President Paul Kagame has said that importing goods that are available in Africa should be added to the definition of illicit financial flows.
He made this point while giving his remarks at the African Leadership Forum (ALF) that opened in Kigali this Thursday.
“The definition of “illicit flows” should be expanded to include the habit of importing things, that we already have right here in our countries, and our region. We have to be mindful of the huge financial losses our continent incurs as a result,” Kagame said.
Kagame shared an example where during construction of Rwanda’s Raddison Blu Kigali Convention Centre, he was asked to allow imports of the construction materials in Dubai (UAE).
“60% of what they were proposing from Dubai was available in Rwanda and I cancelled their trip. We sourced the construction materials from here and we built the facility,” Kagame said amidst a round of applause.
President said that the current illicit financial flows, evaded taxes, and commodity extraction greatly exceeds that of foreign aid but this importing what Africa has is missing out a point.
He thus said that Africa has to take responsibility for the misallocation of Africa’s resources and take steps to correct it.
This notion introduced the president’s stand on the African external funding.
“In Africa, we have everything we need, in real terms. Whatever is lacking, we have the means to acquire. And yet, we remain mentally married to the idea that nothing can get moving without external finance,” he said.
“We are even begging for things we already have. That is absolutely a failure of mindset.”
Meanwhile, regarding illicit flows, Kagame said it is not only an issue of technical capabilities, “but much more about building the trust that public funds will be spent on the right things. This is the foundation of good politics that is effective and citizen-focused.”
African reforms, the way to go
President Kagame said that Africa has already some foundations to base on to avoid the illicit use of resources.
Those include the financial reform of the African Union, adopted in 2016 which he said, it shows that Africa has the will and ability to fund common priorities.
“Contributions to the Peace Fund have never been higher, the African Union budget has been reduced, while Member State contributions have become more stable,” Kagame said.
Also important is the African Continental Free Trade Area.
Kagame said, it is set to significantly increase trade within Africa and consequently improve tax collection.
“These are very important developments which show real momentum toward African unity,” Kagame said.
“We gain immeasurably by trading with each other and lose so much when we don’t. Once again, technical explanations are inadequate. These are political problems and mindset issues.”
For Kagame, this trade integration is coming to change a challenging mindset that Africa has been lacking.
“Railways and roads are undeniably important. Yet, even where rail is not an obstacle, we don’t trade. You find citizens sneaking through forests to do business with each other, because the politics is so toxic,” Kagame said.
“These are choices that get made every day, not by our words, but through our actions, that keep too many of our people poor and dependent.
ALF brings together African former presidents and influential figures on the continent to discuss African pertinent matters.
ALF is an initiative of Uongozi Institute that was founded by Benjamin Mkapa, former president of Tanzania.
Besides Mkapa, other former presidents at the forum include Joaquim Chissano and Armando Guebuza- both of Mozambique; Olusegun Obasanjo of Nigeria, Moncef Marzouki of Tunisia; Hassan Sheikh Mohamud of Somalia; and over 100 other distinguished leaders from the public sector, private sector, academia and civil society.
Dr. Mukhisa Kituyi, the Secretary General of the United Nations Conference on Trade and Development (UNCTAD) also sat on the same panel with President Kagame and Hassan Sheikh, former President of Somalia.
The panelists agreed with participants that Africa has to find a formula for its development, otherwise growth will be a mere dream.
“We were able to achieve the decolonization, including apartheid, we achieved that. If we also want to develop, we should move to action,” Obasanjo said.