REVEALED: N6.87trn Stolen From Nigeria Yearly - AU Report

PrynceAdore
Administrator
Posts: 2417



Nigeria, the world's seventh largest producer of hydrocarbon, accounts for about 68.1 per cent of the total revenue Africa is losing annually as a result of illegal transfer of revenues abroad.

The report of the Thabo Mbeki High Level Panel on Illicit Financial Flows from Africa adopted on Sunday by African Union Heads of State and Government at their summit in Addis Ababa, Ethiopia said about $40.9 billion (about N6.87 trillion) of an estimated $60 billion (about N10.08 trillion) lost through such transfers from Africa are traced to Nigeria.

The funds are stolen through corruption, tax evasion and illegal transfer of profits by multinationals, the AU said.

Nigeria, which produces an average of 2.3 million barrels of oil daily as the leading hydrocarbon producer in Africa, is being ravaged by poverty and underdevelopment.

The report also identified Egypt and Morocco as the other countries with the largest estimates of illicit financial flows statistics of $28.2 billion and $20.3 billion respectively.

Nigeria, Egypt top list

Cumulatively, Nigeria and Egypt topped the list of 10 African countries by illicit financial transfers between 1970 and 2008, with $217.7 billion (about N36.57trillion), or 30.5 per cent, and $105.2 billion (about N17.67trillion), or 14.7 per cent respectively, while South Africa had $81.8billion (about N13.74 trillion), or 11.4 per cent.

Concerned by the high losses through these illegal transfers, which was identified in 2011 as one of the threats to the inability of most resource-rich countries in Africa to meet their millennium development goals, MDGs, the AU at its 4th Joint African Union Commission/United Nations Economic Commission for Africa, AUC/ECA, Conference of African Ministers of Finance, Planning and Economic Development constituted the Mbeki Panel to review the underlying issues stalling Africa's accelerated and sustained development objective.

Recommendations

At the presentation of the report on Saturday, the panel gave a set of recommendations that would guide African leaders in checking the growing threats of the menace to the continent's economy, including the activities of extremist groups, instability, and poverty.

Part of the recommendations included a system that would allow automatic exchange of tax information among African countries and globally to check illegal profits shifting by multinational corporations to subsidiaries in tax haven or secrecy jurisdictions.

In its 15-point findings, the panel noted that ending illicit financial flows is a political decision by the various governments as it involved issues of abusive transfer pricing, trade mis-invoicing, tax evasion, aggressive tax avoidance, double taxation, tax incentives, unfair contracts, financial secrecy, money laundering, smuggling, trafficking and abuse of entrusted power.

The interrelationships of these issues, it stated, conferred a technical character requiring transparency across all aspects to ensure access to information and the right to obtain such information.

Illegal profits shifting by multinationals

The panel, which noted illegal profits shifting by multinational corporations as one of the biggest single source of illicit outflows in the continent, advised countries to ensure that the automatic exchange of tax information be subject to national capacity, to maintain the confidentiality of price-sensitive business information.

The dependence on natural resource extraction, it noted, makes African countries vulnerable to illicit financial flows, pointing out that there was need to pay attention to activities in the sector in an effort to check illicit financial flows in Africa.

"African countries need to acquire the capacities and technology to monitor extraction of their natural resources better and to negotiate contracts more effectively," the report said.

According to the report, tax incentives were not usually guided by cost-benefit analyses, as such African countries grant a host of tax incentives, such as tax holidays, investment allowances, tax rate reductions and administrative discretion in order to attract foreign direct investment, FDI.

Considering the effort needed in asset recovery and repatriation, the report said regulations and mechanisms were needed to ensure that financial establishments and banks identified and refuse to accept illicit financial flows, rather than relying on self-regulation by banks.

http://www.vanguardngr.com/2015/02/n6-87trn-stolen-nigeria-yearly-au-report/

Wat am i to say?