Osagefo, Kwame Nkrumah, who led Ghana to Independence from Britain in 1960, found that being politically independent was one thing, but achieving economic independence was quite another. He coined the term ‘Neo-colonialism’ to describe how the West kept the ‘third world’ territories in a lowly status as exporters of raw materials, (such as Ghana’s cocoa); while the metropolitan countries kept their monopoly of producing and exporting all the manufactured goods. Naturally, this message didn’t go down too well in the capitals of the West, and, guess what? While on a state visit to communist China, Nkrumah was overthrown and a regime more favourable to the west took over his country.
Today the accountants of the transnational companies that rule the world look for every loophole to avoid paying taxes and to keep Africa poor. Accounting fiddles are responsible for the drain of $50 billion per annum from the continent. This equals the entire annual shortfall in African infrastructure investment. And, no, Zingcreed is not quoting “The Socialist Worker”, it is quoting the bankers’ own house journal “The Financial Times”.
Former South African president Thabo Mbeki said last September “We as Africans have an obligation to act on this to ensure that the rest of the world (the destination of these illicit funds)…will help stop this drain of resources which belong to the continent that needs them so badly.” The charity Action Aid revealed that the brewing giant SABMiller had paid less tax in Ghana than a stallholder selling its beers. Transfer pricing is an increasingly policed method of illicit financial flows. One arm of a multinational corporation transfers goods or services to another arm of the same company in a different country. It can manipulate the numbers to shift profits out of countries with normal tax rates into tax havens such as Switzerland, Luxemburg or assorted Caribbean islands. After auditing dozens of multinationals, Kenya’s tax authority demanded 25 billion Kenya shillings in tax it says was avoided mainly through abusive transfer pricing.
Tax justice campaigners in Britain need to step up their efforts, as this African problem has a global solution.
Financial Times 5 October 2015 The new Africa supplement p.3 “From slavers to accountants: looters in Africa” by Tom Burgis
Burgis, Tom “The looting machine: Warlords, tycoons, Smugglers and the systematic theft of Africa’s wealth”
Hearson, Martin: Action Aid report (2010)
Global Financial Integrity, (US think tank)
Related Zingcreed Posts:
Crimes of the bourgeoisie #9: Tax dodge loses Africa billions
Us versus them: the TTIP of the iceberg
Africa: the financial ins and outs
Tax dodging costs the third world billions