Panama Papers, Illicit flows and Africa’s Health Sector

I had a fair understanding of what the African Union and UN Economic Commission for Africa (AU/ECA) are doing regarding Illicit Financial Flows (IFF) when I attended the AU/ECA High Level Panel Report on IFF and the Civil Society ‘Stop the Bleeding” Africa IFF Campaign on Wednesday, 15^th July 2015 at Radisson BLU Hotel in Addis Ababa. It was a side event during the 3^rd United Nations Finance for Development Conference. The meeting tagged ‘Implementation of the AU/ECA High Level Panel Report on IFF and the Civil Society “Stop the Bleeding” Africa IFF Campaign as a citizen’s response’. The meeting got an opening remarks by H.E. Mr. Thabo Mbeki, Former President of South Africa and Chair of the AUC/ECA High Level Panel on Illicit Financial Flows.

The meeting recognized that “while the present global attention around illicit flows is positive and indeed creates an important hook and rallying point to discuss key issues concerning Africa’s development, especially the domestic resource mobilization component.”

Now, coming back to the present, I was among the people that received via email from UNECA on the 9^th of April the Statement by Thabo Mbeki, Chair of Panel of IFF titled ‘Panama Papers: The AU/UNECA High Level Panel’s Warnings on Tax Evasion, Illicit Financial Flows and Tax Havens are Not Just another Recommendation!’

It made an interesting reading and provide simple information for many readers yet to understand the ‘Panama papers” and their implication to the common man. It says “over the past few days, there has been a furore in the global community regarding reports on “the Panama Papers”, an enormous leak of more than 11 million documents which are said to date back up to four decades and are allegedly connected to a Panama law firm. According to the International Consortium of Investigative Journalists (ICIJ), this firm has, in all that time and possibly longer, helped establish secret shell companies and offshore accounts for the rich and the powerful globally. On an even graver note, data from these documents show that that the firm worked with more than 14,000 banks, law firms, company incorporators and other middlemen to set up companies, foundations and trusts for customers.”

The statement observed further that the Panama Papers elaborately bring to light issues that the African Union (AU) / United Nations Economic Commission for Africa (ECA) High Level Panel (HLP) on Illicit Financial Flows (IFF) from Africa vigorously underscored in the Findings in its Report released and endorsed by African Heads of State and Government in January 2015.

The Thabo Mbeki Statement recommended that;

1. Specific efforts must continue to put political pressure on the countries that enable a high level of financial opacity or that have laws enabling banking secrecy and the registration of shell companies.

2. The global community in all of its institutions, including parliaments must take all necessary steps to eliminate secrecy jurisdictions, introduce transparency in financial transfers and crack down on money laundering.

3. It is rather a time for deep reflection and regret that we have allowed the practice to persist which is made possible among others by the existence of Tax Havens/Financial Secrecy Jurisdictions.

4. Global community to act in a firm and comprehensive manner to end the Illicit Financial Flows and close down the Tax Havens/Financial Secrecy Jurisdictions which serve as the domicile of these Illicit Financial Flows.

How are all these related to Africa’s health sector? The health sector is facing one of the most crucial challenges of dwindling financial resources to address critical issues including emergencies like Ebola, Zika and Lassa fever. The Global Fund for HIV. Tuberculosis and Malaria is calling on African governments to increase domestic finances. The Global Alliance for Vaccines is transiting some African countries from getting free vaccines due to. Many international donors are calling on counterpart funding to finance health sector in Africa. Thus, the need to stop illicit financial flows so that domestic resources could be channel to health sector.

The Embargoed press release that will be shared during the World Bank/IMF Spring Meeting on Friday 15^th April 2016 has quoted the Africa Health Budget Network succinctly “it has been shown that public participation and open budgets can improve the health of its citizens because those budgets will be more influenced by the priorities of the people who use health services every day. We see from the ‘Panama Papers’ that transparency matters because it’s our money. Imagine what $50bn could provide for Africa if it were not going elsewhere through illicit financial flows. African voices are calling for better spending on women and children. Value our health”.

All comments to Dr Aminu Magashi Garba Publisher Health Reporters and Coordinator Africa Health Budget Network  (healthweekly@yahoo.com)