The key task is to dismantle the system extracting
wealth from Africa. This requires action by African
civil society organisations to press for change in
their countries, and action bycivil society
organisations in the countries that are enabling
this wealth extraction to take place, such as the UK.
Global elites have no intrinsic interest in changing a
system that benefits them. It is critical for civil society
organisations to expose the role of multinational
corporations and Northern governments in
impoverishing Africa and to step up their work in
building coalitions to end tax dodging and other
unfair resource transfers out of Africa.
We highlight nine policies that are needed to help
reverse the resource flows (although this list is not
exhaustive):
Policy 1. Promote economic policies that genuinely
lead to equitable development.
Africa’s economy has been growing at 5% in
recent years but poverty remains deep and is
rising, showing how current models of economic
growtharenotgenerally benefitting the poor.
For decades, Western governments have been
encouraging or forcing African governments to
promote trade and investment liberalisation
and privatisation, as though opening up
economies is an end in itself. These policies have
mainly enriched foreign investors–but have
not tended to benefit Africa’s people. African
governmentsmustbe allowed and helped to
promotedevelopment models that: fairly create
and redistribute wealth, create jobs for citizens,
promote social welfare, ensure the progressive
taxing of the rich, and protect natural resources
and eco systems and the rights and livelihoods
of the communities who rely on them. Economic
policies that nurture domestic companies over
foreign investors are likely to have the greatest
development impacts. In East Asia, which has
spectacularly reduced levels of poverty in recent
decades, a key policy was state intervention to
nurture and develop domestic industries. This
often involved imposing protectionist trade
barriers to keep out foreign competitors, until the
point when those industries were strong enough
to compete in world markets.
Policy 2. Reconfigure ‘aid’ as reparations to – at
least–compensate for the wealth extracted from Africa.
An independent international process is needed
to specify the degree to which individual countries
are responsible for extracting wealth from Africa.
This process must include evaluations of all
the resource flows considered in this analysis,
including the costs associated with adapting to
and mitigating climate change. African academic
and civil society organisations could undertake
analyses of the movement of resources between
their countries and the rest of the world. Progress
should be made towards a true international aid
system that is not based on voluntary donations
but on reparations for damages caused.
Policy 3. Transform aid into a process that genuinely
benefits Africa.
Currently, much ‘aid’ from Western governments,
which we count here as ‘inflows’, actually
contributes more to outflows from Africa: aid
that pushes privatisation in key sectors (such as
public services), free trade or unfettered private
investment can simply open up economies even
further to exploitation by foreign companies.
If aid is to benefit Africa, it must be delinked
from Western corporate interests and be based
on African priorities negotiated through open
processes in country. To ensure this, there must be
much greater national and international scrutiny
over cooperation programmes.
Policy 4. Stop multinational companies with
subsidiaries in tax havens operating in Africa.
Governments in Northand South should stop
prevaricating on action to address tax havens. No
country should tolerate companies with subsidiaries
based in tax havens operating in their country. In
addition, Stock Exchanges, such as that in London,
should not permit companies to be listed unless
they can show that their structures do not use tax
havens and are fairly paying taxes in all locations.
Policy 5. Enable transparent and responsible lending.
Loans to governments can be a source of funds for
useful investments, but too often they are given
irresponsibly. Private lenders are encouraged to
act irresponsibly because when debt crises arise,
the IMF, World Bank and other institutions lend
more money, which enables the high interest
to private lenders to be paid, whilst the debt
keeps growing. Laws are needed to ensure all
loans to governments are transparent when they
are given, particularly in the US and UK under
whose laws over 90% of international loans to
governments are given. And a fair, independent
and transparent debt restructuring process should
be created within the UN to require lenders to
cancel debts when needed. Such a process was
supported by 136 countries at the UN in 2015, and
opposed by just six: the US, UK, Germany, Japan,
Canada and Israel.
Policy 6. African governments must stop putting
their faith in the extractives sector,or
where it does continue, ensure it paysa
fair share of tax.
