RAGE ON MULTINATIONAL COMPANIES FOR CAUSING AFRICA TO LOSE TRILLIONS OF DOLLARS

Civil societies across Africa have sparked outcry on Multinational Corporations (MNCs) saying that they are the reason for Africa’s deteriorating economy.

Speaking in Nairobi, Executive Director for Trust Africa Tendai Murisa says that there is need for policy makers to create laws that will prevent MNCs from depleting Africa’s resources. 

‘These investors do not do any value addition on the products hence they will fetch a lower price. This is a problem in Africa whereby we export the raw commodities be it mineral or agricultural products whose price we do not determine. In the Zimbabwean case their platinum is refined in South Africa whereby tax is determined after export. All these are leakages in the economy that need to be corrected. Kenya is going to mining now and they will face the risks these other countries have faced.’ says Tendai from Zimbabwe.

He blames the economic structure of African nations for these challenges.

‘There is minimal participation of locals in the Agriculture and Mining industries of this continent. Most of it is controlled by Multinational Corporations,’ he adds.

‘There is a new situation in Kenya whereby mining contracts are regarded a State secret. Our own political elite also have selfish interests in such situations’, says Joel Akhator Co-ordinator for Human and Trade Rights based in Togo.

The civil societies have also called for tax holidays to be removed since the host countries do not get full benefits from this policy.

‘Foreign Direct Investors would come and demand a tax holiday of 10-15 years. When it comes to an end some of them change names and trade their licenses so that there  does not come a time when the holiday is over,’ says Tendai.

Accusations have been made on MNCs for deliberately depriving host countries of dollar reserves so as to weaken their economies.

‘When importing plant equipment they exaggerate the value of their machines so that they are allowed to export more foreign currency. In Nigeria there have been problems in keeping foreign currency reserves yet such reserves help in the stability of an economy,’ adds Tendai.

Tanzanian Co-ordinator for civil organization Policy Forum Semkae Kilonzo says that social services in Africa are poor because the nations are not able to fully utilize their own natural resources.

Africa loses massive financial resources, about $50 billion each year, through illicit activities of MNCs and rich individuals.

These resources if retained in the continent could be invested in the productive sectors of these economies to lift Africa’s growing population from underdevelopment.

According to the African Union/Economic Commission for Africa High level Panel on Illicit Financial Flows from Africa Report, the continent has lost $1 trillion between 1980 and 2008.

This has led to loss of jobs, income, education health facilities and other basic infrastructure critical to structurally transform economies of Africa.

According to the High Level panel’s report the major perpetrators are MNCs especially those operating in Africa’s extractive sector mostly in oil, gas and mining.