Global Financial Integrity (GFI) has published an analysis arguing that Africa is a net creditor to the rest of the world because it has not captured rightfully earned taxes and royalties from its exports.
This contradicts traditional thinking that argues that the west pours money into Africa through foreign aid and other private-sector flows, without receiving much in return.
Analysis by the non-governmental organisation (NGO) focused on illicit financial flows (IFFs) cites several recent research studies to support its argument.
GFI cites in its analysis a 2018 report by the University of Massachusetts’ Political Economy Research Institute (PERI).
The report, Capital Flight From Africa: Updated Methodology and New Estimates,
finds that 30 African countries between 1970-2015 lost a combined US$1.4 trillion through capital flight.
Including interest earnings on capital flight, this brings the cumulative amount to US$1.8 trillion. This amount vastly exceeds the stock of debt owed by these countries as of 2015 ($496.9 billion), which PERI says makes the group a “net creditor” to the rest of the world.
The analysis by GFI also cites a report it produced jointly with the African Development Bank in May 2013 that found that illicit financial outflows from Africa between 1980 and 2009 totalled between US$1.22-1.35 trillion.
GFI’s analysis, Out of Africa: Capital Flight, can be found here.
Categories: Trade Based Financial crimes News