Nigeria and other African Ministers of Finance at the just concluded IMF/World Bank Group Meetings have urged the multilateral Institutions to help Africa put a stop to the over $50 billion that leaves the continent annually.
1000 Naira notes Briefing newsmen at the end of the Meetings yesterday, Nigeria Minister of Finance Dr Okonjo_Iweala said A We, the Group of African Finance Ministers, requested that the Bank and the Fund should look into the issue of illicit financial outflows from the continent.
She also said that Nigeria's new GDP elicited a lot of interest among participants and even some private sector operators who were coming to say they are interested in investing and one of them, Blumberg Green, has already sent a team to Nigeria that are working with the minister of Agriculture to make Nigeria the hub for grain and cold storage.
She said We have persisted in this demand and Africa Finance Ministers are saying based on a finding of a panel chaired by former South Africa President Thambo Mbeki that about $50 billion a year is disappearing from the continent, we asked the World Bank and the IMF to talk to the receiving countries, assist through capacity building and information flow in arresting the ugly development.
A How is the money going, it goes through, those companies that should be paying taxes and are finding good ways to avoid taxes, something called transfer pricing, their profits are exported to jurisdiction where they pay less tax and we can not tax them.
Pricing; over invoicing and under invoicing of goods and services that they bring into our countries and proceeds of corruption of officials in the continent especially as it relates to natural resources.
Almost every country in the continent has one has mining or the other and the contracts are not favourable to us.
The World Bank and IMF will help in two ways, one is capacity building, you need specialised skills to be able to deal with transfer pricing, over invoicing, and missed pricing.
They will also help through information sharing. Developed countries now have automatic tax information exchange, they get tax information automatically on request, for people operating within their jurisdiction.
Developing countries are not included at the moment in the information exchange program. We are asking that developing countries be included so that we can also get this information. And they should also help us with their authorities to repatriate any illicit financial flow into their countries.@ She said.
Explaining further the acting CBN Governor Mrs Sara Alade said A When companies do transfer pricing, it means that when they import, they import at a higher price than they should have and when they are sending the money back, they send back more than they should have sent.
So, it is across the continent, it is not only peculiar to Nigeria. This applies to different sectors of the economy and it has to do with over‑invoicing and tax evasion.
So, the $50billion identified is for the entire African continent. What we have requested for is the World Bank=s cooperation in stopping it and our own capacity too to stop it when we know what is happening.
Dr. Okonjo‑Iweala said AThe fact the Nigeria now has a better measurement of its GDP, and the base is stronger was well received, it elicited a lot of interest among participants and even some private sector operators who were coming to say they are interested in investing and one of the is BLUMBERG Green, they have already sent a team to Nigeria that are working with the minister of Agriculture to make Nigeria the hub for grain and cold storage.
They want to invest $250million. They were looking around countries in Africa to see where they could set up the hub.