This weekend leaders from across Africa committed to addressing the problem of illicit financial flows highlighted in a report by the Mbeki panel which outlines just how extreme the problem of tax dodging is in Africa. I am delighted!
Africa loses $50bn USD due to illicit financial flows every year. By any standards this is a colossal sum of money but it’s a sum that would no doubt completely alter the face of the continent. In places like Zambia a small proportion of the money could change a health services in a country where three in ten women still die due to manageable pregnancy complications. The maternal mortality rate is sixty times higher than Japan.
Countries like Zambia need all the revenue they can get to provide basic services like health, education, water and sanitation. Many countries in Africa are in serious debt and have been largely dependent on aid to fund even the most basic of services. It simply doesn’t make sense that countries lose three times more revenue in financial illicit flows than the aid they receive.
The adoption of the report is definitely the brightest beacon of hope that the continent has had in a long time in the quest for development. Now African countries have a common agenda to increase revenue retention on the continent, an agenda that makes the work of governments, civic organisations and individuals campaigning on tax justice much easier!
When I joined ActionAid five years ago and started campaigning with communities in Zambia for tax justice I never thought that this was something that my country, let alone the entire African Union was prepared to deal with., especially at a time when so many countries across the continent are still try to reach out to foreign investors.
In 2011, when Zambia had its Presidential and General Elections, nearly all the candidates vying for the Presidency were campaigning on the platform of ‘bringing in more foreign investors to boost the economy and accelerate development’ and the focus was on creating more jobs and Zambians were quickly swayed by the slogans of one candidate who promised ‘more money in your pockets’ and they voted for him as President.
Four years later Zambians have just voted for a new president following the death of the Republican President in October last year. Tax justice was a ‘hot’ issue on the election campaigns. Tax justice is one of the three priorities that the wining party (the Patriotic Front Party) committed to focus on once elected to power.
I am incredibly proud that ActionAid Zambia has been a major player in putting tax justice on the agenda. Our work to expose multinational companies who have avoided paying tax has provoked public debates, peaceful demonstrations and has caught the attention of the media.
I was part ActionAid Zambia’s protest marches against Barclays Bank and Vedanta owned Konkola Copper Mines and remember feeling frustrated and unsure about the kind of impact our actions would have. I wondered if the government would listen and would take action. The support of so many Zambians gave us great strengthen, but I still had doubts. Successive governments in Zambia have been largely unresponsive in the past and the picture across Africa is pretty much the same.
When the government responded to our protest on Konkola Copper Mines by announcing they would conduct a forensic audit on the mine I was elated- a fantastic result for our campaign and the future of Zambia- at last the government was listening. Since then the Zambian government has proposed new tax measures for the mining sector, and although mining companies are contesting these measures, the government has stood its ground and has maintained it will not allow the country to continue losing revenue.
These are definitely clear wins for Zambia at national level. But for Zambia to close off all tax loopholes, international cooperation against tax dodging is vital. The adoption of the Mbeki panel report comes as icing on the cake!
Our leaders must implement agreed actions and the report’s recommendations and quickly reduce that $50bn USD figure and start spending revenue from tax on much needed public services.
As for me, I will happily wear my gold suit and continue campaigning for tax justice in my country and beyond until we retain the last dollar on our continent!