AFRICA - Every year, Africa loses 200-400 billion dollars in capital flight

Monday, 10 May 2010

Dar es Salaam (Agenzia Fides) – The African continent loses between US$200 billion and US$400 billion annually in capital flight by firms (mainly foreign). This fact has emerged from the 20th World Economic Forum on Africa, which ended May 7, in the Tanzanian capital of Dar es Salaam.
South African Finance Minister Pravin Gordhan said that the continent remains the most competitive in terms of returns on investment, but cautioned on capital flows. Mr. Gordhan dismissed some international investors who describe Africa as a risky place to do business as people who were out of touch with the reality. He also expressed concern over businesses that made super profit, but refused to execute statutory obligation of paying taxes to governments. In this manner, the African people hardly benefit from the wealth produced in their countries.
"Businesses have the responsibility to pay taxes to pay fair taxes," noted Mr. Gordhan.
Some representatives of multinationals operating in Africa have also criticized local governments for the lack of a clear tax rules, which they say discourages many traders from investing in the continent.
African Ministers have, however, indicated that the corporations themselves are often opposed to fiscal rules, especially in mining and in the mobile telephone business, two areas showing the highest profits in the last decade. (L.M.) (Agenzia Fides 05/10/2010)