(PHOTO CREDITS: Courtesy AFRICAN NEWSPAGE)

Newspage: According to the Economic Commission for Africa (ECA), sub-Saharan African countries loose up to USD50 billion every year to Illicit Financial Flows (IFFs). What does this loss means to Africa’s development, in terms of denying African citizens access to basic social services such as health, education and water?

Mosioma: Historically, the African continent and indeed other developing countries, have been seen as net recipients of aid; net recipients of support from abroad. What this study did was turned the conversation on its head in the sense that it provided evidence that not only was the continent not a net recipient but it was actually a net creditor to the world. It showed that there were more resources leaving the continent than coming in.

Yet, this figures are but a tip of the iceberg because even when we talk about USD50 billion, it is just an estimate; it doesn’t represent the actual figures, since a big part of these flows happen in opacity and darkness. Such that you don’t have the ability to really determine the actual numbers, and it is for this reason that the ECA report said for us to be able to determine the actual figures, we will need to increase transparency in the financial systems.

Moreover, what these figures do is, firstly, repudiate the perception of the flow of funds globally. Secondly, the reason why we have these figures is due to the nature of the global financial system which has been designed in such a way that it facilitates outflow of resources than it does inflow of resources, which basically points to the systemic flaw in the global financial systems. Thirdly, this numbers by themselves don’t tell you much, but if you put these figures in the context of the financing gap particularly for the SDGs and Agenda 2063, then you will realize the enormity of these figures.

(Photo Credits: Courtesy Econews Africa)

By Professor Uche Ewelukwa Ofodile, SJD (Harvard)

On March 2020, at the direction of President Donald J. Trump, the United States Trade Representative (USTR) Robert Lighthizer notified Congress that the Trump Administration will negotiate a free trade agreement (FTA) with Kenya. “Under President Trump‘s leadership, we look forward to negotiating and concluding a comprehensive, high standard agreement with Kenya that can serve as a model for additional trade agreements across Africa”, said Ambassador Lighthizer, in the said letter. According to the USTR, the proposed FTA intends to ―build on the objectives of the African Growth and Opportunity Act (AGOA) and serve as an enduring foundation to expand U.S.-Africa trade and investment across the continent.

If and when the Kenya-U.S. FTA negotiation commences, the U.S. will not be negotiating in a vacuum. The U.S. will be negotiating the Kenya-U.S. FTA against the backdrop of some recent trade negotiations involving the United States and against the backdrop of key U.S legislations, executive orders, and policy actions that collectively shed light on the negotiating priorities, strategies, and motivations of the United States. Key legislations, executive orders, and policy actions include:

1. Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (a.k.a. Trade Promotion Authority)
2. United States-Kenya Negotiations: Summary of Specific Negotiating Objectives, (May 22, 2020). On May 22, 2020, Office of the U.S. Trade Representative (USTR) released the specific negotiating objectives of the proposed U.S.-Kenya Free Trade Agreement.
3. The Trump Administration, “America First” Strategy.

Comprehensive trade deals of the size envisioned by the United States are not easy to pull off. The United States will undoubtedly be the more dominant player in a Kenya-U.S. FTA negotiation. Indeed, experts agree that few countries come close to negotiating on parity with Washington. For both sides, it will undoubtedly be a long path to negotiations. Consequently, it is important that the Kenyan Government is fully briefed on:

1. The critical pillars of President Trump‘s trade policy.
2. The critical aspects of President Trump‘s trade strategy and capacity.
3. The important lessons that Kenya could draw from recent trade negotiations and/or deals involving the United States.
4. The potential risks to domestic regulatory space of a comprehensive Kenya-U.S. FTA.
5. The potential risks to domestic and regional policy coherence of a comprehensive Kenya-U.S. FTA.
6. Controversial issues that might prolong talks.

(courtesy: GLOBAL ALLIANCE FOR TAX JUSTICE)

The COVID-19 pandemic exacerbates the wealth redistribution crisis and those hit harder are women and vulnerable groups at the intersections of inequalities. Economic experts from civil society highlight the many alarm bells ringing, that all point to the need for taxation reform to ensure fair distribution of resources. We simply won’t tackle this crisis conjuncture without tax justice.

By Caroline Othim, Global Alliance for Tax Justice and Roosje Saalbrink, Womankind Worldwide as Co-coordinators of the GATJ Tax and Gender Working Group.

