Illegal capital flight impeding local business sector growth

The consistent outflow of unlicensed resources, whether commodity based or fiscal, from the nation’s purse has been a major source of worry for stakeholders committed to fostering its economic growth.
This transient flow of finance is largely evident in critical areas such as health where research reveals that more than 3,000 Nigerians seeking medical intervention travel to nation’s such as India for cases ranging from the dire to mundane.
While the call for higher levels of accountability among staff of the civil service and political workforce – in a bid to check the flagrant display of corrupt practices as well as curtail the shipping of questionable wealth to off-shore holding accounts – appears to fall on deaf ears, the indirect impact reflected in the low level of industrialization, exorbitant cost of power and stringent economic policies is taking its toll on the survival of indigenous businesses.
As part of its effort to draw attention to and raise critical voices in support of alternate sources of revenue for development in Nigeria, ActionAid Nigeria organised a two-day high level meeting targeted at building in-country support for the Thabo Mbeki Panel Report on Illicit Financial Flows out of Africa.
This summit which is part of ActionAid’s Tax Power campaign held from the 11th to the 12 of December 2014 in Lagos.
Speaking at the event, Akioyamen Paul Osemudiamen, the manger for the research and technical unit at the Chartered Institute of Taxation of Nigeria said, “There is a great need to address the issues of dead capital and illicit financial outflows especially in Nigeria where our reserves are almost depleted. The method we have adopted in the past are not sustainable and finding a way to get the wealth to pay just as much tax as those at the grassroots.”
Corroborating this point of view, Tunde Aremu, the policy advocacy and campaign manager for ActionAid posited, “What we have going on in the country at the moment is a scenario where multinational companies and other foreign investors pay close to nothing in taxes due to the many incentives they are given and also because some of these companies have found a way to dodge full payment of their valued tax.
“While that is taking place, the average Nigerian who is struggling to make a living faces multiple taxation based on the current policies and is forced to pay before they can do business and this is an unbalanced situation. The report is important because it addresses these issues and provides solutions on how to stop the illegal outflow of finance from Nigeria and Africa as a whole,” he stated.
Studies have shown that Africa currently loses an annual average of $50 billion in Illicit Financial flows.
This sum exceeds the official development assistance to Africa, which was $46.1 billion in 2012.
Between 1970 and 2008, Africa lost over $854 billion in Illicit Financial Flow.
According to analysts, the recent crash in oil price and introduction of austerity measures has further raised the need for sustainable financial planning based on proper taxing and stoppage of illegal fund transfer out of the country.
The High Level Panel set up by the African Union is chaired by Thabo Mbeki, former President of South Africa.
Other members include Carlos Lopes, the under secretary general and executive secretary of UNECA (Guinea-Bissau); Zeinab Bashir el Baki, the former vice president of the Africa Development Bank (Sudan); Olusegun Apata, former ambassador and chairman of the Coca-cola Bottling Company (Nigeria) among others.

Rita Ohai