Stop the Bleeding Campaign: Can youth numbers count in Africa’s development?

Originally published by NewZWire

Sometimes it feels like a huge weight to explain the thrust of a campaign. It is even more challenging when it is engrossed with technical details and development financing, as in this case. How to get the youth to be interested, understand, and take the steering wheel can either define success or failure for a campaign around sustainable development.

This article is driven by the desire to contribute to the commemoration of the International Day of the African Child. On this day, we remember the children of Soweto who were massacred on June 16, 1976, for protesting against poor quality education and demanding to be taught in their languages.

The numbers don’t lie. Youth in Africa forms the largest demographic group. Mark Twain cautions us that not everything that counts is countable. Inclusivity is the heartbeat of sustainable development, and without the youth voice, development fails a smell test. In this article, we explore playful ways to try and simplify what the Stop the Bleeding (STB) Campaign is all about.

Taking it literally, it is about taking measures to stop the gushing of blood from a cut. If the loss of blood cannot be stopped, it is hard to see how human or animal life can be sustained. The STB Campaign is about a different blood that supports life in an equal measure, that is development finance required to prevent starvation and famines in Africa and provide universal access to public, health, and infrastructure services.

Now let us do a small word puzzle. How many words can one form using all letters from the word “STOP”, one of the defining words of the STB Campaign? With each word formed, how does it relate to the STB Campaign? A maximum of five English words can be constructed and all have huge implications in defining the STB Campaign. The 5 words are Spot; Opts; Tops; Pots; and Post.

Spot the Bleeding

Putting a finger on the spot is one of the main features of the STB Campaign. Having a clear view and identifying areas where resources to finance development are leaking and how much is being lost is quite fundamental. Sifting through the AU’s High-Level Panel on Illicit Financial Flows from Africa Report 2015, known as the Mbeki Report, it is hard to miss the enormous US$50 billion figure. That’s the amount that Africa loses annually due to Illicit Financial Flows (IFFs). The Mbeki Report pointed out the main culprits behind the plunder of resources required to finance Africa’s sustainable development and Agenda 2063 that defines the Africa We Want.

Since the economies of many African countries are driven by mining, oil, and gas sectors, the exportation of raw or partially refined commodities, the extractive sector accounts for the heaviest losses IFFs.

Corrupt public officials are normally berated as the main suspects. But, far from it, the Mbeki report shows that commercial actors are the chief culprits. They largely account for 65% of the losses through aggressive tax planning. Corporations seek to understate as much as possible their tax obligations by manipulating grey areas in local and international tax rules.

Principally, Multinational Enterprises (MNEs) using their vast network of related and opaque corporate structures, have a leeway to decide which jurisdictions to allocate profits without corresponding recognition of the economic activities. Thus, profits are shifted to tax havens where little or no taxes are paid and hardly backed by economic activities, basically to shell companies.

Second, on the list are criminal activities like smuggling and trade of minerals, drugs, wildlife, and human trafficking with a 30% contribution. And contrary to the popular narrative, corruption contributes 5%, although its collateral damage is massive through facilitating the first two activities.

The Mbeki report also spotted the main destination of IFFs from Africa, and the developed countries, the Global North mainly, is the recipient. That means they have a vital role to play to prevent IFFs from flowing into their coffers and track, confiscating, and repatriating stolen wealth from Africa. From the Mbeki Report, we also learn that AID and Foreign Investment are not providing oxygen to the continent’s development life. Rather, what is sucking the oxygen for Africa’s development impetus are IFFs, they dwarf what Africa gains through Aid and Foreign Investment.

Even the crippling debt crisis that is sweeping across the continent can be extinguished if losses via IFFs from 1980 to 2018 were reversed and accumulated. Within this period, Africa lost an astounding 1.3 trillion and its estimated external debt in 2021 stood at US$726 billion. All these factors explained above show that the label of poverty attached to the continent by the global community masks the fact that Africa is a net creditor to the world.

Stop the bleeding!

