The African Cash Which Simply Disappears

A combined panel headed by former South African President Thabo Mbeki and run from the African Union as well as the United Nations released a report describing the strategies some businesses utilize to send cash from the continent illicitly. The losses are staggering not only in relation to dollars but development chances lost, Mr. Mbeki said.

“We’re speaking about big quantities of capital that may play an excellent part in addressing Africa’s development challenges,” he said in a interview.

The scams vary from loggers in Mozambique understating the worth of the lumber to Nigerian officials who send abroad bags of illegally brought in cash.

The panel estimated illegal outflows by adding up disparities involving the reported value of African exports as well as the higher worth those same goods occasionally receive when they arrive to the trading partners in Africa. That investigation revealed that African authorities were casualties of officials or businesses secreting cash and gains out of states.

Mr. Mbeki said he could not name specific businesses that may be at fault because their transactions with tax authorities are private. But he did say “big commercial corporations are undoubtedly the largest perpetrators of illegal outflows, followed by organized crime.”


The difficulty is not unique to Africa. Considered collectively, almost $1 trillion was lost by developing countries in the year 2012 through illegal channels, in line with the Washington-based advocacy and research group Global Financial Integrity.   There’s been numerous reports, studies and investigations yet still there is little change – there’s many documentaries available online which demonstrate the issues – the Washington based ones reference are difficult to access outside the US though unless you use something like this on an iPad technical guide.

But economists say because its authorities lack the institutions and expertise to see and stop capital flight Africa suffers. In certain states, regulation is not overly centralize — Nigeria has 12 agencies with some responsibility for coming illegal flows– offering broad regulatory and enforcement opportunities for people who wish to use them.

And the 54 nations in Africa have little opportunity or the ability to exchange advice to help each other pursue possible tax dodgers.

The lack of capital is very distressing because the development needs in Africa are acute.

“The gains of the increase have largely been confined to those at the very top of the income distribution also it hasn’t been accompanied by means of a growth in jobs,” wrote the group, formally known as the High Level Panel on Illegal Fiscal Flows from Africa.

‘This is a typical issue… We all need to act in concert’

That indicates that shipping and logging companies are by choice underreporting the level of wood they manage to pay taxes that are lower, the report argues.

And Ghana, Kenya as well as a half dozen other African nations are considered to be losing tens of countless dollars annually to a scheme cellular telephone companies utilize to make international calls seem as local calls, which are taxed at lower rates to regulators.

Taken collectively, the panel said, illegal flows “are negating the anticipated positive effect of increased growth on the continent.”

Even as African nations work to stem the illegal flows, Mr. Mbeki said wealthy donors and trading partners must make their corporations pay the proper taxes for pursuing new customers and abundant mineral deposits in Africa’s fast growing markets.

Technical Citation –

East Africa to Receive $1 Billion Development Loans

The World Bank has announced a loan package of over $1.2 billion to assist in development projects. The majority of the money will be used to help improve infrastructure, specifically inland waterways and ports in Tanzania and Kenya.   One of the aims of the projects is to boost integration between the countries of this region.

The funds will initially be used to help revive the waterways on Lake Tanganyika and Lake Victoria, two of Africa’s most iconic lakes.  There will also be multiple projects in Mombasa and Dar es Salaam to improve the efficiency of these two busy ports.


Lake Victoria, Tanzania

The East African Community, which consists of five nations – Rwanda, Burundi, Uganda, Kenya and Tanzania have a combined economic total of some $110 billion.   This could be increased markedly if there was better cross border infrastructure, which these loans will hope to help rectify.   There have been several large oil and gas discoveries in the area, and there is also a much more increased exploration activity.  It is expected that this will identify even more natural reserves in the future.

The gas and oil finds are of course, the reason the World Bank is able to invest such large sums in infrastructure projects.  It is essential for extraction purposes that the region has better and easier movement of people, capital and goods.   The World Banks loans are expected to fund such projects over the next three to seven years.

Where there is oil and gas, of course investment is normally quite simple to attract.  At the meeting in Nairobi, the European Union representative announced that they were ready to support projects for up to $750 million also.  These sums are huge but unfortunately  the requirements to upgrade infrastructure are even more massive.  Several studies have attempted to assess the investment needed with several reckoning sum $68-$100 billion will be needed.   This is to help build roads, ports, railways and also to develop the pipelines needed to extract oil and gas.

