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STOP THE BLEEDING – AFRICA IFF CAMPAIGN DECLARATION AND CALL TO ACTION

  1. The Problem

Illicit Financial Flows are generally defined as “money that is illegally earned, transferred or used”. This definition was adopted by the AU/ECA High Level Panel on Illicit Financial Flows (the High Level Panel). Based on the definition, estimates are that Africa each year loses as much as $60 billion dollars through IFFs deriving mostly from three components – commercial activities, criminal activities and corruption with commercial activities by far accounting for the largest part.

The main mechanism of illicit financial flows related to commercial activity has been identified as trade mis-invoicing. This is the rampant practice of misrepresenting the price, quantity and or quality of imports or exports in order to hide or accumulate money in other jurisdictions. This way, companies, especially multinationals evade and avoid taxes, dodge customs duties, transfer kickbacks and launder money. To date, Africa has lost trillions of dollars that could have been invested in the continent’s development.

  1. Preamble

We note the findings and recommendations of the High Level Panel and embrace the Mbeki-led HLP process as an important response and a crucial opportunity to establish continental unity and assert African leadership and perspectives in framing and responding to the challenge of illicit financial flows from Africa.

We see the step by African leaders to adopt the HLP report and issue a Heads of State Declaration as movement in the right direction.

We now call for accelerated action to put in place policy measures at national, continental and global levels to effectively stop illicit financial flows from Africa and recover the billions illicitly siphoned out of the continent over the years.

Our call for urgent action on this matter seeks to make a number of points that we believe are important in defining a platform for African unity and global solidarity in responding to illicit financial flows.

  1. Our Perspective

First, we believe that the notion of illegality, while an important entry point, does not fully capture the full spectrum of illicit financial flows from Africa. Many of the mechanisms that corporations and individuals are using to illicitly siphon wealth from the continent are perfectly legal yet illegitimate and unjust. This includes aggressive tax avoidance measures employed by corporations and individuals that resort to crafty accounting practices. In addition, perfectly “legal” yet unsound policies by the actions of our own governments, for instance, uneconomical tax breaks and unfair contracts, especially relating to natural resource extraction, are major culprits in facilitating illicit flows from the continent.

We, therefore, assert that responses to illicit financial flows from Africa should look beyond the illegal to include all the unjust systems and structures that undermine domestic resource mobilization and drain resources from Africa.

In essence, we view the phenomenon of Illicit Financial Flows as an expression of the multiple ways in which wealth and resources that are produced in Africa, and should be reinvested there for Africa’s human and economic development, are unconscionably drained and exported out of the continent. At the root of this IFF phenomenon in Africa are historical and new forms in which the stranglehold of Global Capital and Trans National Companies on Africa’s economic production, trade, finance, and their control over the ownership and distribution of the overall economic surplus is being extended and deepened in the first decades of the 21st Century.

This stranglehold is the outcome of the intensification of three interlinked processes impacting Africa: the imposition of neo-liberal reforms, especially whole-scale privatisation and the liberalisation of Trade, Investment and Finance; the resulting deindustrialisation, rollback of economic diversification and a renewed emphasis on primary commodity production and export; accelerated expansion of TNC control over the spaces vacated or opened up by privatisation and economic fragmentation in Africa.

  1. Our Value Proposition

We believe that:

  • Stopping illicit financial flows from Africa is crucial to Africa’s social, economic and political progress.

We, therefore, raise our voices to ask national, continental and international institutions to:

  • Take concrete action to stop IFFs;
  • Maximize the mobilization, use and benefits of Africa resources for the good of the continent.
  • Join our clarion call to reinforce the agenda for Africa’s renaissance and transformation through our many efforts to achieve decent livelihoods, economic justice, good governance, and structural economic transformation.

In light of the above:

We, representatives of African trade unions, non-governmental organisations, farmers, faith-based groups, networks, women, youth and all concerned citizens:

  • Alarmed by the growing crisis of Illicit Financial Flows (IFFs) from Africa;
  • Acknowledging that Illicit Financial Flows (IFFs) from Africa increase poverty and inequality across the continent, and thereby undermine the chances of inclusive development;
  • Recognising the threats posed to the peoples, societies and economies of Africa by IFFs;
  • Cognizant also of the urgent need to scale up appropriate responses to stop the haemorrhage;
  • Having resolved to share our strategies to confront this crisis and its root causes;
  • United by our shared vision of a prosperous and equitable Africa;

Submit this Declaration and Call to Action, as follows:

  1. Our Demands

    5.1. Transparency:

We demand:

  • All relevant national and international actors to implement the recommendations of the Mbeki HLP report unequivocally as a starting point of any sincere initiative to address IFF in Africa, including the immediate and full repatriation of Illicit Financial Flows back into the public ownership of the source countries in Africa.
  • Full disclosure for all cross-border financial, capital and trade transactions and transfers in the Natural Resource Sector, including transfers of technology and skills to the host country.
  • Full disclosure and re-opening of all existing contracts in the Natural Resource sectors, as part of the new phase of reconstructing national mining visions under the rubric of the Africa Mining Vision.

