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Forget Comic Relief, Africa needs honest accountants

Forget Comic Relief, Africa needs honest accountants

In light of the recent controversy surrounding David Lammy’s critique of Comic Relief, our attention needs to shift from simplistic charity and focus upon the bigger picture

By James O’Dell

In his account, West African traders in their early 16th century interactions with Europeans, David Olusoga (2016, p. 51) states that ‘these were not people to be swindled, and they were quick to spot any attempt to cheat or defraud them’. Additionally, in 1553 the merchant/pirate (the distinction is often blurred) Thomas Wyndham described these African traders as being ‘very aware on their bargaining, and would not lose one sparkle of gold of any value’. 466 years of being subjected to a myriad of forms of exploitation and violence later however, Africa finds itself in a position where it has lost in excess of $1 trillion in illicit financial flows (IFFs) over the last 50 years. Now, clearly this skips centuries of the transatlantic slave trade, colonial exploitation and post-colonial dependency that explain the shift in power away from the continent, but what it serves to do is highlight how African exploitation is an unnatural state of affairs.

An archetypal case study of this exploitation is in the mineral wealth of the Democratic Republic of Congo (DRC), Africa’s top copper producer and the world’s biggest supplier of cobalt. The figures of capital flight here are stunning, with Global Witness estimating for example, that suspicious mining deals struck with anonymous offshore companies during the 2011 election cycle cost the DRC $1.36 billion in potential revenues. Furthermore, the practice of ‘transfer pricing’, whereby companies set up multiple subsidiaries and trade between them, allows the majority of multinational mining companies (MNCs) operating in the DRC to hide profits and deprive the state of hundreds of millions of dollars. Continuing to prevent the state from establishing a vital tax base.  It is worth noting however that, despite the continued protests of international mining firms, the countries new mining code introduced last year has generated a 91% uptake in mining sector revenues for the government, up to $1.57bn in 2018, and providing a glimmer of hope that change may be on the way.

The clear counter to this wider point of state strengthening, however, is the domestic corruption that is endemic in the country. For instance a separate Global Witness report reveals how $750 million in mining revenues paid by top companies to state bodies was lost to the treasury between 2013 and 2015, with at least some of these being distributed among Kabila’s regime. This being a practice that is unlikely to stop with Tshisekedi’s recent cooptation into this regime via the recent elections. Others have described government ministries as an ‘ATM for the politically deserving’.

This focus on domestic corruption however serves to marginalise focus upon the the international system that sustains it. The role of offshore companies acting as a channel for both MNCs to transfer tax-free profits out of the country and for minerals themselves to be smuggled out, is what Zoë Marriage (2018) refers to as the ‘elephant in the room’ when discussing the DRC. Here the international markets facilitate domestic corruption and ‘exposes a seam of incompatibility and structural conflict between the interests of Congo’s political elites, foreign donors and businesses on one side, and the population on the other, over the control of the economic resources of the country’ (Marriage, 2018, p. 898). The reason this is the ‘elephant in the room’ however, is because it is all perfectly legal, with 60% of the $50 billion (minimum) Africa loses each year being due to aggressive, yet legal, tax avoidance by multinational corporations.

This is neatly summarized by Alex de Waal:‘Two hundred years ago, the slave trade was legal. One hundred years ago, colonial occupation and exploitation were legal. This time the legal immiseration is done by accountants’. Again however, this continuation of legal exploitation of African resources is not the primary focus in discussions of anti-corruption and financial misconduct measures. Instead, the vast majority of public attention and opinion in relation to African development is taken up by events such as bi-annual Comic Relief, which MP David Lammy recently accused of perpetuating ‘tired and unhelpful stereotypes’ of the continent. Indeed, the very nature of our perception of and engagement with Africa is shaped by celebrity endorsed fundraising events, initiated in 1985 by the Live Aid concert, such as Comic Relief, which has shaped British perceptions of Africa, Africa being a homogeneous block rather than 52 independent nations, for over a generation.

Back in 2001, the NGO Voluntary Service Overseas (VSO) released a report examining the legacy of Live Aid and subsequent public fundraising attempts. The results of this were stark, detailing how ‘80% of the British public strongly associate the developing world with doom-laden images of famine disaster and Western aid’. Furthermore, ‘Victims are seen as less human’, Britain’s psychological relationship with Africa creates a ‘false sense of superiority and inferiority’ and defines the relationship between the developed and underdeveloped worlds as that of ‘powerful giver and grateful receiver’.

Importantly, whilst these forces have not receded, they are becoming more widely critiqued, with the public attention and debate surrounding David Lammy’s calling out of the stereotypes Comic Relief et al perpetuate, both in 2017 and 2019, the clearest example of this. Yet the focus of public debate remains stuck on the value of this form of charity, rather than shifting onto the question of why international companies like the MNC’s in Africa are able to continue their legal exploitation of African resources, stripping the continent of far more wealth than what Comic Relief and others bring in.

This therefore represents the overall issue with the way we approach African development within the public sphere. There is pity, maybe a bit of guilt thrown in too, which produces national events like Comic Relief, but there is no anger. There is no public recognition and debate over the extent to which MNCs and other firms cheat African states and African people out of billions of dollars’ worth of resources and tax and the international financial system which facilitates this. We are too caught up in the peanuts Comic Relief spends in these countries, to notice our own corporations having a three-course dinner. Thus, whilst Comic Relief and other INGOs may produce some tangible benefits for communities across the African context, if we really want to see genuine development, we need to forget about these feel-good fundraisers, and address these entirely legal mechanisms of exploitation and return Africa to a point where is loses not one sparkle of gold.

 

By James O’Dell

james@africanstudies.org.uk

National Institute for African Studies

 

Referances:

Marriage, Z. (2018). The elephant in the room: offshore companies, liberalisation and extension of presidential power in DR Congo. Third World Quarterly, 889-905.

Olusoga, D. (2016). Black and British: A Forgotten History .London: Macmillan.

Scott, M. (2009). Marginalized, negative or trivial? Coverage of Africa in the UK press. Media, Culture and Society, 31(4), 533-557.