Oh well done Mr. Mbeki. And Ritchie

Lovely figures these:

Former South African president Thabo Mbeki has been given the responsibility of leading a high-level team to stem the illegal outflow of about $50bn (R384bn) yearly of African resources out of the continent.

Mbeki, who was recently appointed chairperson of the UN Economic Commission on Africa (Uneca) panel, is determined to put a stop to marauding foreign companies, individuals and governments draining the continent’s resources and wealth with impunity and thereby undermining the prospects of Africa’s development.

“About $50bn is exported out of Africa illegally every year,” Mbeki has said. “Almost $25bn comes into the continent.

“That means (Africa) loses twice the capital it receives in financial assistance.”

This then becomes the proof that country by country reporting is required and that, of course, we\’re all ripping the place off.

But I\’m afraid that we\’re not comparing like with like here. For the $25 billion is the official aid, the ODA stuff. The $50 billion (however inflated or not that number might be) is what is happening in the private sector.

And if we want to talk about the private sector outflows then we\’ve got to compare that with the private sector inflows. Which, if I\’m reading this right, are in the $100 to $120 billion a year sort of range.

Comparing what the private sector takes out with what the private sector puts in might be useful: comparing what the private sector takes out with what the public sector puts in is simply nonsense.

10 comments on “Oh well done Mr. Mbeki. And Ritchie

  1. Don’t want to cavil too much but what does the chump mean by $50b exported illegally? Is this a real illegal $50bn or just $50bn Mbeki & Richie don’t like?
    Surely one should be balancing ‘legal’ private outflows with ‘legal’ private inflows. And for that matter even balancing illegal outflows with illegal inflows. Surprisingly, even the moodiest endeavours are no different from any other business. Still have to be invested in, financed. Even straight out stealing can be low profit as lads who dig tunnels under ATMs can show.

  2. Are the exports of personal wealth by fiendish dictators “legal”? I suppose so. I mean, they signed the e-transfer, and they’re the sole authority. Yet for Africa surely the loss of capital by rapacious local men and women in government far exceeds the loss from marauding foreigners. Open those Swiss accounts!

  3. A small task then. Enforcing law and order over an area of 30,221,532 Sq.k and 55 recognized soveriegn states, heaven alone knows how many religions and shades of religion. The job’s in the worst tradition of UN sinecure.

  4. This is the Mbeki who has himself been accused of corruption over arms deals and who (more seriously given this new job) was found by a South African court to have launched false allegations of corruption against his rivals for political advantage.

    Good to know that he’s serious about it.

  5. And the Mbeki who suspended the head of South Africa’s anti-corruption unit for investigating one of his pals (the pal subsequently being convicted)?

  6. http://www.gfintegrity.org/storage/gfip/documents/reports/gfi_africareport_web.pdf

    Based on a GFI report. Some parts of it are a bit dodgy. They try to estimate underreported capital flows and trade mispricing. The 25 billion looks like the net sub-saharan FDI number since official ODA is a lot higher. (All taken from the World Bank).

    Some of the illegal funds flows do come back of course – some as legal FDI and some as illegal inflows (thief pays for a Mercedes import from funds held offshore).

    Most of the money is being taxed somewhere along the line and is then used productively somewhere else. Would it be good to get a handle on it, yes. Will it make that much difference? probably not. (Maybe in Nigeria?)

  7. I think it makes perfect sense. Mbeki thinks it is fine that stupid White people give him money. Mbeki thinks it is not fine that stupid White people want to make a profit and take their money home. Where he cannot steal it or extort it. One is a good thing, because it enriches Mbeki, the other is a bad thing, because it means that Mbeki cannot enrich himself as much as he likes.

    The interesting question is how many really stupid White people can he find to co-operate with him.

  8. Maybe in Nigeria?

    Ha ha ha ha ha ha ha!

    Sorry, the only difference one could expect from $50bn being “returned” to Nigeria is a few more mansions on Banana Island, slightly broader grins on the faces of Mercedes and Porsche dealers, and a slight increase in the number of Nigerians you see on shopping sprees in Harrods.

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