Africa Losing $1 Billion A Week From Illicit Financial Flows: Report
"We now need the US and EU to quickly implement their own extractive industries transparency laws, and for Canada to get its law in place," said Oxfam Chief Executive Mark Goldring. "Mining giants Australia and South Africa have an important opportunity to lead G20 nations by example on this issue too."
"But transparency is only effective when twinned with accountability. Companies and governments equally need to be held to account for managing Africa's mineral riches for the benefit of African people. Foreign companies can't be expected to fix weak governance - but they can exploit it, and many continue to do exactly that," he concluded.
Economy Watch
Sub-Saharan Africa has lost $1 billion a week for the past 30 years due to illicit financial flows related to their natural resources, according to international relief and development organization Oxfam America, urging governments and businesses to work together in introducing sweeping measures to improve transparency and governance in the region.
Speaking at a special public meeting with political, business and civil society leaders at Oxford University on Wednesday, Oxfam's executive director Winnie Byanyima called for a global solution to the crisis, not solely an African one.
"The resource curse has never been so stark and, with new mineral discoveries happening every day in Africa, it has never been so vital to tackle," said Byanyima.
"These huge new finds could mean tens of billions of dollars of taxes to pay for schools and hospitals - but only if this new wealth remains in Africa. Too often it has ended up in Zurich not Zambia, London not Liberia," he added.
Byanyima highlighted a report by the African Development Bank, which found that up to $1.4 trillion was lost from 1980-2009 to illicit financial flows. Fuel-exporting African countries were the worst hit, losing $732.8 billion in that period, with Nigeria, Egypt and South Africa among the largest affected.
Oxfam's concern is that with new mineral discoveries worth up to $11 billion - in iron, oil, gas, gold and coal - found in Guinea, Ghana, Liberia, Tanzania and Mozambique alone, there is the potential for a renewed surge in illicit flows from Africa.
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"The importance of natural resources to the African continent is growing by the year. Following recent finds of oil and gas across East and West Africa, an issue that was previously only relevant to a small number of countries is now at the top of the political agenda for many more," said the Director of the African Studies Center at Oxford University, Dr Nic Cheeseman.
"How well African countries manage their natural resources over the next decade is the single most important factor that will determine whether or not the continent manages to sustain its fragile economic recovery.
"We must redouble our efforts to understand how African countries can best manage their extractive industries. But these efforts should not just focus on what African governments can do. Multinational companies and international governments have often pursued self-interested policies to the detriment of African people," he said.
"Ensuring that the proceeds from oil and gas work for the people of Africa requires a new approach both inside and outside of Africa".
The challenge, however, remains huge. According to the latest CIVICUS survey, many newly-resource rich African countries still remain rooted near the bottom of global governance rankings.
And according to a study by the Chr. Michelsen Institute, for each extra U.S. dollar in oil exports leaving Africa, about 11-26 cents also leaves the continent in illicit capital flight.
Oxfam believes the commitment made earlier this year by the G8 to "raise global standards for extractives transparency and make progress towards common global reporting standards" and its endorsement of the Extractive Industries Transparency Initiative was a good first step.