It is very easy for public outcry to occur when personalities such as Guptas, the VBS Bank executives or other personalities in Africa flagrantly steal public assets for their own private pursuits. The pain is felt by the collective as precious funds which could have otherwise been used to contribute to public infrastructure and better services to the broader society, are depleted through bribery, embezzlement and other forms of corruption.

Interesting enough even more money in Africa is lost each year through money laundering and illegal trade. What might be surprising to most people, however, is that the loss of funds from corruption and criminal activities is dwarfed by what African governments lose from tax evasion by national companies and multinational corporations operating on the continent. These types of business sector practices are what the OECD and G20 refer to as Base Erosion and Profit Shifting (BEPS). These highly technical operations facilitated by corporate accountants and lawyers, often termed as “tax optimization”, are not necessarily illegal, but when looked at with a more holistic lens, are clearly unethical and certainly eroding the national tax base.

Whether the culprits are multinational corporations, corrupt politicians or criminal cartels, the bottom line for the national economy is the same: less money to pay for roads, schools, hospitals, and other social services for the broader community.

We live in an increasingly unequal world, and South Africa is among the countries where these extremes of wealth and poverty are most acutely felt. Business moguls of Sandton live only a few kilometers away from extremely destitute families of Alexandria. From time immemorial, one of the best mechanisms that societies have to redistribute wealth, is the system of progressive taxation. But in recent years we have lost the moral authority of this institution of just governance. While the best experts have put their minds together to design fair and appropriate laws and policies, corporates and individuals have lost faith in the system, and justified their efforts to avoid paying taxes in order not to fuel further a wasteful, inefficient and corrupt government. At the end, both the public and private sector is to blame, but both need to play a role in restoring the integrity of our economic redistributive system.

In 2012-2014 the African Union (AU) appointed a High-Level Panel of African political and business leaders, chaired by former President Thabo Mbeki. The AU Panel analyzed the phenomenon of illicit financial flows in Africa and highlighted that the continent was losing double the amount of resources than the official development assistance Africa was receiving from the international community. Since the publishing of the Mbeki Report in 2015 much political endorsement has been provided throughout the continent, but little practical actions on the ground as well as institutional and policy reforms recommended in the report, have been put into place to deal with the problem.

South Africa, as both a victim of this scourge but also as the home of many corporates perpetrating these corrupt practices, needs to take the first step and show leadership for the rest of the continent. On the 19th of January 2021 a new national partnership to curb illicit financial flows will be launched, rallying all stakeholders and the broader public around this cause. It is time to restore the financial integrity our country had post-1994. It is time to stop African national treasuries from bleeding. It is time to recover the precious funds needed to alleviate poverty and inequality in our societies.