How did we get where we are?

The COVID-19 crisis reveals failures of neoliberalism and patriarchy: Evidence shows that the COVID-19 pandemic is deepening pre-existing inequalities and exposing vulnerabilities in our current social, political and economic systems brought about by neoliberalism informed by capitalism, patriarchal and racist systems of discrimination and a history of colonialism. People in all countries at all levels of development are affected but countries in the Global South and particularly women and vulnerable groups are hard hit as governments and health authorities strive to limit widespread infections of COVID-19 and mitigate economic fallout. While neoliberalism and patriarchal norms continue to undermine, subvert and ignore women’s rights.

Industrialised levels of tax evasion and avoidance has left many countries lacking the resources to fund public services. In consequence, healthcare systems in countries in the Global South are also woefully understaffed and underfunded with public healthcare workers missing personal protective equipment like masks, gloves and isolation centres lacking ventilators for critical patients. Millions of people in the Global South also do not have access to adequate healthcare and live in crowded informal settlements where social distancing is impossible, many more also do not have access to clean water to practice hand washing techniques which is now a privilege for some in the society.

“As with the climate crisis, the heaviest COVID-19 burden is loaded on those most vulnerable. The poorest are affected first and worst.”

(PHOTO CREDITS: Courtesy EURACTIV )

The question of tax avoidance and financial information exchange remains a sore point for EU-African relations, and the European Commission’s annual lists of ‘non-cooperative’ countries on tax and money laundering laws have done little to improve the situation.

Botswana, Ghana and Zimbabwe joined Mauritius in being publicly named and shamed by the European Commission in May on its EU list of high-risk third countries with deficiencies in their fight against money launderers and terrorism financing.

The Commission insists that the listing is for countries that “pose significant threats to the financial system of the Union” because of failings in tackling money laundering and terrorism financing.

Inclusion on the EU list means that banks and other financial institutions will need to conduct enhanced due diligence (EDD) measures in any transaction or business relationship with a person established in a high-risk third country. Meanwhile, companies located there are prohibited from receiving EU funds.

While Mauritius was warned at the start of the year that it faced being penalised because of its banks’ failure to tackle terrorist financing, several of the other countries were surprised by their listing.

The Ghanaian government complained that the listing “does not reflect Ghana’s anti-money laundering regime.”

The Commission’s country recommendations now have to be approved by the European Parliament in order to come into force in October.

Much of the frustration against the EU’s tactics is because the international rule-book on tax avoidance and money laundering is set by the Paris-based Organisation for Economic Co-operation and Development (OECD), a group of 35 wealthy nations which does not include a single African country.

(PHOTO CREDITS: Courtesy International Center for Tax and Development)

The OECD secretariat recently proposed a “stock taking exercise” to “re-examine how international tax rules currently meet the needs of developing countries” leading potentially to a “new deal on international taxation as part of the international effort to rebuild economic life in the post Covid-19 era.” The OECD’s Pascal Saint-Amans has suggested that this may be a third pillar, in addition to the two-pillar global negotiation process currently underway.

We asked recent ICTD contributors on international tax for their ideas and suggestions for what a ‘new deal’ should look like for developing countries, and received ten submissions from writers on four continents:

(PHOTO CREDITS: Courtesy DAILY NATION)

The East African Community already had its fair share of woes, way before the Covid-19 pandemic struck.

Burundi had, twice consecutively, frustrated convening of the 20th summit of EAC of Heads of State. Rwanda and Uganda have been on each other’s necks for more than two years. Tanzania and Kenya, on the other hand, continue their protracted duel on trade barriers.

These woes even had some pundits already prophesying a clear path towards disintegration of the EAC in the not-so-distant future.

But the manner in which the bloc has conducted itself in responding to the Covid-19 pandemic, and rolling out mitigation measures, has been depressingly inadequate. It has revealed just how hollow and incompetent the union remains.

INTERNATIONAL COOPERATION

To step back a bit, the EAC is established and buttressed on the idea of international cooperation, multilateralism and regional integration.

By its own creed and stated objectives, one would expect that a regional, intergovernmental organisation of its stature would step up to the challenge and live up to its bidding when most relevant.

(PHOTO CREDITS: Courtesy THE SOUTHERN TIMES)

Windhoek The COVID-19 pandemic has left African governments at crossroads in terms of policy measures to stem the impact of the pandemic on their fragile economies, Tax Justice Network-Africa (TJNA) has said.

