Mkapa concerned over state of financing in Africa

04Aug 2018
The Guardian Reporter
The Guardian
Mkapa concerned over state of financing in Africa

FORMER Tanzanian President Benjamin Mkapa, has expressed concern over the state of financing in Africa, highlighting illicit financial flows as among obstacles to the continent’s economic transformation and development.

FORMER Tanzanian President Benjamin Mkapa.

Mkapa made the remarks earlier this week ahead of the African Leadership Forum which commenced in Kigali on Thursday. The forum is expected to bring together former heads of state from six African countries and top business leaders from across the continent.

He emphasised that African countries ought to be more strategic on how they finance their development agenda, saying things like illicit financial flows were limiting the pace of financing.

“This (illicit financial flows) is a subject which is important because, although there has been progress in the emergence of African businesses and billionaires, they are also associated with tremendous outflows of their earnings instead of reinvesting in their countries,” he said during a media briefing.

“But illicit flows are also about the operations of external investors in the exploitation of resources of African countries,” he added.

Mkapa also said that some external investors understate their returns and overestimate the costs of production of initial investments, putting African resources at a disadvantage.

The United Nations Economic Commission for Africa estimates that African countries lose more than $50 billion annually through illicit financial flows, which is approximately double the official development assistance (ODA) the continent receives.

This has raised concerns among leaders, given the scale and negative impact on Africa’s development and governance agenda.

Going forward, the former president said, domestic resource mobilisation will help African countries in their pursuit for financing their development.

Part of the discussions at the forum will focus on this particular element. Discussion will also revolve around how to enhance savings, taxation and budgeting, among others.

This year’s forum, under the theme, ‘Financing Africa’s Transformation for Sustainable Development,’ seeks to provide a platform to deliberate on the prospect of increased, improved, and effective financing for Africa’s transformation.

“This year we want to see what the constraints are and the means required to accelerate the process of economic development and better strengthen our people’s lives,” Mkapa noted.

Other former heads of state expected at the event include Joaquim Chissano of Mozambique, Olusegun Obasanjo of Nigeria, Armando Guebuza of Mozambique, Moncef Marzouki of Tunisia and Hassan Sheikh Mohamud of Somalia.

Last year, the forum was held in Johannesburg, Soth Africa, and focused on peace and security on the continent, and earlier this year in Dar es Salaam, Tanzania, focusing on the same issues.