Stop the Bleeding: Debts and Illicit financial flows, my perspective for Anglophone Africa Radio Presenters and Managers

 

 Week 1: Understanding Debt and IFFs and its impact specifically on Women and Girls 
Debt is simply money borrowed from another person’s, entity or country without intention to pay it back with interests either through bond or loan. Bonds are debt instruments issued by government to raise funds for projects. 
World Bank, 2022, stated the debt stock of least developed countries has rose to $8.7 trillion in 2020. However, for many countries the increase was in double digits. Which most of them their external debts exceed their Gross National Incomes (GNIs) and Gross Domestic Products (GDPs), Africa where investors are not interested in domestic bonds and being worsened by Covid19 pandemic. Multilateral financial institutions accounted 92 percent of debts flows to Sub-Saharan Africa with 10 percent from bilateral lenders. The external debts of Africa have risen from 23.4 percent to 43.5 percent in between 2012 and 2020 respectively, with high debts to GNI and exports ratios. 
The term “illicit financial flows” emerged in 1990s according to World Bank; this involves trans-border activities and concerned with capital flight that being transferred from developing countries to developed ones. The concerns raised from these activities were the negative effects on excessive foreign equity and loans to external debts servicing and available funds to invest domestically. 

The numerous challenges imposed by these phenomena were reported in the United Nations Conventions on the fight against the elements of Transnational Organized Crimes in 2000, which are motivated by illicit financial activities. Similarly, in 2015, UNCTAD reported on tax avoidance engagement of Multinational Enterprises (MNEs) and how policymakers can adopt measures to combat it, to reverse its negative repercussions on investment of developing countries. Also estimated annual revenue loss of $100billion to these countries through the tax avoidance of MNEs to the amount of $115billion of official development assistance received in 2012. Additionally, African Development Bank (AfDB) in 2015 estimated almost $148 billion of revenue loss to Africa each year due to corrupt trading activities. Investigations carried by some journalists revealed about 5000 Africa individuals from 41 countries have private offshore accounts which assets are amounted to almost $6.5 billion and from 20 to 30 percent enjoyed tax havens in advanced countries (Global Financial Integrity et al., 2017). Additional resolution 71/213 was adopted by UN Intergovernmental forum on Mining, Metals and Minerals to broaden the impacts of illicit financial flows on sustainable economic development, social cohesion, political stability and inclusion of both small- scale and 51 commercial artisanal mining operators without formal or legal accreditation to ensure compliance on sustainable development of the sectors (UN, 2017). These extended to offences emanate from illegal tariff, theft of intellectual property, shopping of tax treaty, import duty, revenue mobilization, manipulation of markets, tax evasion and illicit corporate businesses and also hidden business activities done under shady economic environments by International Classification of Crimes for Statistics. The cooperation between Africa Union and United Nations Economic Commission for Africa (UNECA) commissioned panel on illicit financial flows made up of Ministers from Ministry of Finance and Economic Planning Units with concerns on 2015 report issued by Mbeki on how multilateral organizations approach to illicit issues and the means in which illicit business activities are done in Africa such as illegal prices transfer and foreign exchange through exports, misprices of trade and misinvoicing of contracts and services and tax avoidance and evasion (UNECA, 2015). Similarly, International Monetary Fund (IMF) initiated fight against illicit financial flows with well-elaborated concerns to deal with tax avoidance to stabilize its monetary system to help Member States to prevent base erosion and profit shifting by Multinational Enterprises (MNEs) and other transnational organizations. The impacts of illicit financial flows were amplified during United Nations General Assembly and resolution was adopted to promote international cooperation to combat corruption, tax evasion and transnational organized crimes through proper practices that will contribute to economic development and social cohesion and sustainable development of developing countries (United Nations, 2019). Sources that brought out the beginning of illicit financial flows are associated to pillaging activities or illegal acquisitions in the midst of wars or colonial structures and cultural assets trafficking that deprived Africa from earning revenues in tourism (UNCTAD, 2020). 
From six to seven decades ago, these programmes and conventions were not able to cure the long pandemic of food insecurity, especially in the developing countries. Generally, developing countries lost US$8.7 trillion through these activities to advanced economies over a decade now. For Sub Sahara Africa, trade misinvoicing accounts to US$1 billion and contribute heavily to domestic revenue losses that are needed to implement SDGs (UNCTAD and GFI, 2020) especially SDG 2 target on eradication of hunger, food insecurity and forms of malnutrition. Even after2000 Millennium Development Goals (MDGs) and before 2015 Sustainable Development Goals (SDGs) inceptions, 2003 Maputo declarations which involved Africa governments’ endorsement of 10 percent allocation of their national budget to enhance agricultural development and food security has drastically failed. 
This mostly halt domestic and international investments and the finance needed to continue implementation of Sustainable Development Goals, as estimated by International Labour 10 Organization the gaps in financing social protection initiatives make up of $1.2 trillion annually against the UNCTAD estimated $4.3 trillion. Another aspect of the crises of illicit financial flows, increase in import bills for food and energy which compounded by exorbitant interest rates on borrowing and the shrunk of $315 billion on fiscal stability in developing countries. 
The complex effects of illicit financial flows challenges are enormous, the economic recessions that are being caused, turned to new security issues which including transnational criminal activities such as human, weapons and drug trafficking, terrorism, communal disputes, bribery and corruption, wars over natural resources, environmental problems, religious and political extremism or militia, money-laundering, cyber fraud, illegal fishing and mining, oil theft, piracy and fraudulent activities during or after electoral process. 
In a midst of these, women and children become the direct victims, when infrastructures are totally destroyed through violence, the socioeconomic and psychological consequences adversely affect these vulnerable groups and mostly foster sexual abuse of women and girls (Alaga, 2011). The electoral process is mostly manipulated by those in power or ethnic majority to favour their ambitions against minority to enable to engage more in illicit activities. 
Excerpt from my research “The Nature of Foreign Policy and Its Effects on Food Security in Africa”