By Jeph Ajobaju, Chief Copy Editor
Nations that benefit from stolen funds should refund them to rightful owners with interest to help stem the rising tide of Illicit Financial Flows (IFFs), Bolaji Owasanoye has advocated.
The Independent Corrupt Practices and Other Related Offences Commission (ICPC) chairman also disclosed that, as part of measures to curb IFFs, the government is reviewing transactions in oil and gas, tax investments, and the use of waivers.
He made the points at the international conference on IFFs and Asset Recovery held in Abuja, where he said illegal movements of funds out of Africa makes the continent the biggest victim of IFFs.
Owasanoye urged beneficiaries of IFFs to deduct loans to African countries from illegal funds stashed in their banks and return outstanding sums with interest.
“Africa is the biggest victim of IFFs,” he stressed. “If you evaluate what we have lost as a continent against what African counties owe, Africa should be a net creditor to the world.
“They can decide to deduct the loans given to African countries from all the money taken from the continent, there will still be a substantial amount to return to Africa.
“The money should also be returned with interests as they have been in use over there. The money should be placed in an Escrow account, and a regional development bank that knows how to manage money should be in charge of such funds.”
Workable framework
Owasanoye advocated a workable framework to reduce the timeframe for the repatriation of stolen funds and assets, decrying the huge loss suffered by Africa due to long and tedious processes that take several years to complete.
He also cited efforts by Abuja to block illicit outflows of funds through the review of international transactions that enable IFFs.
“We are reviewing the legacy transaction in oil and gas, tax investments and the use of waivers in Nigeria to close loopholes that facilitate IFFs.
“For instance, a lot of damage can be done through confidential clauses in loans, oil and gas contracts, and others. The review will prevent dodgy politicians from taking money out.”
Souad Aden Osman, a member of the Thabo Mbeki Panel on Illicit Financial Flows out of Africa, said efforts to stop IFFs are more critical now than ever due to the huge level of poverty and underdevelopment in Africa.
Osman, in her lead presentation on the Common African Position on Asset Recovery (CAPAR), urged African countries to mount a coordinated effort against IFFs by taking action and speaking with one voice to recover stolen funds.
“CAPAR is the bedrock for technical instrument for negotiating for funds taken from the continent to be returned. It recommends efficient recovery and unconditional return of stolen assets with due respect to our sovereignty,” she said.
CAPAR has recommended using recovered assets for the good of citizens and not be allowed to be re-stolen.
“The recovery and return of asset must be applied for the development of the country. We should be mindful that the identified assets are at the risk of retransfer unless frozen by destination countries,” said Osman of the Coalition for Dialogue on Africa (CoDA), a civil society organisation.
Policy dialogue
African Union Advisory Board Against Corruption (AU-ABC) Chairman, Luis Andriamifidy, cited challenges the board faces in repatriation of IFFs to include sovereignties of countries involved, adoption of a common legal framework, and court processes especially on admissibility of evidence.
He emphasised the need for policy dialogue to ensure a common Africa position and called for strong advocacy within and outside the continent.
Sierra Leonean Commissioner of Anti-Corruption Commission, Francis Ben Kaifala, lamented cultural differences and how assets recovery has not taken root in many African countries unlike Nigeria and Kenya.
He disclosed that his commission has in two years recovered over $3 million in cash, apart from cars and houses, among others, more than what the country had achieved in previous 18 years.
He stressed the importance of developing common legal assistance to reduce resources spent in chasing IFFs by African countries.
Kaifala also recommended training, pressure on international bodies, streamlining recovery processes to make them less cumbersome, and a proper framework for the discovery and disposal of assets as part of measures to address IFFs.
Irene Ovonji-Odida, a member of the United Nations High Level Panel on IFF (FACTI Panel), enthused that the conference will deepen understanding of IFFs and the commitment to curb it.
She said FACTI discovered that $1.6 trillion, or 2.7 per cent of global Gross Domestic Product (GDP), is lost to money laundering, and $500-600 billion lost to tax havens of corporations and PEPS.
Besides, she added, between $20 and 40 billion is lost to bribes for public officials in developing countries and $7 trillion lost to private wealth hidden by banking secrecy in advanced countries.
In her view, these loses are responsible for fiscal deficits, regressive taxation, criminality, low public trust, and weak rule of law, among others.
Ovonji-Odida said FACTI has recommended an overhaul of international tax norms and institutions, corporate tax vision, reforms on transparency, as well as law and enforcement reform with greater transparency and dynamic response to risks.
Political will
Pan-African Lawyers Union (PALU) Chief Executive Officer, Don Deya, added that sustaining political will is key to tackling IFFs.
He suggested reform of international tax laws and institutions and urged journalists and whistleblowers to put pressure on beneficiary countries.
Alvin Mosioma, Executive Director of Tax Justice Network Africa, identified the lack of political will to concretise and transfer talk into action on IFFs.
He aligned his recommendations with those of FACTI and stressed the need for more political support, creation of accountability mechanism for leaders both globally and nationally, and increased capacity building for countries.
He charged Africa to present a united front against IFFs which are affecting it adversely as a developing continent.
Fiacre Kakpo, a journalist with Agence ECOFIN, Togo said Africa needs to take the bull by the horns and ask the international community to stop IFFs.
He suggested Africa insists on accurate tax information and ensures all loopholes in tax laws are plugged.