Illicit financial flows drain Africa's mineral wealth — Greenpeace

AFRICA is losing billions of dollars every year through illicit financial flows (IFFs) from its mineral sector, undermining the continent's potential to benefit from the global clean energy transition, according to a new report by Greenpeace Africa on Wednesday.

- BANELE GININDZA

The report, titled “Africa's Critical Minerals: A Development Lifeline or a New Green Resource Curse?” warns that IFFs have become “increasingly widespread and complex,’ allowing multinational mining companies to avoid paying taxes and depriving African governments of vital revenue.

It estimates that South Africa has lost more than $10 billion (more than R170bn), while Nigeria loses more than $17bn every year through corporate tax evasion and profit shifting in the extractives industry.

Citing the African Union’s African Minerals Development Centre, the report notes that since 1980, about $1.3 trillion has left sub-Saharan Africa through IFFs — 60% of it from the resources sector.

Greenpeace said while the resource curse remains a defining feature of many resource-rich countries, not all are affected to the same degree.

South Africa and Botswana, for instance, have developed policies to mitigate the worst effects, unlike the Democratic Republic of Congo, which has displayed the classic symptoms of the phenomenon.