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Africa loses US 80 billion dollars annually
in illicit financial flows: AU official   

ADDIS ABABA Ethiopia (Xinhua) -- AU Commissioner for Trade and Industry, Albert Muchanga, on Thursday revealed Africa loses 80 billion U.S. dollars annually from illicit financial flows, which he described as impediment to Africa’s economic transformation.

Muchanga made the remarks on the sidelines of the opening of 32nd Ordinary session of the AU Executive Council under the framework of the 30th AU Summit, in Addis Ababa, capital of Ethiopia.

“Africa loses 80 billion dollars in illicit financial flows, 70 percent of that in the extractive industries, that is mineral resources, accounted for by the accounting practices of multinational corporations which use a wide array of creative accounting,” he said.

Muchanga mentioned over-invoicing and mispricing to avoid paying taxes and declaring dividends as well as accumulating all the benefits of mining in other jurisdictions as examples of creative accounting.

“The issue of illicit financial flows has been taken up at the highest level by the Heads of State and Government, through the appointment of the High Panel led by former South Africa President Thabo Mbeki, which are actively engaging stakeholders to curb the flow of much needed resources from the continent,” he said.

Moussa Faki Mahamat, African Union Commission Chairperson, also talked about the scourge of illicit financial flows during the opening 32nd Ordinary session of the AU Executive Council.

“All African nations are concerned with corruption coupled with illicit financial flows, at varying degrees. Like terrorism, the fight here should be global and can only be won by our collective action. The year 2018 is set to be the year of this fight,” he remarked.

Recognizing the dangers of illicit financial flows to Africa’s renaissance, the 30th AU summit which kicked of Monday is being conducted under the theme “Winning the Fight Against Corruption: A Sustainable Path to Africa’s Transformation.” The biannual summit will last until Jan.29.



AU Executive Council highlights robust efforts against corruption

ADDIS ABABA Ethiopia (Xinhua) -- Chairperson of the African Union (AU) Commission Moussa Faki Mahamat on Thursday reiterated the need to adopt robust efforts to fight corruption, which he described as the scourge on the continent.

Mahamat made the remarks at the opening of the 32nd Ordinary Session of the AU Executive Council under the framework of the 30th AU Summit, in Addis Ababa, capital of Ethiopia.

The two-day meeting, attended by ministers of the 55 AU members as well as AU officials, will be followed by the Assembly of the Heads of State and Government on Jan. 28 and 29.

The chairperson also reiterated the need to address illicit financial flow, which he said accompanies corruption to deprive the continent of tens of billions of dollars.

Many African countries are working toward their goals of achieving middle-income status by the next decade, which are unlikely to be realized unless corruption is aggressively and swiftly addressed, said Vera Songwe, Executive Secretary of the UN Economic Commission for Africa (UNECA), at the opening.

Corruption has debilitating effects on economic growth, investments, poverty reduction, state capacity and public trust and confidence in governance, said Songwe.

The AU estimated that every year over 148 billion U.S. dollars, which represent about 25 percent of Africa’s average GDP, are drained out of the continent through corrupt activities, she said.

“For a continent that desperately requires substantial resources to meet its extensive development needs, including in filling its huge infrastructure gap, such a significant amount of financial resources leakage through illicit flows and various forms of corrupt activities is definitely something that needs to be fought with every energy that can be mustered,” she emphasized.

During the council meeting, African ministers will convene to deliberate on their agendas which include consideration of the report of the Permanent Representatives’ Committee of AU, the Annual report of the chairperson of the AU commission for the period from January to December 2017.

They are also scheduled to consider the report on the implementation of the assembly declarations related to Single African Air Transport Market, Agenda 2063, the African candidature in the international system and the International Criminal Court (ICC).

According to the AU, high moments during the Executive Council meeting will feature the election and appointment of the ten members of the AU Peace and Security Council, a member of the Advisory Board on Corruption and two members of the Pan-African University Council.


AU set to launch three flagship projects towards accelerated integration of Africa

ADDIS ABABA Ethiopia (Xinhua) -- The African Union (AU) is set to launch three “flagship projects” during its summit, which will help accelerate Africa’s integration, said chairperson of the AU commission at the ongoing summit on Thursday.

The three projects include the Continental Free Trade Area (CFTA), the free movement of persons and goods, and the implementation of Yamoussoukro decision on the single market and liberalization of air transport in Africa, said the chairperson Moussa Faki Mahamat at the opening of the 32nd Ordinary Session of the Executive Council of the AU, in Addis Ababa, capital of Ethiopia.

The United Nations Economic Commission for Africa (UNECA) estimated that the CFTA has the potential to boost intra-Africa trade by 53.2 percent by eliminating import duties and to double such trade if non-tariff barriers are also reduced.

“Consolidating this continent into a single trade area provides great opportunities for trading enterprises, businesses and consumers across Africa and the chance to support sustainable development in the world’s least developed region,” said Vera Songwe, Executive secretary of UNECA, at the council meeting.

The AU heads of states adopted a decision in January 2012 to establish the CFTA with an indicative date of 2017.

The launch of SAATM (Single African Air Transport Market), expected on Jan. 28, will spur more opportunities to promote trade, cross-border investments in the production and service industries including tourism, resulting in the creation of an additional 300,000 direct and 2 million indirect jobs, said AU Commissioner for Infrastructure and Energy Amani Abou-Zeid in a statement released by the pan-African bloc on Monday. It will contribute immensely to the integration and socioeconomic growth of the continent, said Abou-Zeid.

So far, 23 African countries out of 55 have subscribed to SAATM , whereas 44 African countries have signed the Yamoussoukro Decision.


AU urges coherent policies, prudent regulatory
frameworks to modernize Africa’s mining sector

ADDIS ABABA Ethiopia (Xinhua) -- The African Union (AU) on Thursday urged its member states to apply effective measures in a bid to modernize and augment the benefit from the continent’s mining sector.

The pan African block made the call during the 30th AU assembly of heads of state and government, which is underway from Jan. 22 to 29 at its headquarters in Ethiopia’s capital Addis Ababa.

Muchanga Albert, AU Commissioner for Trade and Industry, told journalists on the sidelines of the summit that member states should set up coherent policies, prudent and strong legal and regulatory frameworks to effectively cascade the mining sector.

According to the AU, Africa is the world’s top producer of numerous mineral commodities and has the world’s greatest resources of many more, but most of Africa still lacks systematic geological mapping which could bring to light a much greater resource base.

Though Africa has significant known resources of fossil fuels (oil, gas and coal) and has large biomass and bio-fuels potential (ethanol, bio-diesel), most of Africa’s minerals are exported as ores, concentrates or metals, without significant value-addition, it was noted.

Albert further indicated that the AU together with the United Nations Economic Commission for Africa (UN-ECA), in a bid to ensure that Africa benefits from the Extractions of the continent’s mineral resources, have developed various measures and instruments.

According to Albert, a Geological and Mineral Infrastructure System (GMIS) Strategy, which will assist AU member states in having full knowledge of their mineral wealth endowment is one among the initiatives introduced.

He also revealed the African Governance Framework, which envisaged to ensure mutual transparency and mutual accountability between governments and mining firms with the objective of ensuring that Africa earns optimal benefits from its mineral resources.

The Africa Mining Vision Private Sector Compact, which aimed at ensuring mutual trust between governments and mining companies, was validated in Namibia in October by the Continental Association of Chambers of Mines and other Mining Associations in Africa (ACMMAA) to streamline efforts in the sector.



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