(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
Unimaginable 425 billion is disappearing from the African continent every year through tax evasion, while at the same time 10 million new jobs are needed every year to keep up with today's unemployment. The role of responsible business in Africa has never been greater.
Foreign Minister Børge Brende spends a great deal of energy on promoting business cooperation as the new wine in development policy, and mentions the relationship between Norwegian companies and African countries as a "win-win". Although more Norwegian investments and more trade with Africa are desired, it is only halfway true that all parties will always have the same interests.
According to Global Financial Integrity, 1,6 times aid to Africa disappears out of the continent in illegal capital flight, and 83 percent of this is the result of the international groups' creative use of tax havens (or secrecy jurisdictions) by international corporations.
Debt Crisis. We cannot pretend that Norwegian business is cast in a unique ethical caliber just because of its nationality. Corruption cases in Yara, Telenor and Statoil clearly demonstrate that even the companies with the largest anti-corruption programs have been involved in shady operations. Therefore, it is perfectly appropriate to ask when Norwegian companies and funds make use of tax havens for their investments.
African countries have on average tax revenues equivalent to 18 per cent of GDP. The OECD countries have a tax credit equivalent to as much as 36 per cent of GDP, which enables these countries to pay for education, infrastructure and health services. When African countries are denied tax revenue, it restores dependency on aid, undermines institutional building, and causes millions of people not to have access to basic necessities. Not only that – the low tax revenue creates crises. A number of African countries are now on the brink of debt crisis, although they could service their loans if it were not for an illegal capital flight.
Disappointing government. When David Cameron, in anticipation of an anti-corruption conference in May, referred to Nigeria as "fantastically corrupt", Nigerian President Muhammadu Buhari did not apologize. Instead, he called for Cameron's help to get billions of dollars illegally shipped abroad, hidden in places like the City of London and the British Territories of Cayman Islands, Guernsey and the British Virgin Islands.
We will not get rid of tax havens and their detrimental effect on development without international cooperation and a critical look at how Western companies operate in Africa. Therefore, it is disappointing that the Government, seven years after the Capital Escape Committee's recommendations, has still not started the necessary work for an international convention against financial secrecy. In addition, the Government has refrained from making demands on Norwegian companies that actually work to stop capital flight. If another seven years go by without political action, it will in fact have catastrophic consequences for human rights on the African continent.
Hermstad is the general manager of the Joint Council for Africa. johan@afrika.no
