cameroon, the Central African Republic, the Republic of Congo, Gabon, Equatorial Guinea and Chad met during their last summit and agreed amongst other issues that visa requirements would henceforth not be obligatory for citizens of member states circulating in these states. This move was to take effect as from January 1, 2014. These six member states out of the eleven member states of the Economic Community for Central Africa (ECCAS) region share a common currency zone (the CFA Franc) and a monetary zone union called CEMAC (Communauté economique et monetaire d’Afrique centrale). I argued in an article published on the 22 July 2013 by Africanliberty.org that the huge population in these six member states makes it potentially a lucrative consumer market, yet regional cooperation arrangements amongst these countries have not succeeded in unleashing this full economic potential and move it towards economic integration.

Equatorial Guinea and Gabon most especially seem not to be in agreement with decisions arrived at during the June 2013 summit. In other to travel to Gabon for instance, citizens of member states are still requested to obtain a visa. As one who has worked closely with the Gabonese Embassy in Yaoundé, obtaining a visa is expensive and documents especially an invitation letter have to be notarized by local authorities in Gabon and sent to concerned individuals and organizations before they can obtain a visa. The process is very frustrating especially for citizens of the same regional group. The situation in Equatorial Guinea is even worse. On the 6 of January 2014 Cameroonians working at the Equatorial Guinean and Cameroonian border town of Kyo-Ossi were dismayed that the border was closed. Cameroonians who worked across the border were not allowed to carry out their operations. The Equatorial Guinean and Gabonese borders were also shut down. What an aberration when we are clamoring for regional integration. Analysts have argued that a state like Equatorial Guinea is afraid that opening up its boarders to citizens of members states will encourage massive illegal immigration of citizens of member states of the CEMAC zone to the detriment of Equatorial Guineans. This precarious situation in the CEMAC zone impinges on the development of the market for consumer goods while stifling local entrepreneurship. Local producers are left with no choice than to be involved with smuggling and illicit exportation. Why can’t the leaders of the CEMAC zone especially Equatorial Guinea and Gabon not copy from other regional groups like the Economic Community of West African States (ECOWAS) by eradicating barriers like visas for citizens of member states?

The authorities of Equatorial Guinea and Gabon are definitely making a great mistake. Eradicating visa requirements for member states of the CEMAC zone remains a laudable initiative especially as such an initiative would go a long way to facilitate business transactions and economic gains amongst member states of this region. This would definitely unleash the full economic potential and facilitate the move towards economic integration in the region. The eradication of the visa requirements for these six concerned states of the CEMAC would ease the circulation of goods and agricultural produce in these member states. Closing the boarders by Equatorial Guinea is definitely a wrong policy move especially in an era of globalization. Such a move has never stopped illegal immigration and illicit smuggling of goods. The Head of State of Equatorial Guinea needs to rethink fast about such a measure before it causes diplomatic and economic tensions between member states of the CEMAC zone. It is also important that Heads of State of these member states put in place other measures like curbing heavy taxes in their respective member states so as to encourage local business initiatives as well as small and medium size enterprises. Encouraging partnership cooperation among the private sectors of these member states so as to facilitate rapid regional integration and economic growth is also very vital for regional integration. If such measures are not taken into consideration, the CEMAC region will continue to be considered a failure in terms of governance, democracy and economic growth because such porous policies have contributed to the region’s poor image regionally and internationally.
– See more at: http://africanliberty.org/content/regional-integration-cemac-zone-under-peril-implosion-chofor-che#sthash.Gk2z8lhV.dpuf

 
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Posted by on January 12, 2014 in Africa Development

 

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