"The reality is, Africa is being ripped off
big time," was the unusually blunt assessment by Donald Kaberuka,
president of the African Development Bank (AfDB), in an interview with Reuters on Sunday.
Kaberuka was addressing the perennial
question of foreign corporations extracting Africa's mineral resources at huge
profit for shareholders with scant reward for local populations.
Speaking a day after meeting British and African leaders in London before the G8
summit, Kaberuka told the news agency: "Africa wants to grow itself out of
poverty through trade and investment – part of doing so is to ensure there is transparency and sound
governance in the natural resources sector."
Africa loses an estimated $62.2bn
(£40bn) in illegal outflows and price manipulation every year, much of it
exported by multinationals. The Africa Progress Panel under former UN secretary
general Kofi Annan recently highlighted how the Democratic Republic of the Congo lost at least
$1.36bn in potential revenues between 2010 and 2012 due to
knock-down sales of mining assets to offshore companies.
The UK has pledged to put its
"own house in order" by pressing overseas tax havens into a
transparency deal and drawing up new disclosure rules for British companies. It
hopes that G8 partners will follow suit.
Kaberuka raised the issue at a meeting
on Saturday at London's Lancaster House attended by the presidents of Ghana,
Guinea, Senegal, Somalia and Tanzania, and the Nigerian finance minister, Ngozi Okonjo-Iweala, who made a
failed bid to lead the World Bank.
He told the gathering: "The international community must do
its part to ensure balanced contracts, minimise tax avoidance – let alone tax
evasions – and bring light and transparency in the natural resource sector,
[which is] at the moment often very opaque.
"It is only in this way that our
countries will be able to find the financial resources they need to fund
infrastructure, to fund the trade corridors, which are now very dependent on
donor funding."
Kaberuka, a Rwandan who has been president of the AfDB since 2005, praised
the cancellation of African debt at that year's G8 summit in Gleneagles for
removing barriers to the continent's economic growth, which the AfDB predicts
will reach 4.8% this year.
Sub-Saharan African GDP has multiplied
in 10 years, he noted, from about $600bn at the turn of the millennium to
$2.2tn last year. Adjusted for inflation, this is a doubling of economic size
in a decade.
But aid to Africa from the developed
world had been cut for the first time in 10 years. "It's important we
begin to use aid smartly," Kaberuka told Reuters.
He highlighted projects such as the
AfDB's planned infrastructure fund, designed to use donor funding along with
African savings as a base for debt issuance to finance regional infrastructure
projects.
At Saturday's Lancaster House meeting,
David Cameron praised the AfDB for its work on both investing in
infrastructure and slashing the red tape that hampers cross-border trade in
Africa.
"Let's back African countries in
achieving their goal of doubling intra-African trade by 2022," the British
prime minister said. "Let's back Africa in ending the crazy bureaucracy
that means a trucker taking goods from Cape Town to Kigali has to carry up to
1,000 documents.
"And let's back Africans on
infrastructure – where they have a point when they say it was largely designed
in another era and primarily focused on getting products out of the continent
rather than promoting trade within it."
Cameron added: "Let's get behind
president Kaberuka's work through the African Development Bank to secure the
private finance that can deliver the infrastructure that is so badly
needed."
In a recent speech in Pretoria,
Britain's high commissioner to South Africa, Dame Nicola Brewer, set out the country's "triple-T" agenda of trade,
transparency and tax.
"In our changing world, a G8
summit is an opportunity for some of the world's leading economies to
demonstrate that we are putting our own house in order," she said.
"That means supporting growth and
prosperity around the world by helping open and fair societies to thrive. It
means G8 nations adopting the rules which characterise a fair and open global
economy. That's an ambitious agenda which benefits everyone – in the developed
and developing worlds."
She added: "As the recent Africa
Progress Panel report made clear, it is unacceptable that foreign direct
investment and aid flows into Africa combined ($62.2bn) are worth less than the
losses flowing out of Africa through illicit finance and the manipulation of
international trade prices ($63.4bn). We need to ask how we in the G8 can come
together around fairer global rules which don't disadvantage developing
countries."
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