BUJUMBURA August 13rd (ABP) – The prevention of Africa’s financial hemorrhage requires the honest and sustained commitment of Western governments to refuse to be safe from the stolen wealth of the continent, according to Mr. Léonce Ndikumana, a prominent Burundian economist and university professor. He spoke of this in a presentation he made on “the odious debt and capital loss: Mechanism of the financial hemorrhage of Africa,” during a conference debate organized by the Bank of the Republic of Burundi, in Bujumbura on Friday August 9, 2019.
Mr. Ndikumana said the findings by experts suggest that Africa is a net creditor to the rest of the world, in the sense that the stock of capital loss hidden abroad exceeds the stock of external debt. The same results cast doubt on the view that Africa is the continent of heavily indebted nations. He said the loss of capital from Africa is a reincarnation of the looting of African resources by the colonial State.
Just as when European missionaries arrived in Africa and gave the Bible to the African, in exchange for the land, the African people witnessed a modern form of expropriation of resources resulting from the loss of capital. He added that multinational companies are colluding with politicians to share the cake of Africa. Also, in an area where the sector of multinationals is poorly regulated, through foreign investment, wealthy business enterprises exploit Africa’s resources wisely and repatriating profits, leaving behind an economic, social and physically devastated environment, he continued to say.
If stability and macroeconomic growth are desirable, Mr. Ndikumana said they will not deter capital loss. In fact, policies such as high interest rates and a rigid inflation target cannot necessarily provide short-term macroeconomic stability, without preventing capital loss. In turn, good governance and strong institutions that control corruption in the private and public sectors are of paramount importance in preventing the loss of capital from Africa. At the global level, the expert continues to say, particular emphasis should be placed on improving the transparency of the global trading and financial systems, in particular to break the tradition of banking secrecy and the establishment of strong mechanisms to quickly, transparently and accurately measure international trade to minimize fraud in billing and abusive transfer pricing.
Mr. Ndikumana also said that establishing a strategy against capital loss in Africa requires moving from the perspective of capital loss as an African problem to one that sees capital loss as a global problem. He further pointed out that if advanced countries or Africa’s major development partners really want to help the continent fight against capital loss, they must impose responsible and transparent practices on their banks. They can also support the antifouled capital program, helping to build the capacity of African governments to stop the plundering of natural resources by multinationals and to design and implement comprehensive anti-capital loss policies.
In that perspective, Professor Ndikumana says the international coalition against capital loss would therefore be an integral part of the overall strategy for cooperation and development assistance.
