Africa loses $60bn annually

burning bills

Oliver Kazunga, Senior Business Reporter
AFRICA is losing an estimated $60 billion annually due to illicit financial outflows mainly of minerals and there is a need to implement strategic policies to curb the leakages, a United Nations (UN) senior official said yesterday.

UN Economic Commission for Africa advisor, Dr Vanessa Ushie, revealed this in an interview on the sidelines of the Zimbabwe Alternative Mining Indaba in Bulawayo.

She said the continent was failing to secure maximum benefits from its vast natural resources due to illicit financial outflows particularly in the mining sector.

“Africa is losing $60 billion annually from illicit financial outflows mainly originating in the mineral sector and this is due to revenue losses and leakages,” said Dr Ushie.

Zimbabwe has not been spared from the leakages with President Mugabe on record saying the country has lost billions of dollars of diamond revenue from Manicaland mining fields in the past few years. Against this background Government has moved to consolidate diamond mining activities in the country by setting up the Zimbabwe Consolidated Diamond Company.

Dr Ushie said the United Nations Economic Commission for Africa was encouraging countries on the continent to implement the policies and objectives of the Africa Mining Vision (AMV).

“AMV is a voluntary instrument and we are encouraging countries to implement it. AMV is a unique instrument and that is why advocacy, dialogue and awareness at national level is crucial so that people understand its benefits and buy into it,” she said.

Dr Ushie said governments can create laws, policies and mechanisms that would enhance the domestication of AMV at national level to minimise or curb the illicit financial outflows mainly in the mining sector.

“African countries have to be more strategic in the way they manage their resources especially minerals to promote sustainable development,” said Dr Ushie.

AMV was adopted by Heads of State at the African Union summit in February 2009 following the October 2008 meeting of African ministers responsible for mineral resources development.

The voluntary instrument is Africa’s own response to addressing the paradox of vast mineral wealth existing side by side with pervasive poverty.

“I think they are signs of progress towards addressing the challenges of illicit financial outflows and the fact that this type of space (Zimbabwe Alternative Mining Indaba) is in existence and we have seen 11 countries from Southern Africa now hold the alternative mining indaba, shows Africa’s commitment to managing its resources,” she said.

At regional level, AMV also seeks to ensure nations are able to negotiate contracts with mining multinationals that generate fair resource rents and stipulate local inputs for operations. Dr Ushie said in pursuing its objectives, AMV was being constrained among others by financial challenges as many economies on the continent were struggling following the collapse of commodity prices on the international market.

This, she said, has seen a number of African governments incurring revenue decline while increasing public debt as they borrowed to meet the gaps.

“Another challenge facing AMV is politics; people may see it as something external or externally driven. There is need for the political elites to form a consensus on the AMV in order to drive its implementation and this requires having a dialogue on how Zimbabwe and other African countries can manage their natural resources,” said Dr Ushie.

Pin It