Friday, 8 August 2014

The Mo Ibrahim effect

Amid the gridlock and diplomatic glad-handing as over 50 high-level African delegations descended on a humid Washington for a week, it looked as if straight talking might lose out. Economics and business, it quickly emerged, was what had brought the delegations to the capital.

However, Mohamed Ibrahim, the Sudanese telecoms pioneer and philanthropist, quickly breached diplomatic politesse on 4 August by asking why it required the presence of 50 African leaders in Washington to convince big American companies that they should be searching for business on the continent, like their Chinese, Indian and Brazilian counterparts.

Looking around with a smile, Mo Ibrahim argued that African leaders spend far too much time attending summits and far too little fixing their own countries. His final demand struck a chord later in the week: that US companies should pay their taxes and royalties in Africa and not set up elaborate schemes to avoid their obligations.

On 6 August, President Barack Obama lamented that too many US companies set up structures that enable them to avoid paying taxes in the USA, let alone in Africa. With some subtle prompting from African and US activists on the growing illicit capital outflow from Africa, more than US$50 billion according to the latest reports, Obama said US officials would be working with a group of African leaders to close many of those loopholes.

And it wasn't long before Washington's political battles disrupted summit proceedings. Although most US Africa policy enjoys bipartisan backing, the Tea Party group in the Republican Party is unpicking that. It is trying to shut down the US Export-Import Bank which guarantees billions of dollars of US trade with Africa. That, some of the departing delegations might say, is a reminder of the perils of democracy.

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