5.2. Financial Reforms and Capital Repatriation:

We demand:

  • Support for and implementation of Capital Controls, the necessity of which the IMF recognised at the height of the Global Financial Crisis and which is also now recognised in the Financing For Development discussions, a key means of implementation of the Sustainable Development Goals.
  • Provision for Capital Controls to be allowed as part of the toolkit of national policy space to address Trade and Financial volatility, and for the regulation of investment to stem speculation while ensuring the accumulation and strategic deployment of Productive Capital in Africa.
  • The immediate adoption and transparent implementation of Capital Repatriation schemes and measures to return IFF to African public ownership.

5.3. Taxation:

We demand:

  • African governments and the international community to support and make available resources necessary for the establishment and operation of a new intergovernmental body on international cooperation in tax matters.

5.4. International Trade & Investment:

We condemn:

  • The threat posed to Africa by the liberalisation of International Trade, Investment and Finance through the imposition of lock in mechanisms of rules, agreements and treaties.

We reject:

  • The unfair Economic Partnership Agreements being imposed on Africa and the attempt to extend them into areas of Services, Intellectual property and Investment – precisely the areas of “intangibles and innovation” that the Mbeki Report warns as pernicious emerging threats and new sources of IFF from Africa.

We commit:

  • To mobilise Africa to resist the alarming trends that the dominant powers are seeking to permanently institutionalise in the WTO including provisions that undermine local content development and the industrialization of African economies.

5.5. Social Investment and Development:

We demand:

  • Full disclosure of all PPPs and all infrastructure projects, especially in the essential social sectors such as health, water, sanitation, public transport, electricity and education.
  • The systematic and planned implementation of developing local Production Capabilities that can construct such infrastructure.
  • Foreign Private Finance to be completely excluded from basic social sectors.
  • Social sectors to not only provide baseline public services, but also promote and develop Local Content Linkages and be oriented towards Structural Transformation of the entire economy with the aim of transforming the position of Women in society and in the economy.
  1. Our Call to Action

In the pursuit of vigorous efforts for the realization of these demands,

We call on:

  • Other organizations and citizens groups across Africa to join us in this effort.

We, especially, ask for:

  • Solidarity and Synergies from existing campaigns and activism to ensure Africa’s development and social justice. These include campaigns on the transformation of Natural Resources and Extractive Regimes, Debt & Finance for Development, SDGs, Transparency and Accountability, Women’s Empowerment and Equality, Full Employment and Decent Jobs, Youth Movements, Environment and Human Rights.

We also call for:

  • African leadership of the IFF discourse at the level of inter-governmental decision making globally and within Africa, as a key necessity to counter-balance the marginalization of African voices and guarantee sovereignty and recommend, to this end, that the Mbeki HLP report must be the key reference point.

We echo:

  • The conclusion by the Mbeki HLP report that stopping illicit financial flows from Africa is ultimately a political question.

Anchored in a deep conviction that it is people power that forces political will,

We, therefore, call for:

  • A massive demonstration of people’s support for the stop the bleeding campaign to end illicit financial flows from Africa.
  • All people of good conscience across the continent and globally to join the movement and express support in the following specific ways:

>> ADD YOUR VOICE (Individuals) to the campaign:

We invite individual citizens to:

  • Add their voices to calls for national, regional and global institutions to put in place policies to stop illicit financial flows from Africa.
  • Indicate your support by signing the Stop the Bleeding Campaign Declaration and Call to Action.
  • Contribute to mobilize ONE MILLION VOICES globally to demonstrate mass support for this agenda and build the people power necessary to drive policy change at national, continental and global levels.
  • Sign up at the campaign website stopthebleedingafrica.org, or send an email to isupport@stopthebleedingafrica.org, or through physical forms provided by local organizers.

>> GIVE YOUR ENDORSEMENT (Organizations):

We are inviting organizations, including those working on different but related campaigns, to:

  • Officially endorse the Stop the Bleeding Campaign Declaration and Call to Action. You can send your endorsements to isupport@stopthebleedingafrica.org or by signing the endorsement form online or through local campaign organizers.

>> RAISE AWARENESS:

We invite:

  • Individuals and organizations to undertake awareness raising activities at local levels, nationally, across the continent and globally and to mobilize others to join the movement and support the stop the bleeding campaign.
  1. Our Commitment

As civil society organisations we commit ourselves to developing a comprehensive agenda of further work, policy input, popular engagement and advocacy to deepen these demands and ensure their realisation at all levels including the continental, regional and national levels within Africa. We also commit to work at continental, regional and national levels to ensure linkages, synergies and coherence between responses to IFF and the strategic progressive policy initiatives that have the best potential to spur democratic developmental transformation in Africa.

 

 


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