On one hand the countries are trying to consolidate their revenues to support emergency measures resulting from the pandemic; yet on the other hand they are under pressure to provide tax stimulus relief to businesses, private sector and citizens directly as a cushion from the inescapable economic downturn.

Moreover, the governments still require tax revenue to use for the interventions in response to the virus; and yet businesses are either shutting down or operating on low efficiency due to the lockdown and social distancing measures in place to fight the pandemic.

Many of the steps being undertaken in the fight against the spread of the pandemic are limiting African governments from collecting tax revenue from international trade.

In an interview, TJNA Executive Director Alvin Mosioma said many African countries are largely raw material exporters and with the current COVID-19 crisis, tax revenue on exports is adversely affected.

Currently most commercial flights are on ban and some borders are closed due to the pandemic.

Mosioma said the crisis is also worsened by the suffocating tourism sector which is triggered by the grounding of international tourists due to COVID-19 measures. Domestic tourism in Africa does not make a significant contribution to GDP’s as compared to international.

“The majority of African workers are in the informal economy, which means that many are not benefitting from the corporate and personal income tax reliefs being provided by governments. The tax revenue systems in many countries had been compromised by the weakened capacity for tax collection. They have been immensely affected by the tax incentives that were put in place to attract investment, weak policies and outdated laws,” said Mosioma.

He claimed that the COVID-19 crisis has exposed the structural issues that have been in existence even before the virus.

(PHOTO CREDITS: Courtesy DAILY NATION)

African leaders are pushing ahead with calls for debt cancellation even as it turns out each country may lobby its own bids to have the burdens eased amid the Covid-19 pandemic.

Choked with monies borrowed mostly from China and multilateral lenders such as the World Bank, the novel coronavirus disease has added the possibility of countries’ inability to service debts or essentially being forced to pay up and ignore health emergencies.

Ethiopia, Kenya, Senegal and South Africa have recently supported those calls, saying it could make the difference between saving humanity and its economies, or risking death.

Writing in The New York Times on Thursday, Ethiopian Prime Minister Abiy Ahmed argued his country was facing a “dilemma” between paying debts and attending to the sick, both of which cost money.

(PHOTO CREDITS: Courtesy BUSINESS DAILY)

American firms have asked Kenya to fix its weak intellectual property laws as one of the conditions for backing the “model trade agreement” being negotiated by the two states.

In a letter to President Donald Trump’s administration, the US firms, among them distributors of movies, software and books want Kenya to guarantee protection of their patents and trademarks ahead of the proposed free trade agreement (FTA).

“Kenya’s Attorney-General Kihara Kariuki recently highlighted the creative industries’ contribution to Kenya’s economy, citing a study estimating the contribution to be 5.3 percent of GDP and stating, “The protection of the copyrights will essentially put money into the pockets of authors, producers and all creators”,” the letter reads in part.

“Yet Kenya’s copyright legal and enforcement frameworks remain deficient, and piracy, particularly online, remains a significant barrier for the creative industries in Kenya.”

In 2019, Kenya enacted an amendment to its Copyright Act intended to address some of the challenges of the digital age.

(PHOTO CREDITS: Global Alliance for Tax Justice)

While most workers will not have the opportunity to take the streets and raise their challenges, we need to enforce a core message: the COVID-19 disruption is playing out along the lines of class, gender and wealth. And it is playing dirty, revealing a system that fuels inequality

By Caroline Othim and Joy Hernandez

The latest buzz word, COVID-19, depicts a disease that has ravaged many parts of the world, leaving millions of people globally infected and hundreds of thousands dead. The impacts of the global pandemic are not limited to health; it also affected peoples’ lives socially and economically.
While May 1st each year provides an opportunity for workers’ solidarity and protests to commemorate the International LabourDay, this year will be different. Workers will not have the opportunity to collectively and publicly take the streets to raise the challenges that they face everyday in the world of work. This comes in the backdrop of governments’ directives to enforce containment measures for COVID-19, including by imposing quarantines to those repatriated, closing schools, universities, restaurants, and shops; cancelling public and private events, including religious activities; shutting down of transportation services (internal and external); locking down of affected areas and in some places, imposing curfews to restrict movement and observe social distancing, frequent handwashing; and cancelling or banning flights.