Africa Loses US$50 Billion Every Year

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Illegal, unregulated and unreported fishing has reached epidemic proportions in Africa’s coastal waters, the Africa Progress Panel (APP), chaired by former UN Secretary General Kofi Annan reports.  “And West Africa is conservatively estimated to lose US$1.3 billion annually” due to illicit activities in the fishing and logging sectors which are causing tremendous damage beyond the financial costs.  “This plunder destroys fishing communities who lose critical opportunities to fish, process and trade. Another US$17 billion is lost through illicit logging activities,” says APP.

“Natural resource plunder is organized theft disguised as commerce. Commercial trawlers that operate under flags of convenience, and unload in ports that do not record their catch, are unethical,” Mr. Annan said, adding that these criminal activities compound the problem of tax evasion and shell companies. The Africa Progress Report 2014 calls for a multilateral fisheries regime that applies sanctions to fishing vessels that do not register and report their catches. The report also calls on governments around to world to ratify the Port State Measures Agreement, a treaty that seeks to thwart the poachers in port from unloading their ill-gotten gains.

Mismanagement of natural resources by African governments have stifled growth and development and steered much needed economic empowerment out of reach of the true owners of those resources – the African people.  Corruption schemes by government functionaries in charge of resources threaten grounds for due diligence and regulation of concessionaires that have legal interest in Africa’s extractive industries.  Out of US$ 100 billion lost globally in illegal logging every year, Africa is losing approximately US$17 billion.  West Africa alone is expected to lose US$1.3 billion out of a global US$23 billion from illegal, unregulated and unreported fishing. 

In Liberia, an apparent go-slow in the mining sector and a recent pullout by Sesa Goa from Liberia’s controversial Western Cluster iron ore reserve, while BHP Billiton and China Union are yet to show progress toward productivity, stalling the flow of much needed projected revenue for the country.

APP insists that with greater resource revenue,  African governments have the opportunity to develop more effective taxation systems – and spend public money more fairly. For example, 3 per cent of regional GDP is currently allocated to energy subsidies that principally go to the middle class. That money should be diverted into social spending to give the poor a better chance of escaping the poverty trap.

As well as losing money through natural resource plunder and financial mismanagement, the APP report continues, Africans miss out on money from abroad, not only when aid donors fail to keep their promises but even when those in the African Diaspora send remittances home to their families. It is estimated that that the continent is losing US$1.85 billion a year because money transfer operators are imposing excessive charges on remittances.

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