The existence of the ‘resource curse’ is now widely
accepted: the paradox that, with a few exceptions,
countries with abundant mineral wealth, fossil
fuels and other non-renewable natural resources
experience poorer democracy, weaker economic
growth, and worse development outcomes than
countries with fewer natural resources. Even
the World Bank now notes that‘ as the share
of national wealth from extractives increases,
human development outcomes are worse’.
Some countries are beginning to recognize this
through legislation. African governments should
deprioritize extractives and focus on promoting
other forms of economic activity that foster
sustainable and inclusive growth. If and where
extractive sectors do continue, they must be
made to pay a fair share of tax and the costs of the
negative damage they cause.
Policy 7. Governments outside Africa must provide
compensation to Africa to cover the costs
of climate change as well as taking much
greater steps to end their fossil fuel addiction.
Current promised levels of funding to help Africa
adapt to and mitigate climate change are grossly
inadequate and amount to Africa continuing to pay
for the rest of the world’s environmental damage.
Richer industrialised and industrialising countries
must agree and deliver urgent binding cuts in their
emissions, in line with their historical contribution
to the problem of climate change and their present
day resources, as well as the long-promised
financial compensation to countries like those in
Africa that have done little to cause the problem.
Policy 8. African governments should insist on
companies promoting extensive ‘local content’ policies.
If African countries are to benefit from foreign
investment and retain the potential benefits
of these operations in country, they need to
insist that companies employ and train a large
percentage of their staff from the country
and buy a large proportion of the goods and
services locally.This requires legislation, and
implementation of that legislation, to ensure
company conformity with laws, not a reliance on
voluntary promises by companies.
Policy 9. Sections of the media and NGO community
need to stop falsely claiming that Western
countries, including the UK, are playing
generally positive or ‘leadership’ roles in
international development.
Instead, they must expose the reality of Western
countries’ financial relations with Africa and focus
advocacy efforts away from aid, towards addressing
the root causes of poverty and inequality.
wealth from Africa. This requires action by African
civil society organisations to press for change in
their countries, and action bycivil society
organisations in the countries that are enabling
this wealth extraction to take place, such as the UK.
Global elites have no intrinsic interest in changing a
system that benefits them. It is critical for civil society
organisations to expose the role of multinational
corporations and Northern governments in
impoverishing Africa and to step up their work in
building coalitions to end tax dodging and other
unfair resource transfers out of Africa.
We highlight nine policies that are needed to help
reverse the resource flows (although this list is not
exhaustive):
Policy 1. Promote economic policies that genuinely
lead to equitable development.
Africa’s economy has been growing at 5% in
recent years but poverty remains deep and is
rising, showing how current models of economic
growtharenotgenerally benefitting the poor.
For decades, Western governments have been
encouraging or forcing African governments to
promote trade and investment liberalisation
and privatisation, as though opening up
economies is an end in itself. These policies have
mainly enriched foreign investors–but have
not tended to benefit Africa’s people. African
governmentsmustbe allowed and helped to
promotedevelopment models that: fairly create
and redistribute wealth, create jobs for citizens,
promote social welfare, ensure the progressive
taxing of the rich, and protect natural resources
and eco systems and the rights and livelihoods
of the communities who rely on them. Economic
policies that nurture domestic companies over
foreign investors are likely to have the greatest
development impacts. In East Asia, which has
spectacularly reduced levels of poverty in recent
decades, a key policy was state intervention to
nurture and develop domestic industries. This
often involved imposing protectionist trade
barriers to keep out foreign competitors, until the
point when those industries were strong enough
to compete in world markets.
Policy 2. Reconfigure ‘aid’ as reparations to – at
least–compensate for the wealth extracted from Africa.
An independent international process is needed
to specify the degree to which individual countries
are responsible for extracting wealth from Africa.