There is a hope that the area can also get some other improvements specifically in communication technology.  It is hoped that with improved internet access, many east Africans and companies can tap into the digital economy.  Currently connectivity is patchy, don’t try and stream video from anywhere outside the main centers of population.  Speeds are still very low, even if you can get a connection – you might also need some sort of VPN like this method.

Much of the investment for the pipeline infrastructure, will probably be funded by the oil companies however this is likely to impact the net returns that the region can expect to receive.  It is hoped that there are additional economic benefits brought from the infrastructure alone.

Jenny Williams

Writer and Blogger

Source: Here 

Will Oil Bring Prosperity or Chaos to East Africa

Many in the oil industry are looking towards East Africa as the next great oil reserves.  There have been many discoveries over the last few years that seem to be commercially viable, including some in Uganda, Mozambique and Tanzania.

Of course these countries have numerous problems, but if used responsibly the billions of dollars of oil revenue have the capacity to radically improve the area.  Improvement in social services and overall infrastructure is desperately needed and oil revenue would seem an obvious solution to deliver these changes.


It seems very straight forward, however nothing rarely is in Africa, where it has been seen that having natural wealth and resources rarely lead to economic growth and developments.  There are a host of African countries with high levels of valuable natural resources such as Nigeria, Angola and the republic of Congo – all should be relatively wealthy and well developed, however they are among the poorest in the world.  There is a single issue which reflects the problems in these countries – the inequality of wealth distribution.  The wealth all ends up in the same places and it’s never for the overall good of the country.  It could be said that the wealth brought by natural resources in some African countries actually makes things worse for the population.  Civil wars are common, usually caused by the battles to control the resources.

There are exceptions of course, which represent a real light of hope for such African economies.  Botswana for instance has engineered extensive development using it’s natural resources.    The key is to have some sort of stable governance in place to effectively and fairly utilise the resources,  unfortunately this is often missing in many African nations.    Without this, there is unlikely to be any developmental improvements from the exploitation of natural resources.

It is an issue that is often covered in the world’s media.  Last month there were several in depth documentaries on the subject, arguably the best was a short piece on the BBC current affairs programme – Newsnight.  You can access this from the BBC iPlayer application – use this method which illustrates how you can use a proxy to even watch from the USA.

It is in most people’s interests to have a stable and transparent government to help utilise any economic benefits.   The major oil producers will much prefer to exploit reserves in a stable democracy than through militias and corrupt, self serving individuals.  It is hoped that the benefits will filter down to the people of these African nations, and hopefully the East African oil boom won’t turn out to be a more of a curse to the nations.

Jeremy Holdings

Further Information on Obtaining a British IP address.


South Africa Narrowly Avoids Recession

It was close, but the latest South African economic results have delivered small growth which has meant the country is not quite dipping into recession. However the promises by the government of reinvigorating the economy seem to be fairly empty at this point.

There is no doubt that the South African economy has struggled over the last couple of years. There have been numerous problems – strikes in many sectors, low confidence from investors and of course the numerous power shortages that have been experienced throughout the country. These issues have led to the President, Jacob Zuma making economic growth one of his priorities when he led the ANC to victory in May.

South African Economic Clouds

The idea was to introduce a series of measures intended to give the economy a big boost or ‘jump start’. The latest figures suggest that this hasn’t happened yet though with only a very small growth being recorded and some important sectors still shrinking.

Manufacturing is still shrinking which is one of the biggest concerns, where as what growth that has been achieved has been led by transport and government spending. There was some good news in the agricultural sector due to some good harvests.

Many economists are predicting that growth will continue, the problem is that the level is not high enough to help the economy recover overall. South Africa has many problems, specifically structural ones like education, transport and energy issues. These problems are costly to rectify and need high levels of growth to finance improvements steadily over the next decade or so. South Africa is the most developed country in the continent, yet it still suffers from high levels of unemployment, poverty and inequalities. These are all factors which can cause unrest and more social problems within the society, again which can spiral into issues that will hold back growth – the platinum miner’s strike is one such example.

President Zuma has pledged to achieve levels of growth in excess of 5 % by 2019, although there has been little detail behind this promise. The signs are worrying, already this year African Bank Investments, an unsecured loan provider, has collapsed. Indeed without the central bank intervention, it would have ceased to exist. Rising inflation and slow economic growth is of course a dangerous combination and one that is particularly difficult to solve using monetary policy. The central bank has been forced to raise interest rates again which is obviously not going to help growth and investment either.

