Financial Transparency Conference Attracts International Attention

Dar es Salaam, Tanzania, September 30, 2013 – The Financial Transparency Coalition (FTC) and Tanzania’s Policy Forum, will host the highly anticipated conference Towards Transparency: Making the Global Financial System Work for Development at the White Sands Hotel on October 1 and 2, 2013. Topics to be discussed include the detrimental effects of illicit financial flows on the extractive industries (oil, gas, timber and mining), conflict and instability, illicit wildlife and arms trade. An expected two hundred guests from over 30 countries will look at how to make the global economy work for rich and poor by increasing financial transparency.

In remarks on the eve of the conference, Policy Forum coordinator Semkae Kilonzo said “of the roughly US$1 trillion that leaves developing countries in illicit financial flows each year, almost half – a staggering US$500 billion – comes out of Africa. These proceeds of crime, corruption, and tax evasion represent an unacceptable drain on developing economies that is equivalent to eight times the size of global foreign aid.”

Tanzania has become a focal point for financial transparency campaigners due to the discovery of natural gas deposits, which many hope will lead to an economic windfall within the next decade. Tanzania is currently one of the poorest countries in the world with an illiteracy rate of about 25% for its adult population, a 58-year ‬life expectancy and ‬access to electricity for just ‬14% of the country’s 48 million inhabitants.

“Tanzanians have the potential to use natural gas income to bring themselves out of poverty, if the resources are managed transparently. But illicit financial flows have the power to thwart this progress” Kilonzo explained.‬

“Illicit financial flows out of developing countries undermine a country’s tax base, and they erode the accountability that is essential for good governance – especially crucial after the discovery of new wealth from extractive industries, as is the case with Tanzania today.”

“Competition between African countries to attract foreign contracts by lowering tax rates is also a serious danger as it results in a race to the bottom. Africans get less for our natural resources and manpower, and our governments have less tax revenue to put toward roads, health clinics, and schools,” Kilonzo added. “It is simply not acceptable that a continent with such an abundance of natural resources should continue to see such a low quality of life for most of its inhabitants.”

Policy Forum and the FTC believe that Tanzania and all of Africa could benefit greatly from some key reforms such as country-by-country reporting of sales, profits and taxes paid by multinational corporations; the automatic cross-border exchange of tax information; and requiring that the true human owner of all corporations and foundations be disclosed in public registries.

“In order for developing countries to reach their full economic potential, the global financial system must be made to work for everyone. We appreciate the foreign aid we receive, but if wealthier countries really want to see a better quality of life for Africans, we must also all agree to make the changes necessary so that the international financial system can benefit us too. A commitment to greater transparency is the first step towards making this a reality,” Kilonzo said.



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