Africa subsidises the rest of the world by over $40 billion in one year, according to new research

Much more wealth is leaving the world’s most impoverished continent than is entering it, according to new research into total financial flows into and out of Africa. The study finds that African countries receive $161.6 billion in resources such as loans, remittances and aid each year, but lose $203 billion through factors including tax avoidance, debt payments and resource extraction, creating an annual net financial deficit of over $40 billion.

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The research shows that according to the most recent figures available in 2015:

  • African countries received around $19 billion in aid but over three times that much ($68 billion) was taken out in capital flight, mainly by multinational companies deliberately misreporting the value of their imports or exports to recuse tax.
  • African governments received $32.8 billion in loans but paid $18 billion in debt interest and principal payments, with the overall level of debt rising rapidly.
  • An estimated $29 billion a year was stolen from Africa in illegal logging, fishing and the trade in wildlife and plants.

Tim Jones, economist from the Jubilee Debt Campaign, said: “The African continent is rich, but the rest of the world profits from its wealth through unjust debt payments, multinational company profits and hiding proceeds from tax avoidance and corruption.”

Aisha Dodwell, a campaigner with Global Justice Now said: “There’s such a powerful narrative in Western societies that Africa is poor and that it needs our help. This research shows that what African countries really need is for the rest of the world to stop systematically looting them.  While the form of colonial plunder may have changed over time, its basic nature remains unchanged.”

Martin Drewry, director of Health Poverty Action said:  “To end poverty we need to focus our efforts on preventing the policies and practices that are causing it.  That means we need to stop our tax havens facilitating the theft of billions, clamp down on illegal activities and compensate African countries for the impact of climate change that they did not cause. “

Bernard Adaba, policy analyst with ISODEC in Ghana said: “’Development’ is a lost cause in Africa while we are haemorrhaging billions every year to extractive industries, western tax havens and illegal logging and fishing. Some serious structural changes need to be made to promote economic policies that enable African countries to best serve the needs of their people rather than simply being cash cows for Western corporations and governments. The bleeding of Africa must stop!”

The report Honest Accounts 2017: How the world profits from Africa’s wealth, published by a coalition of UK and African organisations, including Global Justice Now, Health Poverty Action and Jubilee Debt Campaign, makes a series of recommendations as to how the system extracting wealth from Africa could be dismantled. These recommendations include promoting economic policies that lead to equitable development, preventing companies with subsidiaries based in tax havens from operating in African countries, and transforming aid into a process that genuinely benefits Africa.

Notes

The research covers the 47 countries classified as ‘sub-Saharan Africa’ by the World Bank.

The research was published by Global Justice Now, Health Poverty Action, Jubilee Debt Campaign, Uganda Debt Network, Budget Advocacy Network, Afrika and Friends Networking Open Forum, Integrated Social Development Centre, Zimbabwe Coalition on Debt and Development, Groundwork and People’s Health Movement.

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Power and privilege- taking a look at ourselves

Reposting today’s HPA blog from Martin about readdressing power balances internally, and in the wider development sector.

Two years ago we worked with others on a report that argued the development sector, through its focus on aid, was obscuring the facts about how poverty is created. It was also reinforcing dubious power imbalances between people and nations that ultimately undermine the ends we seek as a sector.

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An infographic from the Honest Accounts report highlighting the uneven flow of funds in and out of Africa. This is just one manifestation of unequal power relations worldwide.

It’s no secret that these power imbalances are replicated across the Northern INGO sector itself. Sometimes this is reflected in our relationships with Southern partners, sometimes in lack of employee diversity, sometimes in appalling representations of the South in charity communications – and no doubt sometimes in others things too.

One of the key reasons I’m proud to work for Health Poverty Action is our awareness of power.  All our work is focussed on challenging the power imbalances that undermine health, whether that is working with communities who are denied their right to health due to ethnicity, or campaigning to address the global structural causes of poverty.

We see power as central to all our work. Yet, like most Northern INGOS, when it comes to addressing power and privilege in our own organisational structure, we have got serious work to do. Are we communicating accurately about the causes of poverty? Are we advocating effectively alongside others? And are we helping to dismantle some of the barriers to employment in the sector and encouraging diversity in our staff?

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It’s about time we found out. As Teju Cole says “If we are going to interfere in the lives of others, a little due diligence is a minimum requirement.”

So, we are embarking on some active self-reflection. This will cover the way we communicate, staff diversity and how we advocate alongside Southern partners.  First up – our communications. Are we effectively telling the story about people and how poverty is made, or are we inadvertently reinforcing some of the power imbalances we seek to destroy?

We’ve decided to blog about different aspects of this work as we go along, in the hope that this will expose ourselves to critical feedback, help us to get a range of external perspectives, and learn from others.

We’d really welcome your honest feedback and ideas for blogs, or areas of discussion. Just post them below, Tweet us @HealthPoverty or Facebook message us. Or you can send us an email to media@healthpovertyaction.org

Wish us luck.

Martin Drewry

Director

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How Western media would cover Baltimore if it happened elsewhere

Excellent piece from Karen Attiah in the Washington Post, for those who didn’t see it this week. Good in so many directions at once – for instance:

The United Kingdom expressed concern over the troubling turn of events in America in the last several months. The country’s foreign ministry released a statement: “We call on the American regime to rein in the state security agents who have been brutalizing members of America’s ethnic minority groups. The equal application of the rule of law, as well as the respect for human rights of all citizens, black or white, is essential for a healthy democracy.” Britain has always maintained a keen interest in America, a former colony.

