$50bn illicit fund: NLC tackles African leaders on inaction on illicit funds outflow

Nigeria Labour Congress (NLC) has expressed displeasure over the inordinate attitude of Nigeria and African Heads of States and Governments on the implementation of the recommendations in the Mbeki Panel Report on $50 billion illicit fund as well as recent Panama Papers leak.

Ayuba Wabba, NLC president, who lamented the depth of the financial haemorrhage, to which Africa is exposed, as asset theft, tax evasion schemes and activities go unchecked, however, called for deliberate action in tackling the challenges.

Wabba, who gave the charge via a statement titled ‘Time to act is now,’ delivered to commemorate the 2016 Public Service Day, frowned called on Federal Government to scale down, halt and reverse where possible, the decision to privatise public services.

The NLC chief, who warned, “aggressive privatisation should not be an excuse for failing to stem illicit financial flows (IFF) from Nigeria in particular and Africa in general,” called for caution the ongoing pursuit for revenue drive.

“Rather than commit the same zeal and attention to dealing with these criminalities and their perpetrators for which Congress will ever be ready to support the government, we are not amused that government has chosen to pursue tax policies such as increasing Value Added Tax, raise the pump price of petroleum products, devalue the Naira and other policies that will punish the poor and exacerbate the hardship and miseries of indigent households.

“We note with concern that 16 months after the African Union – Economic Commission for Africa (AU-ECA) report on Illicit Financial Flows (IFF) from Africa was adopted by the AU Heads of State in Addis Ababa, no action has been taken by the Africa Heads of State even when the report pointedly said $50 billion is lost to Africa annually through IFF activities.

“The report had noted that IFF activities in Nigeria, especially in the oil sector is ‘humongous and ravenous’. The need for action is underscored by the increasing poverty and social discontent in the land.

“Congress is concerned that little or no progress has been made with regard to the implementation of the recommendations in the Mbeki Panel Report. The recent Panama Papers leak further exposes the depth of the financial haemorrhage to which Africa is exposed as asset theft and tax evasion schemes and activities go unchecked.

“Congress is not in doubt that these lost revenues would boost and complement finances necessary for achieving the roll-out of social services that could considerably alter the quality of life of the citizenry,” Wabba urged.

In light of the foregoing, the NLC chieftain urged Nigeria and AU Head of State and Governments to demonstrate political will towards the implementation of cardinal thrusts of the report’s recommendations without further delay.

“African countries should seek and pursue effective cooperation with themselves and other developing countries, particularly in terms of tax policy, practices and information-sharing.

“African governments should strive to eliminate undermining and damaging tax competition with and amongst them. In essence, tax concession in relation to attracting Foreign Direct Investment should be critically rethought.

“African governments should seek cooperation with other developing countries to enforce multilateral adoption and implementation of measures to end financial and corporate secrecy jurisdictions which have contributed in major ways to the fledging of tax havens and thus loss of revenues to African governments. The revelations from the Panama Papers leak speak eloquently to this fact and the need to scale up preventive actions against secrecy tax jurisdictions.

“On the strength of new revelations in terms of how Multinational Corporations have undermined revenue prospects of Africans countries, particularly in the extractive industry, Africa should commence processes to re-negotiate existing mining and exploration contracts as well as take other anti-mineral revenue theft measures.

“African governments must commit to train and retrain personnel with the view to build, improve and deepen the skills, competences and knowledge needed for effective tax administration.

“Importantly, tax regimes that place heavy burden and responsibilities on the working poor should be readjusted progressively, whilst sanctions should be improved to rein in the rich and corporate entities that have continued to evade tax payment.

“Nigeria must stand up as a strong and resolute voice in this struggle to stop the bleeding of Africa, as well as work to use tax revenues to finance social services delivery and not to continue to privatize public services to the detriment and exclusion of the poor and needy,” Wabba noted.