There are some bright signs however, significant investment has been made in the telecoms sector allowing the possibility of expanding employment and opportunities in the digital sector. Things aren’t perfect but many digital based companies using tools like a fast vpn service and remote hosting in order to expand their business internationally. South Africa has a high number of technology literate graduates produced by it’s Universities.

There are many who remain optimistic about the prospects for the South Africa. Africa itself, is cited as one of the biggest economic opportunities in the world, particularly with regards to technology and telecoms based businesses. There’s no doubt that South Africa has a flexible workforce and overall a robust financial system to hopefully benefit from these opportunities.

Charles Mackintosh
Ninja Proxy Guy


Digital Security in an Insecure World –

Using VPNs against region Locking –


End of Poverty, Africa Rising? Well Maybe.

The buzzword in any blog, newspaper or media site discussing the future of Africa is ‘ Africa Rising’.  It’s long been agreed that the economic development of the African continent is essential to bringing the population out of poverty and to transform whole nations.  The talk is of course of inward investment in places like Nigeria and South Africa, where companies and countries invest in developing infrastructure in exchange for shares in mineral wealth and economic opportunities.

The reality is that sitting on a ton of oil or valuable minerals is never going to really transform ordinary African lives as we’ve seen repeatedly across the continent over the years.  Of course if the wealth that came into the country was dispersed fairly into welfare and development projects then it might be possible, but we all know the reality of what actually happens.


So if there is limited development options, what’s the one area likely to transform the continent and ordinary people’s lives.  It is of course education, the cornerstone of any successful and prosperous society. However in Africa there is probably an even more pressing focus – the education young girls.   The figures compared to a developed society are pretty shocking, in Sub-Saharan Africa nearly 80% of rural girls do not complete even a primary level of schooling.  An estimated 250 million children of primary age cannot read , write or do the very basic maths.

Education is the smartest investment any country can make in it’s long term future.  Lots of surveys and studies and real case scenarios support this.  Reports that show that the estimated economic gain in achieving universal primary education far exceed the increase in public spending required to achieve this makes a compelling argument. Just by going to school for one more year is likely to increase an individual’s earning by 10%.  In the case of girls those figure can be higher, a young girl who completes a primary education is likely to see a 10% gain in earnings over their lifetimes.

The figures, and research all point in one way, if you increase the level of education that has a direct effect on both the individuals and crucially the GDP of their home country. With girls, the results are almost always even more impressive with child marriages, child mortality and maternal deaths all falling in response to higher education levels in women.  The focus on educating girls, seems almost unfair but in many countries the opposite is happening, many African countries lose a fortune every year simply because they do no educate girls to the same level as boys.

There is no real reason why girls cannot be educated to the same level, some may point to cultural factors but in most cases it’s simply a way of sharing scare resources.  There are limited chances for education and boys tend to be first in the line for those.  The reality is that education needs to open to all, but the economic benefits are greater when you ensure a girl has a decent education.  The infrastructure now is improving rapidly in Africa, particular with regards the internet and telecoms.  This is where the opportunity lies for increasing education, with the right software, internet connection and a handful of computers – you can educate hundreds of people to a decent level.

You don’t need a huge number of teachers or educational resources, the internet and online education can reach many if it’s set up properly.  In the past, you would need to buy the best proxy program to even access many educational resources but that’s no longer true.  The resources required are negligible compared to the waste of human resources and the impact on people’s lives – education is the route for every African nation to a better standard of living for all it’s citizens, it really is that simple.

Joe Francis writes online for a variety of internet sites often with an African or Asian focus.  He currently is helping set up a new IT site – which covers new technology available online for travellers and people working away from their home.

Southern and Eastern Africa Policy Research

Southern and Eastern Africa Policy Research Network (SEAPREN) was a network of six research institutions who were engaged in strengthening policy analysis in their home countries. The network was established in Gaborone, Botswana November 1999.

The aim of the Network was to collaborate on national and regional research projects and capacity building; exchange best practices and mutual learning in research as well as institutional management; and monitor international developments and new approaches within the field of policy analysis to ensure that network members used best practices and techniques.

The network was driven by a Secretariat, which was housed at the Economic and Social Research Foundation (ESRF). The responsibility of the Secretariat was to ensure that the network was managed effectively and efficiently, and was properly resourced at all times. The network took off in 2002 with the seed funding provided by the International Development Research Centre (IDRC).

The IDRC generously funded several meetings of the network and thus was instrumental in its creation. On 24 Janaury 2003, IDRC contributed a Grant to the value of US$ 250,000 for a period of 18 months. These core funds allowed the network to start its activities in the fields of collaborative research, training and dissemination.