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Africa loses $50bn a year in plundered resources

Lynley Donnelly  

Clamping down on illicit plundering of food and natural resources could curb Africa's food shortages, says the latest Africa Progress Panel report.

Senegal was estimated to lose as much as $300-million or 2% of its national GDP to illegal, unreported and unregulated fishing in 2012. (Reuters)

Africa’s forests and fisheries, which could be an answer to the continent’s food shortages and dire poverty levels, are instead being stripped illicitly to the tune of almost $20-billion each year. 

When added to the losses the continent is experiencing as a result of other illicit outflows, $50-billion is lost overall each year, or 5.7% of sub-Saharan Africa’s gross domestic product (GDP). 

This is according to findings from the latest Africa Progress Panel report released on Thursday. It was scheduled to launch in Abuja, Nigeria, where the World Economic Forum on Africa is being held, but the launch was moved to London because of rising security concerns.  

Senegal was estimated to lose as much as $300-million or 2% of its national GDP to illegal, unreported and unregulated (IUU) fishing alone in 2012, according to the report.  

The panel, quoting reliable estimates from Greenpeace, points to fishing fleets from East Asia and Russia as the main culprits behind IUU fishing.  

The extensive subsidies rich nations, including those in the European Union, dole out have helped extend global overfishing, according to the panel. Around $27-billion in cheap fuel and insurance has aggravated the “unsustainable mining” of Africa’s waters.  

These issues alongside the battles African farmers face to access finance and markets for their goods has contributed to a food import bill of $35-billion excluding fish, despite having some of the most arable land in the world.  

“As with fisheries, Africa is integrated into a timber export market in which illegal, unregulated and unreported trade flourish, generating fortunes for some, while depleting a vital resource,” says the report.

Trade
Trade with emerging nations such as China adds another layer of complexity. For instance, while there are no official Chinese–owned forestry concessions in the Democratic Republic of Congo, informal Chinese traders buy about four million cubic metres of timber produced under artisanal permits each year. Meanwhile, the DRC is estimated to receive less that 10% of tax dues from logging as a result of tax evasion.  

The panel did not reserve its criticism for richer nations, or multinationals and individuals that profiteer off the continent. It criticised African governments for failing to put in place the policies needed to harness resource wealth and development. 

“More broadly, governments have failed to develop accountable and transparent institutions to share resource wealth equitably and to publish the terms of mining and logging agreements – opening the door to corruption, opaque deals and large revenue losses,” the panel said.  

Former United Nations secretary general Kofi Annan chairs the panel, which includes the likes of Graca Machel and Zimbabwean businessperson Strive Masiyiwa. It advocates for equitable and sustainable development for Africa. But it did offer recommendations that could turn this bleak picture around. These include proposals to unlock what it terms Africa’s “blue and green revolutions”, or its enormous potential in agriculture and agro-industries.  

It made recommendations aimed at boosting inclusive economic growth through the extension of social welfare systems. For instance, African governments should be diverting the 3% of GDP spent on energy subsidies into well-designed social protection, the panel said. 

But to preserve Africa’s fisheries and forests, crucial steps had to be taken by the international community. These included deeming IUU fishing a “transnational crime” and establishing an international registry of fishing vessels similar to that of passenger and cargo ships. 

Increasing transparency by publicising concession contracts and disclosing ownership structures was critical to deter corrupt and illegal practices and enable tax authorities to ensure companies are paying their fair share, according to the report. 

It also recommended an end to the subsidies rich nations gave their fishing fleets. 

Political will
The political will to introduce such measures beyond broad statements of support for various international efforts remains critical. 

According to Caroline Kende-Robb, the executive director on the panel’s secretariat, the question of ocean management had been “bubbling under the radar” for some time and it was due to move to the “front and centre” of global policy debate.  

It was a global problem, she said, but slowly steps were being taken to address some of the concerns. The EU, for instance, had recently moved to reform some of its subsidy schemes to ensure they were not contributing to overfishing.  

Nevertheless, activities such as IUU fishing were not only unethical but also criminal and had to be prosecuted, she said.  

Other levels to addressing these problems include growing international awareness of the global implications of resource plunder. 

It was not simply about helping Africa, but rather doing something because it was “a global good”. “This is good for everybody … if we keep plundering the oceans we are all going to be suffering,” she said.  

The ability of African countries to simultaneously extend social protection systems while faced with other competing needs such as investment in infrastructure and agriculture was a “classic dilemma” facing any government distributing a budget, said Kende-Robb. 

But in many African countries it was not a question of money, given the billions of dollars going into their coffers from natural resource flows or other types of investment, she said. What is at issue is “ensuring that resource flows do end up in the government budget.”

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