By Jeff Kapembwa
AFRICA should maximise its Domestic Resource Mobilisation through retention of more than US$88 being externalised in Illicit Financial Flows (IFFs) and capital flight annually, and invest in climate financing to protect the environment and repair all related damages to the environment, it has been learnt.
According to the United Nations Economic Commission for Africa-UNECA, the continent was losing an average US$88 billion currently up from the US$55 billion which left the continent to offshore accounts by various uncouth economic players evading tax, which the think tank says should be captured and converted into climate financing.
Africa has in recent years been extending a begging bow to the Green Climate Fund and the United Nations Environment Programme (UNEP) seeking to raise resources in climate financing to reverse the damage caused to the environment by climate-change related actions, despite the continent emitting a paltry 4 percent of the total global emission, chiefly by developed Countries-China, India, United States and Japan, among other GreenHouse Gases (GHGs) emitters.
However, the United Nations and other players that met in Uganda during the Africa Regional Forum on Sustainable Development held from 6-11 April, sought to reinforce identified priorities for Africa which should be protected and help the continent develop, funds permitting, climate change being among the priorities.
UNECA Director: Sub-regional Office for Southern Africa, Eunice Kamwendo, in a statement read in Lusaka during a tax forum and on behalf of Claver Gatete-the United Nations Under-Secretary-General and who is also Executive Secretary of ECA said it was time Africa resorted to enhance Domestic Resource Mobilisation.
Africa has grappled with resource curse and it was time to meet its own financial demands amid threats of drying coffers from the donor community.
Key among areas for financial mobilisation and to meet financing gaps for climate change was the untapped money externalisation from the continent by various players while evading tax, estimated around US$88 billion, with Zambia having its US$3 billion+ share of the losses incurred annually.
Dr. Kamwenda disclosed that climate financing is among one of the priorities identified that should benefit from the resources to be retained through stringent measures to be instituted to halt IFFs.
“Africa’s potential is immense. Yet, we face urgent challenges such as – inefficiencies, glaring resource leakages, mounting debt burdens, climate vulnerabilities, and insufficient representation in global development spaces including in financing institutions.” Dr. Kamwendo said during a Cub-regional meeting on taxation being held in Lusaka, arguing.
“If we do not act decisively, these issues will continue to undermine the continent’s development ambitions.”
Selected priorities that need funding and attention to redress Africa’s financial plight caused by the lack of sufficient tax collection to meet the continent’s needs and need reinforcement include strengthening domestic resource mobilization through expanded tax bases, digitalization, and smarter financial management.
Combating illicit financial flows and tax havens, which drain vital resources. Amplifying Africa’s voice in global tax negotiations, exemplified by our advocacy at the UN for the Framework Convention on International Tax Cooperation.
There is an urgent need to redress odious debt and promote transparent, responsible borrowing. There is dire need to ensure fair access to climate finance—grant and concessional loans—to support adaptation.
This is as given Africa’s disproportionate climate impacts. Valuing Africa’s natural capital and reforming climate finance protocols to ensure fair, sustainable financing; reforming blended finance mechanisms to support development while safeguarding future fiscal space are other priorities.
There is also a need to secure greater inclusion and influence in global financial institutions, – more seats, fairer representation, and impact-focused reforms. Africa should invest in digital infrastructure and public goods to bridge divides, catalyze growth, and promote equality. There is further need to Strengthen the monitoring and accountability frameworks to track progress on commitments made at FfD4.
Dr. Kamwendo remains optimistic that efforts to reverse the effects of IFFs as a collaborative team and supported by cooperating partners including ECA would help member states and the African Union to defray costs incurred in annual budgets to redress climate change.
ECA is desirous to see Africa stand on its own feet-financially after reversing IFFs by the close of 2030, according to Pan African Parliament (PAP) as the effort to unlock the continent’s under-utilized potential continues.
“Let us act with urgency and resolve, for the future of Africa depends on it.”