The report launched ahead of November’s G20 summit, The Trillion Dollar Scandal, estimates approximately 3.6 million deaths could be prevented
each year in the world’s poorest countries if the tide of corruption and criminality is stemmed. Coincidently, there are also 346 million Africans with no access to safe drinking water, and 672 million people will not use improved drinking water sources in 2015. Devastatingly, 99 of deaths from poor drinking water equate to approximately 3.6 million deaths annually in Africa. This leaves Africa with a death toll of 7.2 million unnecessary deaths each year.
Dr. Sipho Moyo, Executive Director at ONE Africa has said: “In Africa, corruption is a killer. Up to 3.6 million lives could be saved in developing countries if we end the web of secrecy that helps the criminal and corrupt. When governments are deprived of their own resources to invest in the essentials—like nurses and teachers—the human cost is devastating.”
What is required is a set of the new water-tight policies to increase transparency and combat corruption in four key areas;
- Natural resource deals
- The use of phantom firms
- Tax evasion, and
- Money laundering
Kenyan Anti-Corruption Campaigner John Githongo said: “For too long, G20 countries have turned a blind eye to massive financial outflows from developing countries which are channeled through offshore bank accounts and secret companies. Introducing smart policies could help end this trillion dollar scandal and reap massive benefits for our people at virtually no cost. The G20 should make those changes now.”
This estimated one trillion dollars is generated through genuine business activity but the profits are illegally channelled off the continent. The problem is actually much larger that estimated by the Progress Panel and the World economic Forum.
Analysis in the report shows and illustrates that if concerted steps were taken and implemented, sub-Saharan Africa recovery of their portion of the money could: Educate an additional 10 million children per year; Pay for an additional half-million primary school teachers – providing all out-of-school children in 16 African countries with an education; Provide antiretroviral drugs for over 11 million people living with HIV/AIDS – more than 95% of those eligible; and pay for almost 165 million vaccines.
Natural resources such as oil, gas, and minerals can be a source of significant wealth and economic growth for developing countries. 20 countries in sub-Saharan Africa are rich in natural resources, yet he profits of such companies are robbing their future livelihoods and that of future generations. This money itself can also allow Africa to fund its own development and not have to depend on foreign aid to plug the funding gap.
ONE’s report calls on G20 leaders to take action in four areas:
Shine a Light on Phantom Firms: Make information public about who owns companies and trusts, to prevent anonymous shell companies and similar legal structures from being used to launder money and to conceal the identity of corrupt and criminal individuals and businesses;
Publish What You Pay: Introduce robust payment disclosure laws to increase transparency in the oil, gas and mining sectors to prevent natural resources in poor countries from being stolen from the people living above them;
Crack down on tax evasion: Institute automatic exchange of tax information so that developing countries have the information they need to collect taxes they are due;
And Open Data: Publish government data so that citizens can follow the money from resources to results and hold their governments to account for the delivery of essential services
Doing the calculations, developing countries around the world could significantly benefit not only from plugging the funding gap but ensuring that their growth rates remain superior and that their average GDP per capita reflects a truer nature of wealth for developing countries. This can add $13 trillion to the global economy, of which such a contribution will primarily be from emerging economies. It is thus evident that emerging economies, whether through all positive means or positive and negative means, is keeping the global economy afloat.
Some critical numbers; $20 trillion is being held in tax havens - all proceeds from emerging markets; $3.2 trillion in undeclared assets also sitting nestled in tax havens; Africa lost $77 billion through illegal outflows in 2011 – this amount has grown; 41.5 percent of company service provides approached to set up phantom companies in the US required no identification; one third of the world’s poorest people live in the riches resource rich countries; and $3.3 trillion hidden in tax havens could generate $19 billion in tax revenue annually on the African continent.
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