The ONE Campaign recently released a report called The Trillion Dollar Scandal, which looked at how mainly African countries were losing a trillion dollars a year, especially from the mining and natural resources sector, to corruption, illicit financial flows, money laundering, tax evasion and phantom firms.
The report reveals that at least a trillion dollars is taken out of developing countries each year through corruption, illegal tax evasion, the use of shell companies and shady deals to the detriment of development programmes. This is a scandal of immense proportion.
These numbers should make everyone take notice and make African governments sit up. It is no wonder that since the Millennium Development Goals were adopted in the 2000, their attainment in Africa have been elusive. Africa is the only continent where poverty in some parts of it is actually increasing. When governments are robbed of their own resources to invest in health care or food security through corruption, it costs lives.
This makes corruption a deadly killer that must be urgently stopped. It is estimated that each year, as many as 3.6 million deaths could be prevented in Africa and other developing countries if action was taken to end the culture that allows corruption and criminality to thrive.
In sub-Saharan Africa, for example, an additional 10 million children per year could be educated if corruption was curbed, half-million primary school teachers could be hired, over 11 million people living with HIV/Aids could have ARVs provided and 165 million vaccines paid for.
In Nigeria is it estimated that the country has lost $400 billion to ‘oil thieves’ since the country gained independence in 1960. This money lost could vaccinate all of Nigeria’s 29.7 million children under the age of five, saving more than one million lives over time. 168 million Nigerians could get a bed net to protect against malaria; all 3.2 million HIV-positive Nigerians could be provided with life-saving antiretroviral drugs; and more than 494 000 additional primary school teachers could be hired, resulting in an 86 percent increase in Nigeria’s teacher workforce.
This is true for Nigeria as it is for Namibia, South Africa, DRC, Ghana, Equatorial Guinea, Zimbabwe and Zambia where positive growth numbers do not translate in a reduction in poverty as grand corruption particularly in the extractive sectors robs these nations of valuable resources that could be used to fund the fight against extreme poverty, disease and hunger.
With the scandal out, now is the time to create transparent governance structures to combat the root cause of this problem ensuring that Africa’s vast natural resources – in mining, in oil and gas – begin to transform and benefit Africa.
The siphoning of the trillion dollars from poor nations not only exposes major weakness in the national governance of natural resources. It is fuelled by loopholes in the global financial systems that enable operations of multinational companies operating in poor countries to hide money abroad. The trillion-dollar scandal is a global problem that calls for global solutions.
Completely stopping this requires commitment and action from world leaders to remove the enabling conditions in their countries that make this costly corruption continue and thrive. As the G20 meet on 15 and 16 November 2014 in Brisbane, Australia to discuss boosting economic growth and international tax, ONE is calling for action in four areas: To ensure full and mandatory public disclosure in the oil and gas minerals extractives sector, with country by country and project by project payments revealed to citizens, making fully public the ownership of companies. Currently anonymous companies aid and abet money laundering for organised crime, human traffickers, drug and gun smugglers and corrupt officials.
Thirdly they must facilitate automatic information exchange of tax information between developed and developing countries; and fourthly, make government budgets transparent and open to the public.
According to the Open Budget index, only 3 percent of African citizens live in countries with sufficient public information on national budgets.
In particular citizens at a local government level must be able to walk into local municipal authority offices and ask local officials specific questions on how local government budgets are being spent. This is sadly too rare and means citizens and the local media cannot follow the money and monitor what should be going into delivering basic lifesaving services.
In our natural resources and in our people we have the wealth and power to not just end extreme poverty and preventable needless child and maternal deaths, but also ensure every African – indeed every citizen in every nation globally – has access to decent basic services and chance at a good life led with dignity. But perversion in our political and commercial systems eats away many dreams of this kind of life. That task starts not just with our leaders, but with each and every one of us.
• Nachilala Nkombo is Deputy Director at ONE Africa, an international campaigning and advocacy organization co-founded by musician Bono, and which now has nearly 6 million people taking action to end extreme poverty and preventable disease, particularly in Africa to eliminate extreme poverty by 2030.