Systematic looting robs Africa of billions of dollars

 In Campaigns, News

Staff writer

Natural resource governance activists have called on African leaders and corporates to stop the systematic looting of resources because it deprives the states of meaningful revenue needed for development.

The call was made at a regional conference on the political economy of resource looting in the SADC region organized by Centre for Natural Resource Governance (CNRG) Southern Africa Political Economy Series (SAPES Trust) and regional watchdog Southern African Resource Watch (SARW) in Harare on Thursday. Experts were drawn from the Democratic Republic of Congo, Mozambique, Zambia, South Africa and Angola.

Southern Africa is losing tens of billions of American dollars in potential natural resources revenue through systematic looting which includes trade mispricing, tax avoidance, corruption and transnational organized crime involving ruling elites and foreign actors, regional natural resource experts have said. 

Addressing delegates, Angola’s Manuel Pembele Mfulutoma, Coordinator at AJUDEC said political patronage during the tenure of former president Edwardo Dos Santos bled the country of billions of dollars generated from the exploitation of natural resources like oil, natural gas, diamonds, phosphates, bituminous substances, iron, and copper among others.

In 2011, Global Financial Integrity revealed that $6 billion was spirited out of Angola in 2009, through capital flight and trade mis-pricing, said Pembele.

The practice is mainly done by oil producers in collusion with the ruling elite.

CNRG board chairperson Trust Maanda said Zimbabwe is also losing unquantified billions. In 2016 former president Robert Mugabe estimated that around $15 billion dollars from Marange diamonds had been spirited out of the country.

Maanda said in 2018, the Reserve Bank of Zimbabwe named corporates and individuals who spirited foreign currency out of the country.

“RBZ revealed that about $3 billion had been externalised and of that amount, about 95 percent of the money was from natural resources extraction. This is another form of looting and nothing has been done despite numerous threats.

It emerged that Zimbabwe has deliberate poor laws or policies and regulatory frameworks like the Mines and Minerals Act which are designed to facilitate the looting of natural resources.

According to Zimbabwe Environmental Law Association Executive Director, Mutuso Dhliwayo, the existing mining laws set the basis for exploitation or optimum benefits.

“The Mines and Minerals Act amendment has seen four ministers come and go without it being concluded. The attempts to amend this act are piece-meal. The administration likes it as it is because it presents them with loopholes that facilitate the looting of resources,” said Dhliwayo.

SARW Executive Director, Claude Kabemba bemoaned as deceitful the fact that in Africa, most Constitutions entrust the states as owners of the resources, but which they are unable to protect.

“Our constitutions in Africa say the minerals belong to the state but that is a lie because they are given to private companies. These private companies, because of badly negotiated contracts and corruption, take all the benefits. Most African states are getting meagre revenues from the natural resources except Botswana which has 50-50 with De-Beers.

Kabemba said it is shocking that the same De-Beers mining company which has a fair deal with Botswana cannot be subjected to the same scheme in South Africa and Namibia.

“De-Beers are in South Africa and Namibia but these two countries cannot have the same deal as Botswana. In South Africa, the government is only allowed to retain 5% of the diamond to be cut and polished.

Kabemba said Africa is lagging behind in terms of development and is likely to miss the Sustainable Development Goals.

“Mineral resources are not linked to the rest of the economy in Africa. They jump from Marange to Harare and then get out of the country. The revenues we collect are not enough to deal with our development needs. Governments cannot meet our social needs,” he said.

In DRC, Enerst Mpararo, National Coordinator, Ligue Contre la Corruption said resources have been used by the ruling elite to consolidate power.

He said African states which include Zimbabwe, Uganda and Angola which assisted Laurent Kabila to overthrow Mobutu Seseseko were paid using minerals.

“According to the United Nations report, Zimbabwe demanded diamonds through Billy Rautenbach and they were given.

“Uganda and Rwanda got Gold, Cobalt, and Angola demanded oil. The UN Report of 2000 concluded that the illegal exploitation of Congo was linked to the conflict and panel of experts which included the late Koffi Annan said ‘the conflict in DRC is the conflict to have access to the mineral and control them.’”

Other SADC delegates present at the conference also told the same tale of systematic looting which has denied their countries meaningful development

Both Zambia and Mozambique are losing billions of dollars every year, according to Edmore Kangamungazi, CARITAS Zambia and Hermenegildo Mulhovo, Executive Director, Institute for Multiparty Democracy in Mozambique respectively.

The regional natural resource experts suggested that there is need for harmonisation of the laws in the region as well as adoption of mineral resource governance, stronger contract negotiations and development of a model contract in order to curb the leakages.

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