Solutions: Debts and Illicit financial flows, my perspective for Anglophone Africa Radio Presenters and Managers

 

The illicit financial flows that serve as by-product of capitalism or free market concept have distributive or ripple and networking effects on other conditions that threaten the welfare gains of the continent of Africa.

Although, the concept has some advantages, as to encourage Multinational Enterprises or private sectors, national and international non-governmental organizations and International Intergovernmental Organizations that contribute largely to economic and financial growth, conflict prevention and many more which the traditional structures of States may not be able to achieve alone in the international arena.

The cost of illicit financial flows or the loss from capital flights and the subsequent overwhelming debts to GDP ratios have immense challenges to economic stability that enable governments to invest adequately in agricultural research and rural infrastructural development that will facilitate food production and food security and poverty reduction as being witnessed in the developed countries. 

International Policy Interventions for United Nations

Resolutions on financial accountability and transparency adopted by United Nations to deal with illicit financial flows at multilateral platforms which seek to build up the capacity of Africa countries can serve as cascading efforts to improve the fight against the phenomena when the United Nations Security Council, especially the permanent five members consider the issues as international security threats and mobilize available resources in that regards. 

 “Responsibility to protect” that brings down curtains of sovereignty of States and allow international interferences in domestic affairs of States concerning human rights abuse, wars and others should include bribery and corruption as threats to national and human security or as threats to international public goods that attract global concerns or external audits by non-state actors and States.

The Consultative Group on International Agricultural Research (CGIAR) needs to be resourced by both States and non-state actors to meet the intended purposes as international public goods. These resources should be provided by developed economies and Multinational Enterprises (MNEs) to empower developing countries to conduct research in agricultural production, climate change, food security and others to meet international standard requirements as part of climate funds.

 Regional Policy Interventions for developed countries

 The representatives of Africa countries should be included in matter of minimal tax threshold decision making by Organization of Economic Cooperation of Development or G20 members to prevent profits shifting by Multinational Enterprises (MNEs) due to the nature of economies of some members of G20 that serve as motivating mechanism to these entities that engage in illicit financial flows and partners from Africa who facilitate such activities with their foreign counterparts.

As the base erosion and profit shifting initiatives was designed to reduce the chances of Multinational Enterprises (MNEs) from shifting profits from developing countries to developed countries, with the aim to reduce competition and investment decline. This must accompany by investment in area of high comparative or competitive advantage to increase domestic revenues mobilization in Africa. 

 Policy gaps that left by both 35 developing and developed countries on tax, standards and carbon regulation need to be bilaterally or multilaterally enacted and enforced to bring control in the international trade and finance system.

 The success of the Protocol adopted by UNCTAD to minimize international corruption practice through provision of technical supports to Africa Union and Africa Continental Free Trade Area (AfCFTA) depend on advanced economies where tax havens and currency stabilization serve as incentives to illicit business transfer from developing countries. The system should be well-regulated to mend the cracks exploited by perpetrators of illicit financial flows.

 Comparably, European Union uses Rapid Alert System for Food and Feed (RASFF) to notify violations of food safety standards regulation on entering into EU system for urgent reaction by authorities, since 1979. This system can be applied by developed countries to control illicit financial flows that pass through their borders into their economies.

 National Policy Interventions for developing countries, especially Africa

 In era of e-commerce, profits shifting can be easy or easily tracked and charged by States through robust digital architecture, which developing economies need to adopt with complementary supports from United Nations and developed economies to avoid manipulations from Multinational Enterprises (MNEs) and to boost custom and migration services and national security apparatus to control transnational organizations and businesses.

 Exploring comparative or competitive advantage in local SMEs will attract foreign direct investment (FDI) and improve economic gains which needed to invest more in food security, research and development.

 Assessing the welfare gains from FDI, Multinational Enterprises, international trade and finance to tax holiday granted to MNEs and capital flights through their activities will help to apply the right remedies that will attract international investment portfolios and the long-term benefits to developing economies.

 The screening mechanism adopted as national security measures used by some developed countries to check and regulate MNEs activities need to replicate by developing economies to prevent any illicit work of Multinational Enterprises (MNEs) and Non-Government Organizations (NGOs).

 Africa countries need to revive national agricultural research systems (NARS) through investment in already existing frameworks like Comprehensive Agriculture Acceleration Development Programmes (CAADP) and West Africa Services Centre on Climate Change and Adaptive Land Use(WASCAL) and modern agricultural technologies with both technical and financial supports from private and development partners as complementary to Consultative Group on International Agricultural Research (CGIAR) that will improve integrated agricultural production, food security and safety, climate change and environment. These will also improve exports capacity of Africa countries to international markets by meeting phytosanitary and sanitary measures set by some countries.

 The 60 percent of youthful population of Africa out of 1.2billion people should be tapped into creation of food security and economic development especially in rural infrastructural and research development in agriculture and natural resources management to avoid rural to urban migration and cross-border migrations which contribute negatively to food security and national security.  Africa governments should also adopt regulations on birth control and reproductive health education through various public and private sectors to control unplanned population growth, as it happened in China.

 The leadership of Africa countries have to revisit the existing treaties on whether bilateral or multilateral agreements with regional and international actors or countries to amend the omitted clauses that created loopholes in tax conventions to stop illicit financial flows. Despite, the creation of 2009 African Tax Administration Forum (ATAF) to collaborate with other stakeholders on international forum on taxation, 2003 Extractive Industries Transparency Initiative(EITI) and also unit that oversees financial intelligence.

 Democratization of Africa needs review to represent true inheritance from medieval British source which acknowledges the total decoupling of economic and political powers by institutions of States. To bring clear roles of political actors’ engagement to create legislative ambience for economic power holders to strive but not to merge both powers. Giving voices to economic generators to contribute to government machinery in decision making and development agenda, as stated by Mitchel Knox, 1951 about Europe than partisanship and appointment of heads of public institutions made by partisan majority to control economic activities.

 Finally, Africa system should incorporate measurable degree or dynamism of both socialist and capitalist ideologies based on situations but must adopt the concept of socialist agenda employed by Gaddafi during his regime in Libya on essential services such as agricultural production, food security, health, education, general security and other sectors that drive urgency of basic needs.

Private sector actors must invest in research and development to develop products that transcend beyond their countries’ borders to sell and make money than engaging in their internal corruption with their governments to extort their citizens with the services that their countries are providing.

Excerpt from my research “The Nature of Foreign Policy and Its Effects on Food Security in Africa”