Addis Ababa, 7 April 2014 (ECA) - Billions of US dollars disappear each year without a trace from developing countries generally, and Africa in particular, ending up in enclaves – so called tax havens or in developed countries. A significant part of this outflow is driven by multinational companies seeking to evade taxes where they operate. Recent research shows that the sum that leaves developing countries each year as unreported financial outflows, referred to as illicit capital flight, amounts to as much as ten times the annual global aid flows, and twice the amount of debt developing countries repay each year.
Capital flight represents a higher burden in Africa than in other regions. Thus, actions to stop illicit capital flight must be taken by decision makers such as senior policy makers in both Africa and in the West if they are to succeed. The issue of capital outflow from Africa and the absorption into western economies, therefore, deserve attention and require concerted effort. Through greater transparency in the global financial system, illicit outflows could be curtailed.
There is also a need for specific measures at country level. Such measures would include the building of legal frameworks better suited to address the problem, awareness-raising about the links between tax evasion, tax revenue and social services, as well as capacity building of tax authorities. Tax administrations in developing countries are often poorly resourced and lacking in staff capacity. Inadequate technology and capacity to collect taxes, as well as the inefficiency and lack of expertise of tax authorities, create loopholes that otherwise could be plugged.
In response to this challenge, the African Economic Research Consortium’s (AERC) Senior Policy Seminar (XVI) selected the theme Capital Flight from Africa. This event will be jointly hosted with United Nation Economic Commission for Africa (ECA). AERC senior policy seminars are forums designed specifically to bring together senior policy makers from sub-Saharan African countries to exchange experiences and deliberate on topical issues pertaining to sustainable development of their economies. Participants in these seminars are drawn from the highest levels of government, including the presidency, ministers, governors of central banks, heads of civil services, permanent secretaries and heads of government agencies and parastatals. The two-day seminar that opens on Wednesday 9th April at 9:00am will be heldat the UN Conference Centre, Addis Ababa, Ethiopia.
Note to Editors:
Accomplished researchers and respected scholars will share their ideas with distinguished senior policy makers in the African continent in various sessions. The first session will see Leonce Ndikumana, University of Massachusetts, Amherst, USA kick off the proceedings with a presentation titled Capital Flight from Africa: An Overview. The second session will feature the second presenter, Gamal Ibrahim, ECA, who will take the discussion a notch higher with a paper on Illicit Financial Outflows: An African Pressing Problem Necessitating a Global Solution. Melvin Ayogu, American University of Sharjah, UAE, will then present the third paper on Capital Flight and Asset Recovery.
Daniel Guarara, African Development Bank, will kick-start the second day by presenting the fourth paper, Illicit Financial Flows and the Problem of Net Transfers from Africa: 1980-2009.
The lead discussants for these four papers are respectively, Eric Ogunleye – Office of the Chief Economic Advisor to the President, Nigeria, Arsene K. Kouadio – Executive Director, Institut Pour le Development/University of Cocody-CIRES, Cote d’Ivoire, H.B Lunogelo – executive Director, ESRF, Tanzania, and Maria Esperance Majimeja – Deputy Director, Research and Statistics, Bank of Mozambique. There will be floor discussions by participants after each presentation.
The closing session of the senior policy seminar is a public/private sector round table, chaired by Dr. Anthony Maruping, Commissioner of Economic Affairs, African Union Commission, that will look to synthesize the discussions on the challenges of capital flight from Africa and what African role players can do to mitigate capital flight, particularly given the global nature of capital flight”.
AERC is a leader in policy-oriented economic research in the continent. The Consortium was established in 1988 as a public not-for-profit organization devoted to building capacity for economic policy research into problems pertinent to the management of economies in sub-Saharan Africa. This is carried out through two main programmes: research and training. In response to the special needs of the region, the AERC Research Programme uses a flexible approach to improve the technical skills of local researchers, allow for regional determination of research priorities, strengthen national institutions concerned with economic policy research, and facilitate closer ties between researchers and policy makers. The Training Programme augments the pool of economic researchers in sub-Saharan Africa by supporting collaborative graduate programmes in economics – at both master’s and PhD levels – as well as improving the capacities of departments of economics and agricultural and applied economics in public universities. AERC is supported by donor governments, private foundations and international organizations.
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For more information about this workshop or AERC, please contact:
The Executive Director
African Economic Research Consortium (AERC)
Middle East Bank Towers, 3rd Floor, Milimani Road,
Tel: (254-20) 273-4150 / 273-4157
Fax: (254-20) 273-4173
External Communications, Media Relations Section
UN Economic Commission for Africa
P.O Box 3001, Addis Ababa
Tel: +251 115 44 50 98
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