If you cannot spot the source where the blood is gushing, then efforts to stop the bleeding are fruitless. That’s why the spotting element discussed above gave impetus to the formation of the STB Campaign after the sterling work done by the Mbeki Report to pivot the curbing of IFFs in a quest to ensure that Africa can enhance her sovereignty in funding her development aspirations. From a technical standpoint, all the mechanisms required to stop the bleeding are available. What seems to be the main challenge is the lack of political will at national, sub-regional, continental, and global levels.

The global economic, financial, and tax ecosystem are structured in such a way that the Global South, Africa in our case, remains at the bottom of the food chain system. What this means is that African economies today still mirror the colonial structure of providing raw materials for the industrial and technological growth of developed countries while importing finished goods. By exporting raw or semi-processed commodities, Africa is offshoring economic value in the form of income, foreign currency, tax revenue, jobs, and industrialisation. Corporate impunity is encouraged by the unjust global tax rules and that accounts for the conundrum of limited resources to finance development amid a wealthy portfolio of natural resource assets — land, minerals, oil, gas, forests, and wildlife.

Understandably, Africa cannot solve this problem on its own. The unjust global economic system must be dismantled and replaced by a new order that puts people and the planet first. We can see silver linings from the UN resolution for the establishment of a Tax Convention that takes leadership on global tax reforms. The desired goal is to ensure that MNEs pay taxes in Africa that fairly correspond to their economic activities on the continent, a case in point is the mining, oil, and gas sectors.

Pots — it is about food, how to make the IFFs discourse palatable.

“Give us this day our daily bread” so goes the Lord’s prayer. We need food to grow, stay healthy, for our warmth, and energy and to enjoy the taste as well. Pots are required to prepare food; hence food and pots are almost synonymous. IFFs are not just a technical problem of development finance on the continent. According to World Bank statistics, at least one in every five people in Africa, an estimated 140 million people, face acute food shortages. Behind the famine and malnutrition are IFFs. It is said a hungry person is an angry person. And the explains why conflict and wars are frequently experienced on the continent, and why peace and stability remain elusive. The discussion of IFFs must be humanised, it is not just a matter of technocrats. In the mining sector, we have a situation where mineral ores or partially processed minerals are taken from the pits straight to the ports for exports without putting anything in the pots of resource communities.

Opts — what our option

Africa has options to vigorously pursue the mobilisation of resources to finance the continent and national development aspirations. Among these options, what Tops the agenda is fighting commercial-related IFFs, bulky sources of the leakages. In pursuance of the options that Africa faces, there is no room for a siloed approach. Tax, Debt, Trade, and Investments are intertwined, and these fiscal and economic injustice issues must be tackled through an integrated approach. Precisely for this reason, the STB Campaign decided to broaden its mandate beyond tax justice to grapple with all facets of development finance.

Post

Though we identify the campaign as Stop the Bleeding, the positive and transformational development outcomes are what inspire the campaign. The Africa we want is unshackled from debt. Africans that are food and nutritionally secure. Peace and stability on the continent, universal access to essential public services and infrastructure. Africa meeting its sustainable development goals and the homegrown development agenda 2063.

Wrapping up

To African youth, forewarned is forearmed. Heed the warning from Frantz Fanon; out of relative obscurity, a generation must discover its mission, fulfil it or betray it. This way of playing with words is an attempt to design more tools to use as we focus on mobilizing Africans to raise the political cost of inaction when it comes to curbing the IFFs that are behind the diminished ability of the continent to finance sustainable and broad-based socio-economic development.

More creativity is required to ensure that in many ways — songs, poems, drams, paintings, and pictures, help to spread the message, arm in arms, mobilise vigorously African youth to push for a change in the global, regional, and national economic, financial, and tax system, even the politics.

Now that we can surely Spot the bleeding, the focus is firmly on stopping the bleeding. However, care must be taken to ensure that injustice around tax, debt, trade, and investment is not left to technocrats. That is why bringing in pots to the discussion matters — don’t steal our food! Corruption must be uprooted in Africa, but corporate tax dodging tops our reform agenda. More importantly, we are thinking and fighting with the end in mind — the achievement of the Africa We Want, AU agenda 2063, and the UN’s agenda for sustainable development 2023.