This process must include evaluations of all
the resource flows considered in this analysis,
including the costs associated with adapting to
and mitigating climate change. African academic
and civil society organisations could undertake
analyses of the movement of resources between
their countries and the rest of the world. Progress
should be made towards a true international aid
system that is not based on voluntary donations
but on reparations for damages caused.
Policy 3. Transform aid into a process that genuinely
benefits Africa.
Currently, much ‘aid’ from Western governments,
which we count here as ‘inflows’, actually
contributes more to outflows from Africa: aid
that pushes privatisation in key sectors (such as
public services), free trade or unfettered private
investment can simply open up economies even
further to exploitation by foreign companies.
If aid is to benefit Africa, it must be delinked
from Western corporate interests and be based
on African priorities negotiated through open
processes in country. To ensure this, there must be
much greater national and international scrutiny
over cooperation programmes.
Policy 4. Stop multinational companies with
subsidiaries in tax havens operating in Africa.
Governments in Northand South should stop
prevaricating on action to address tax havens. No
country should tolerate companies with subsidiaries
based in tax havens operating in their country. In
addition, Stock Exchanges, such as that in London,
should not permit companies to be listed unless
they can show that their structures do not use tax
havens and are fairly paying taxes in all locations.
Policy 5. Enable transparent and responsible lending.
Loans to governments can be a source of funds for
useful investments, but too often they are given
irresponsibly. Private lenders are encouraged to
act irresponsibly because when debt crises arise,
the IMF, World Bank and other institutions lend
more money, which enables the high interest
to private lenders to be paid, whilst the debt
keeps growing. Laws are needed to ensure all
loans to governments are transparent when they
are given, particularly in the US and UK under
whose laws over 90% of international loans to
governments are given. And a fair, independent
and transparent debt restructuring process should
be created within the UN to require lenders to
cancel debts when needed. Such a process was
supported by 136 countries at the UN in 2015, and
opposed by just six: the US, UK, Germany, Japan,
Canada and Israel.
Policy 6. African governments must stop putting
their faith in the extractives sector,or
where it does continue, ensure it paysa
fair share of tax.
The existence of the ‘resource curse’ is now widely
accepted: the paradox that, with a few exceptions,
countries with abundant mineral wealth, fossil
fuels and other non-renewable natural resources
experience poorer democracy, weaker economic
growth, and worse development outcomes than
countries with fewer natural resources. Even
the World Bank now notes that‘ as the share
of national wealth from extractives increases,
human development outcomes are worse’.
Some countries are beginning to recognize this
through legislation. African governments should
deprioritize extractives and focus on promoting
other forms of economic activity that foster
sustainable and inclusive growth. If and where
extractive sectors do continue, they must be
made to pay a fair share of tax and the costs of the
negative damage they cause.
Policy 7. Governments outside Africa must provide
compensation to Africa to cover the costs
of climate change as well as taking much
greater steps to end their fossil fuel addiction.
Current promised levels of funding to help Africa
adapt to and mitigate climate change are grossly
inadequate and amount to Africa continuing to pay
for the rest of the world’s environmental damage.
Richer industrialised and industrialising countries
must agree and deliver urgent binding cuts in their
emissions, in line with their historical contribution
to the problem of climate change and their present
day resources, as well as the long-promised
financial compensation to countries like those in
Africa that have done little to cause the problem.
Policy 8. African governments should insist on
companies promoting extensive ‘local content’ policies.
If African countries are to benefit from foreign
investment and retain the potential benefits
of these operations in country, they need to
insist that companies employ and train a large
percentage of their staff from the country
and buy a large proportion of the goods and
services locally.This requires legislation, and
implementation of that legislation, to ensure
company conformity with laws, not a reliance on
voluntary promises by companies.
Policy 9. Sections of the media and NGO community
need to stop falsely claiming that Western
countries, including the UK, are playing
generally positive or ‘leadership’ roles in
international development.
Instead, they must expose the reality of Western
countries’ financial relations with Africa and focus
advocacy efforts away from aid, towards addressing
the root causes of poverty and inequality.
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