Sub-Saharan Africa loses 5.7 percent of GDP to illicit financial outflows – Africa Progress Panel. Sub-Saharan Africa lost an estimated 5.7 percent of its GDP over a ten-year period to illicit financial outflows, preventing millions of people in Africa from accessing better health and education, according to a new report by a US-based organization, Global Financial Integrity (GFI). These illicit outflows link to tax evasion, corruption, crime, and other unlawful activities, and they harmed the sub-Saharan region proportionally more than any other region in the period measured between 2002 and 2011, the report, Illicit Financial Flows from Developing Countries: 2002-2011, said. “At an average of 5.7 percent of GDP over the period studied, the loss of capital has an outsized impact on the continent,” the report said. Misinvoicing accounts for about 80 percent of the world’s illicit financial flows, the GFI report said, referring to the deliberate falsification of import and export declarations in order to evade tax.
Infographic Related articles. How to Save Africa from the Resource Curse. In October 2011, the U.S. Department of Justice filed a motion to seize a palatial cliff-top home in Malibu, California. The 16-acre property towers over its neighbors, with a palm-lined driveway leading to a plaster-and-tile mansion. Situated in the heart of one of the United States’ most expensive neighborhoods, the $30 million estate includes a swimming pool, a tennis court, and a four-hole golf course. In its complaint, the Justice Department also set its sights on high-performance speedboats worth $2 million, over two dozen cars (including a $2 million Maserati and eight Ferraris), and $3.2 million in Michael Jackson memorabilia -- in total, assets equaling approximately $71 million.
Home to over one billion barrels of oil reserves, Equatorial Guinea has exported as many as 400,000 barrels of oil a day since 1995, a bonanza that has made the country wealthier, in terms of GDP per capita, than France, Japan, and the United Kingdom. To continue reading, please log in. Register. Preparing for Africa's boom - Paul Collier. 'Never again" is, of course, a sentiment that is now widespread in economic policy circles.
I hear it too from Africa's economists, but then it refers to the resource curse. The global commodity boom that ended abruptly in September was the second since African independence. Africa has yet to diversify from dependence on primary commodity exports, so these booms were huge opportunities, pumping far more money into some governments than aid will ever do. Last year, Angola alone received from oil and diamonds more than double the entire aid inflows to Africa. The first commodity boom, in the 1970s, was in large part an opportunity missed. Indeed, far from being harnessed for sustained development, it sowed the seeds of decline. Having blown its first commodity boom, Africa had to wait 20 years for the second. Transforming assets beneath the ground into sustained prosperity for ordinary citizens requires integrity and astuteness.
The Diversification Challenge in Africa's Resource-Rich Economies. For a growing number of countries in Africa the current commodity boom is a huge opportunity. But if the economic history of resource-rich, poor countries—especially in Africa—is any guide, rather than bringing prosperity, the resource boom may drive them into what Paul Collier (2007) in his influential book The Bottom Billion terms the “Natural Resources Trap.” In Africa, countries dependent on oil, gas, and mining have tended to have weaker long-run growth, higher rates of poverty, and higher inequality than non mineral-dependent economies at similar levels of income.
Two recent studies suggest both the potential and the risks of resource extraction. Alekseev and Conrad (2008) show the potential—resource wealth has tended to make countries better off. They find that in the long run resource-rich countries have significantly higher levels of income than other countries. But geology is not destiny. Natural resource wealth can be an effective driver of growth. The Curse of African Resource Abundance – Continuance. #The Curse of African Resource Abundance Although much of the African continent possesses a myriad of natural resources, modest economic growth has come largely absent development. In fact, much of the African continent experiences conditions of abject poverty, and in some countries poverty has increased in recent decades. Africa is experiencing the effects of a “resource curse”, where resource extraction actually contributes to conditions of poverty and stagnated development. In part the result of a “Dutch disease”, growth inhibited by resource extraction is multifaceted, involving government failures, unfair or opaque contracts by firms, and missed opportunities for sustainable reinvestment.
Despite the challenges associated with contractual renegotiations and improving institutional competency, natural resource abundance in many African countries presents opportunities to pair economic growth with sustainable development. 1. 2. 3. 4. Written by Jon Milani. Oil in East Africa. Workers at the site of Ngamia well. Photo/ Nation Media Group Anniversaries make us reflect on our past. In this of all years, the temptation to look back on the highs and lows of nationhood is almost overwhelming. Like most people approaching their senior years, independent Kenya is marking its 50th birthday by attempting to cling to its youth. A Kenyatta is back in State House and an Odinga faces an uncertain future of political isolation.
A system of devolved government is fighting for its life. The government is underpinned by an alliance of Kikuyu and Kalenjin. But reliving the Swinging 60s threatens to let the songs of the youth drown out the noise of real changes taking place. A fundamental shift in the economic geography of the country is taking place. The economy of the country has been dominated by the belt of highlands stretching west from Nairobi.
As a result, those in the north have often felt politically and economically marginalised. Key aspects of the project include: Port. Avoiding the Resource Curse. This year, Texas-based Anadarko and Italian partner ENI are due to make the final investment decision on whether to construct one of the largest liquefied natural gas facilities in the world in Mozambique. The complex would allow them to tap into deep off-shore gas fields that could rival Australia and Qatar as the largest liquefied natural gas reserves in the world. The Anadarko and ENI complex may be the first of a stream of large oil and gas projects in East Africa and questions have been raised about whether these new developments can bring sustainable development to the region or inflict the “resource curse” that has plagued other African countries.
The conventional arrangements under which international oil and gas companies operate are not suited to the development of energy resources for use within developing countries. A Development Opportunity Politics and policies at national and local levels are changing, and there is hope that previous mistakes can be avoided A U.S. Will resource boom in Africa see end to poverty? - News - www.theeastafrican.co.ke. The $34 billion question: Can Africa turn the resource curse into a blessing? - Comment - www.theeastafrican.co.ke. Bono: How Natural Resources Can Save Africa. It's become the go-to cliché of modern economics. Natural resources are a "curse. " When a nation is over-reliant on one or two commodities like oil or precious minerals, corrupt government ministers and their dodgy associates hoard profits and taxes instead of properly allocating them to schools and hospitals.
Happy the country that lives on nothing but its wits; cursed be the one that thinks it can get rich by planting or digging or drilling for wealth. Such is the collective wisdom. So we must ask the collectively wise, How did the U.S. avoid the curse? And what might that tell us about other countries' chances of doing the same? When European settlers arrived in North America, they found a continent groaning with abundance--soil in which anything would grow, stands of timber marching to the horizon. The story, of course, wasn't always a happy one. This summer the world has a chance to work that miracle a second time--and without the worst parts of the American story. Africa Ready to Reverse its Resource Curse. Despite current setbacks in the global economy and Africa’s failure to take advantage of the last decade’s resources boom, experts believe agricultural, mining and energy resources can boost the continent’s economic growth in the next two years.
According to African Economic Outlook 2013, a report published every year by the African Development Bank, the OECD Development Centre, the Economic Commission for Africa (ECA) and the UN Development Programme (UNDP), the outlook for the continent remains promising. Select the reports you are interested in:NO-SPAM: Under no circumstances will we EVER rent, sell or give away your email The document highlights that “what has been holding back Africa is not the large share of its primary sector in itself, but the poor performance of this sector. " The continent did benefit a bit during the boom in resource prices of the last ten years, as the continent’s GDP grew by 64% between 2000 and 2011. Resource curse By. Africa could still benefit from resources boom - POLITICAL ECONOMY. Trade.
Corruption. Tax Dodging.