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The Executive Director of Tax Justice Network Africa (TJNA), Chenai Mukumba, has highlighted the urgent need for reform in the global financial architecture to address the significant loss of revenue from the African continent due to illicit financial flows.
She said at a recent virtual press conference, that the ongoing discussions around reforming the global financial architecture are seen as a crucial step towards empowering African nations to reclaim their financial sovereignty and drive sustainable development across the continent.
She emphasised that the current system is failing to allow African countries to retain the revenue generated within their borders.
“Domestic resource mobilisation is critical for our development, yet we are unable to maintain much of the revenue we generate,” Mukumba stated.
The TJNA Executive Director pointed out that in the mid-2000s, Africa was losing approximately $50 billion annually to illicit financial flows, a figure that has alarmingly increased to nearly $90 billion today.
“This is a substantial loss that deprives us of resources necessary for key sectors such as education, infrastructure, and trade development,” she added.
Mukumba stressed the importance of African nations being included in global discussions regarding financial reforms. “We need to be at the table, participating in conversations about reforms in the global financial architecture. When resources leave our continent, they often find a home in other countries, exploiting loopholes in our system,” she explained.
She called for reform centred around democratising decision-making processes at the global level, noting that, “The rules are not in our favour, and we must work towards levelling the playing field. We are not asking for anything more than equality, which we currently lack.”
Mukumba also highlighted the skewed nature of the global tax system, which has hindered African countries from effectively taxing multinational corporations. “This denies us the right to enhance our domestic resource mobilisation,” she remarked.
Mukumba concluded by stressing the need of tightening oversight to close legal loopholes that facilitate capital flight and tax evasion by multinational firms operating in Africa. “By addressing these issues, we can ensure that governments have the revenue needed to support essential services such as clean water, electricity, education, and health,” she stated.
This article was originally published by The Sun on 6th August, 2024