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Frankie Boyle does development, colonialism, racism

Boyle commentsNothing left to say after such a brilliant piece, except read it in full on the Guardian website here. One highlight:

Even our charity is essentially patronising. Give a man a fish and he can eat for a day. Give him a fishing rod and he can feed himself. Alternatively, don’t poison the fishing waters, abduct his great-grandparents into slavery, then turn up 400 years later on your gap year talking a lot of shite about fish.

In a further nod to satire, Comic Relief this year focused on Malawi and Uganda. I didn’t see any acknowledgement that Britain had been the colonial power in those countries. “Thanks for the gold, lads, thanks for the diamonds. We had a whip-round and got you a fishing rod.”

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Drugs, Poverty and Development – Policy Solutions?

Panel Discussion
“Drugs, Poverty & Development – Policy Solutions?”
26 February 2015 | 17:30 to 18:30| IPU ROOM

The British Group Inter-Parliamentary Union (BGIPU) and Health Poverty Action (HPA) invite you to a discussion on drugs policy as a driver of poverty and its impact on human rights and international development. HPA will be launching a report that highlights these issues.
The discussion will be followed by a drinks reception.

Chair:Lord Rea, Former Deputy Opposition Spokesperson for Health and International Development

Speakers:
Baroness Meacher, Chair of the Drug Policy Reform All-Party Parliamentary Group
Catherine Martin, Policy Advisor, Health Poverty Action
Sir Keith Morris, Former Ambassador to Colombia
Jeremy Corbyn MP, Vice-Chair of the Human Rights All-Party Parliamentary Group
Dr Julia Buxton, School of Public Policy at Central European University in Budapest

RSVP: ostlers@parliament.uk or 02072193011

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Embrace the complex and temper the ego!

Two reports that really stood out for me last year were Honest Accounts? (by a group of African and UK NGOs) and The State of Finance for Developing Countries, 2014 (by Eurodad). Both reports represent highly impressive attempts to calculate and compare the resources flowing in and out of Africa (the former report) and ‘developing’ countries (the latter one). What are their headline findings? Africa faces a net annual loss of $58.2 billion. And ‘developing’ countries have lost more than double the financial resources that they have received as new inflows since the financial crisis.

While different elements of these reports may be debated, it is clear that they contribute to efforts to put aid into proper context. Unfortunately, most Northern civil society organisations (CSOs) working on global poverty seem to measure their government’s concern for poor people according to the size of its aid budget. Such a mindset is tricky to change. In part, this is because many of these groups financially benefit from aid, or at least aspire to obtain official funding (my previous blog engages with this issue). Beyond this self-interest, I think they possess a general aversion to complex stories (even when talking about aid, the vast majority of CSOs focus on its quantity rather than the more intricate yet important issue of its quality).

Another complex story is that of internal politics in countries of the Global South (which in most cases, it is worth noting, has been shaped by colonialism). In my view, the nature of domestic political systems, and in particular the ways in which formal and informal institutions function, is central to the existence of widespread absolute poverty in these countries. Many have made this argument, particularly in regard to Africa, but perhaps none as powerfully as Matthew Lockwood in his landmark book The State They’re In.

I think that this view is one that many working on global poverty issues in the UK (and in the Global North more generally) find difficult to accept. In part this is due to it being a complex story, but also because such an understanding means recognising that we’re not the main actors in this struggle. While actors based in the Global North can do many useful things to help, it is their counterparts in the Global South that have the most prominent role to play in overcoming poverty.

If this reality is accepted, however, then Northern civil society can properly prioritise its areas of focus. Two key areas emerge from the preceding analysis: supporting local efforts for just and effective governance, and addressing the truly important issues that Northern governments have power over. Whatever else CSOs may work on, these two key areas should be considered cross-cutting priorities.

Any activities to help improve governance must be realistic. Avoiding the imposition of ‘best practices’ that do not fit particular contexts and are not considered relevant by local actors (both those implementing reforms and those supposed to be benefiting from them) is crucial. Similarly, as an IDS study argues, facilitating the efforts of our allies and partners to influence the interests and incentives of powerful domestic actors may be important before more ambitious reforms are attempted. In everything that we do, we must listen to the poor, particularly the most vulnerable amongst them, and build their capacities and encourage them to be critical.

Aid can obviously be one source of resources to enable this work. However, if aid is to achieve even its limited potential, major changes are necessary. The aid effectiveness agenda is only a starting point. Uncomfortable yet important threats such as aid potentially contributing to a new debt crisis, as well as it being a vehicle for (undemocratic and often damaging) economic policy conditionality, must be confronted. Going further still, the entire aid system needs to be made relevant to the 21st century (‘Aid 2.0’), and ways of working need to embrace experimentation, learning and adaptation.

At the same time, Northern actors are very restricted in the extent to which they can positively shape governance in the Global South. Northern CSOs have far more ability to influence those issues over which their own governments wield genuine power. If they truly care about overcoming global poverty, CSOs in the Global North should prioritise working on such issues based on their importance. The research by the group of African and UK NGOs and Eurodad points to the way forwards: far more resources need to be dedicated to campaigning on issues such as illicit financial flows compared to aid (to this I’d add issues such as trade where potential gains/losses are enormous compared to aid).

Achieving agreement at the UN on a strong and legitimate post-2015 development agenda is undoubtedly crucial. But even winning that battle won’t dampen the necessity of confronting and transforming dominant narratives around poverty and development. If we in Northern civil society are to rise to this challenge, I believe that, in addition to ending our obsession with receiving aid funding, it is essential to embrace complexity and address our inflated sense of self-importance.

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Band Aid for Detroit

From our friends at the Council of Canadians, here’s a reworking of the Band Aid single to highlight the assault on the human right to water as a result of the mass cut-offs in Detroit. “Here’s to them underneath that burning greed…”

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