OPINION:
Earlier this April, I participated in Equity for Africa Summit at Liberty University, which brought together African presidents, vice presidents, governors, a former U.S. secretary of State, current and former U.S. lawmakers, CEOs, and African and American religious leaders.
The summit emphasized the need for a more just, fair and inclusive global economic governance structure. What started as an effort to build a faith-based global coalition grew into a call challenging the global economic power architecture that has marginalized Africa.
Africa’s voicelessness is evident in its underrepresentation in the Group of Twenty (G-20) nations. The G-20 is a partnership that functions as the world’s premier deliberative body on matters of global economic governance and seeks to unite world leaders around shared economic challenges.
While Africa accounts for 16 percent of the world population, it has only one seat (South Africa) on the G-20. With a GDP per capita of $13,000, South Africa does not represent the economic realities of the rest of Sub-Saharan Africa, whose average GDP per capita is $4,000.
Poor African countries are literally shut out of the global economic governance infrastructure.
Africa is also underrepresented in other global forums. For example, the B-20 is a forum for businesses in the G-20 member countries to influence policy makers in shaping the global economy. The C-20 provides a bridge between leaders of the global economy and civil societies in the G-20 sphere. Africa is even marginalized in the G-20’s interfaith platform that allows members of the faith community access to global economic policy makers.
Even African prayers are kept outside of the global corridors of power.
While the G-20 represents economies accounting for 85% of the global economy, the World Bank represents all national economies, including the 48 Sub-Saharan African countries. Africa fares no better there.
Sub-Saharan Africa accounts for 25% of World Bank’s member countries. However, it has only 5.4% of the voting rights on the World Bank Board. Ethiopia, one of the 23 founding members of the World Bank, with the population of more than 110 million people and a GDP of $260 billion, has just 1% of the board’s voting rights.
That is less than that of Jordan with a population of 10 million and GDP of $106 billion.
Ethiopia should have more voice in the World Bank Board than Jordan as it is more affected by the World Bank policies. Though both Ethiopia and Jordan are international aid recipient nations, the World Bank has far more projects in Ethiopia than in Jordan both with respect to number of projects and volume of funds committed.
Similarly, Nigeria with a population of 201 million and GDP of over $1 trillion has about half of the voting rights of Switzerland with the population of 8.6 million and GDP of $620 billion.
Africa’s virtual exclusion from global economic decision-making architecture has made it a victim of the global financial system without the ability to protect its struggling economies from unfair and criminal international business practices.
For example, in September 2020, a report by the U.N. Conference on Trade and Development revealed Africa loses about $88.6 billion in illicit capital flight every year. To put this figure in perspective, it is about twice the amount Africa receives from official development assistance in international aid.
The money is taken from Africa illicitly through multinational corporations and international banks under the rubric of international business. In 2018, the World Customs Organization reported money is laundered through “commercial tax evasion and mis-invoicing.” Mis-invoicing involves deliberately misrepresenting the value, quantity, or nature of goods and services traded across national borders.
A 2020 report by the Brookings Institution took note that over the past decade, “there has been an increase in illicit outflows of capital toward emerging and developing economies (e.g., China) as trade between Africa and these countries has increased.”
Stopping this requires action from the global economic governance architecture. The global financial institutions which have been able to forge a successful global strategy to deny terrorist groups the ability to mobilize and move a much smaller volume of illicit funds should surely be able to rein in illicit fund transfers out of Africa.
The fight is, of course, larger than just the illicit outflow of funds from the African continent.
As former Congressman Dave Brat rightly said at the summit: “ … trust and friendships built on shared values and principles will ensure that ending the illegal outflow of funds is not the end.” Indeed, the challenge of stopping the illegal fund transfers out of Africa and promoting pro-Africa global economic policies are intertwined.
The summit planted the seeds necessary to build a global moral voice supporting the inclusion of African countries in those international organizations that are material to its future. Liberty University has emerged as the center of a moral voice for continental Africa. Most of the attendees of the summit have faith, as I do, that Liberty will live up to the virtuous challenge.
• Yonas Biru was the deputy global manager at the International Comparison Program at the World Bank. Currently, he is an interim chair of the National Economic Advisory Council for the prime minister of Ethiopia.
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