Tax avoidance, secret mining deals and financial transfers are 
depriving Africa of the benefits of its resources boom, ex-UN chief 
Kofi Annan has said.

Firms that shift profits to lower tax jurisdictions cost Africa $38bn 
(£25bn) a year, says a report produced by a panel he heads.

"Africa loses twice as much money through these loopholes as it gets 
from donors," Mr Annan told the BBC.

It was like taking food off the tables of the poor, he said.


Under-pricing deprives Africa of much-needed money, the report says
The Africa Progress Report is released every May - produced by a panel 
of 10 prominent figures, including former Nigerian President Olusegun 
Obasanjo and Graca Machel, the wife of South African ex-President 
Nelson Mandela.

'Highly opaque'

African countries needed to improve governance and the world's richest 
nations should help introduce global rules on transparency and 
taxation, Mr Annan said.

The report gave the Democratic Republic of Congo as an example, where 
between 2010 and 2012 five under-priced mining concessions were sold in 
"highly opaque and secretive deals".

This cost the country, which the charity Save the Children said earlier 
this week was the world's worst place to be a mother, $1.3bn in 
revenues.

This figure was equivalent to double DR Congo's health and education 
budgets combined, the report said.

DR Congo's mining minister disputed the findings, saying the country 
had "lost nothing".

"These assets were ceded in total transparency," Martin Kabwelulu told 
Reuters news agency.

The report added that many mineral-rich countries needed "urgently to 
review the design of their tax regimes", which were designed to attract 
foreign investment when commodity prices were low.

It quotes a review in Zambia which found that between 2005 and 2009, 
500,000 copper mine workers were paying a higher rate of tax than major 
multinational mining firms.

Africa loses more through what it calls "illicit outflows" than it gets 
in aid and foreign direct investment, it explains.

"We are not getting the revenues we deserve often because of either 
corrupt practices, transfer pricing, tax evasion and all sorts of 
activities that deprive us of our due," Mr Annan told the BBC's Newsday 
programme.

"Transparency is a powerful tool," he said, adding that the report was 
urging African leaders to put "accountability centre stage".

Mr Annan said African governments needed to insist that local companies 
became involved in mining deals and manage them in "such a way that it 
also creates employment".

"This Africa cannot do alone. The tax evasion, avoidance, secret bank 
accounts are problems for the world… so we all need to work together 
particularly the G8, as they meet next month, to work to ensure we have 
a multilateral solution to this crisis," he said.

For richer nations "if a company avoids tax or transfers the money to 
offshore account what they lose is revenues", Mr Annan said.

"Here on our continent, it affects the life of women and children - in 
effect in some situations it is like taking food off the table for the 
poor."

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