(PHOTO CREDITS: Courtesy FINANCIAL FORTUNE)

By Steve Umidha

Despite the growing awareness, developing countries continue to lose more money through illicit financial flows (IFFs) than they gain through aid and foreign direct investment – with IFFs believed to be rising at an alarming rate – 10 per cent annually.

With the onslaught of the global coronavirus pandemic, there are concerns that the scale and scope of Illicit Financial Flows (IFFs) could be increasing.

While focus has previously been put on legal and financial sectors to tackle the menace, experts believe individuals like journalists could help bridge the existing gap.

It is against this backdrop that the Tax Justice Network Africa (TJNA) will be hosting a virtual training for tax justice advocates in Africa. This year marks the 7th Edition with the themed, Tax Justice Advocacy: Increasing Participation of Civil Society Organizations (CSOs) and Journalists through Capacity Building.

(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 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: Courtesy  Economic and Political Weekly)

This Easter period and the Holy month of Ramadhan in two weeks converge with the peak of a pandemic and the glaring inequalities it has exposed.

Covid-19, like death, does not discriminate but the opportunities and circumstances in which death may set its stranglehold are greatly reduced by power and privilege; the privilege to work from home when other livelihoods are hand-to-mouth, the privilege to practice good hygiene and social distancing when sanitation is difficult and space non-existent in some areas; and the power of knowledge to recognise symptoms and to seek to be tested among others. Indeed, some of us are more equal than others.

This Holy weekend and the Holy month to come bring to bear moments of reflection not least also because we are quarantined and have lost over 100,000 lives. They implore us to seek forgiveness, to serve the unfortunate, and to become better versions of ourselves including as a society as a whole.

(PHOTO CREDITS: Courtesy THE EAST AFRICAN)

The recent announcement by the US and Kenya that they will initiate negotiations for a free trade agreement (FTA) has elicited concern within the African trade community.

Although the process, road map and end date of these negotiations remain to be worked out, it suffices that we reflect on possible reasons for this initiative, its ramifications on Kenya’s role as a lead proponent of the African Continental Free Trade Area (AfCFTA) and its legitimacy in light of Kenya’s membership of East African Community’s Customs Union.

While scant detail has been shared, Kenya is presenting the initiative as a proactive action in anticipation of the end of African Growth and Opportunity Act (Agoa). This preferential American legislation under which 39 African countries export a range of products to the US duty free is facing its latest end date in 2025.

Agoa has helped US to become Kenya’s third largest export market after EU and Uganda, accounting for about $400 million — nearly 10 per cent of the country’s total exports.

The second argument has been that Washington has promised Nairobi a graduation to the Millennium Challenge Account (MCA). This is a grant facility created by former President George Bush to reward friendly developing countries which pursue open market and democratic governance reforms.

(PHOTO CREDITS: Courtesy THE STAR)

For a long time, the African mining sector was perceived to be an enclaved economy that extracted natural resources to the benefit of the global economy while offering little to advance social and economic development on the continent.

On the contrary, recent mining industry restructuring has fuelled fresh hopes that the sector carries the potential to drive industrialisation in Africa.

On the Global Day of Action that is marked in November yearly, the civil society clearly demonstrated why the extractives industry must be reclaimed from the hands of a few, wealthy and foreign multinational corporations to benefit the communities in Africa.

Speaking in one voice, the civil society successful organised and executed an online campaign themed ‘Campaigning on Tax Justice and Extractives; Our proposed calls and demands’.

(PHOTO CREDITS: Courtesy THE STAR)

Business has evolved tremendously over the last few decades.

Incorporation of technology has brought about increased efficiency, greater convenience, economic development and improved problem-solving. The value-added results have positively impacted operations.

The entrance of new and tech-oriented players has not only resulted in inclusion and disruption but also created an interesting ‘digital economy’ ecosystem. This unprecedented transformation should be good news for governments as they have the potential to grow their domestic resource mobilisation.

However, the revenue authorities have been caught flat-footed in regulation and have not been able to assess, collect and account for revenues from the modern global economy. The current international tax rules are not up-to-date with the technological advancement in the business industry and therefore, need to be re-assessed.