My Address Today to Peace and Security Council: Inequality, Illicit Financial Flows and Instability in Africa

PSC inq PSC Inequality 5

Addis Ababa, 16 December 2014

Your Excellency, Chair of the Peace and Security Council

On behalf of Oxfam International, I would like to thank your Council for inviting us to address your session on Inequality, Illicit Financial Flows and Instability in Africa.

The Progress that our continent has achieved over the last decade is under threat by the rapid rising of inequality. Money, but also Power, and Opportunities are concentrated in the hands of a few, and this has reached an extreme level.

The consequences are corrosive for everyone. Extreme inequality encourages corruption fuels crime and violent conflicts. It’s wasteful for talent, potential and undermine the foundations our societies.

Homicide rates are 4 times higher in countries with extreme economic inequality than in more equal nations. Today, in many of our countries, access to justice is on sale, legally or illegally insuring impunity for the powerful.  The results are evident. The frustrated poor, mostly young people have nothing to loose… The can only get into violence or are just vulnerable to all kind of temptations.

Your Excellency;

The other issue on your agenda today which are the Illicit Financial Flows, are money from transactions, illegally removed or transfer from our countries… Money that escape public knowledge.

50% of illicit financial flows result from profit shifting by multinationals and up to 70% of those are from Extractive Industries in Africa.

Illicit outflow from Africa drags over $ 50 billion out of the continent every year. This represents about 1 billion per week.

The Africa Progress Panel estimated that $38 billion leave Africa every year through trade mispricing only… companies undervalue the prices of imports and exports so they don’t have to pay the appropriate tax.

 The Following solutions can be considered both to tackle inequality and resolve the issue of IFF:

Transparency: is a great disinfectant. It will put pressure on governments to account for how they spend the money received.

We must enact policies that force mining companies to publish payments to governments.

Some African States have been having the Right moves to manage resource wealth responsibly. Ghana for example has the Petroleum Revenue Management Act… a good example of how targeted regulation can promote shared prosperity –

The African Mining Vision (AMV)…. adopted in 2009 by the AU is not known in our continent. We need a deliberate effort to promote it and encourage member states to implement it.  In a long term, we must make it a binding document for all African Countries.

Oxfam Liaison Office to the African Union has just set a program in Addis Ababa to support the effort of the AU Commission in the promotion of the AMV.

Extreme Inequality can be overcome… if we make Government to truly work for citizens.

  • Tax system: is one of the most important tools governments have to address inequality.
  • Clinics, classrooms and other public services free of charge can help to close the gap in life chances.

We must also close the international tax loopholes and fill the gap in tax governance.  – – – –

I thank you.

PSC Even it up dec 14

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