Europe must do more to help Africa shed its resource curse

Helping Africa does not just involve donating money; it also involves stopping the flight of African states’ money into private accounts.

The UN’s Millennium Development Goals (MDGs) were born amid high hopes in September 2000. Ten years on, the parents fear their brainchild will not live up to expectations, including the halving of poverty by 2015. 

For this anxiety, Europe holds some responsibility, because many EU countries have failed to deliver on their pledges. The European Commission has estimated that its member states still need to find €12 billion to reach their target of spending 0.56% GNI on development assistance in 2010.

As states have habitually failed to stump up themselves, attention is also turning to alternative ways of raising money. Among them is the hotly debated possibility of states raising the money by taxing bank transactions.

But one option – not a substitute, but a vital supplement – receives far too little attention. That option is to halt the disappearance of trillions of dollars (and, now, euros) from public coffers in Africa into private accounts in Europe and elsewhere.

Much of this capital flight is part of what Africans call our ‘resource curse’, the failure to translate mineral wealth into prosperity.

Global Financial Integrity, a research group, has estimated that, on average, fuel-exporting countries in Africa have lost capital at the rate of nearly €8bn each year, far outstripping the €2bn lost by exporters of other commodities each year. This money is pocketed by transnational companies, many of which are European, and their local contact persons in government or in business.

Europe is involved in the problem; it can help in the solution. The EU’s member states can change banking rules that enable African leaders and officials to send state money into unnumbered private bank accounts. They can make sure that big European companies are transparent about the details of the contracts they seal, about the amount of money they give out and about the amount they earn in each of the countries in which they operate. Such information would allow countries’ tax authorities and citizens to hold companies and governments accountable for the money earned on their natural resources.

The EU has recently made statements committing itself to supporting the efforts made by developing countries to plug these leaks. I welcome these statements. But Europe can also take unilateral steps. It does not need to wait for African governments. The vested interests in Africa are substantial. On three occasions, attempts have been made on my life for my efforts to ensure that my country, Congo-Brazzaville, is more transparent about its dealing with foreign oil companies and in defending the human rights of my brothers and sisters. Bullets can kill, but the inactivity of a force as powerful as the EU can do as much – or more – to preserve the resource curse.

The debate about banking secrecy has lasted decades, suggesting to campaigners like myself that European governments are unwilling to weaken vested interests in order to help Africa. But as they discuss the MDGs in New York and consider their contributions, European governments should remember the scale of capital flight – Africa loses more than €1 trillion every year in lost or unclaimed tax revenue – and realise that the more they and other countries do to plug leakages, the less support Africa will need.

Centuries ago, the entreaty to ‘love thy neighbour as thyself’ extended community borders to include all human beings. It is the ancient root of modern ideas of global solidarity, such as universal human rights. Ending banking secrecy and reducing the power of the resource curse should be part of Europe’s solidarity with Africa.

Roderick Parkes is the head of the Brussels office of the German Institute for International and Security Affairs.Louis Portella-Mbuyu is a Roman Catholic bishop from Congo-Brazzaville. He is currently visiting Brussels with a delegation of African bishops and development experts organised by the international alliance of Catholic development agencies CIDSE.

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