INTRODUCTION

At the 24th summit of the African Union (AU) Heads of State and Government held in Addis

Ababa, Ethiopia on January 30-31, 2015, the leaders adopted the final report of the

AU/United Nations Economic Commission for Africa (UNECA) High Level Panel on Illicit

Financial Flows in Africa.

The leaders also adopted a “Special Declaration on Illicit Financial Flows”. On February 1st, a

public launch of the report was carried out by the AU and UNECA in collaboration with Pan-

African CSOs in Addis Ababa.

The adoption of the final report by African governments marks a significant moment in the

global fight against tax avoidance and evasion. Indeed, the decision represents the clearest

statement of political will by African leaders on the corrosive impact of tax avoidance on

African societies and the continent’s resolve to take action to end the haemorrhage of Africa’s

resources.

The consultative and strategy meeting was thus a follow up to engagements initiated

between Pan-CSOs and the UNECA/AU at the 24th African Union summit.

OBJECTIVES

The consultative meeting had three primary objectives. These are:

1. Analysis of the AU IFF report with particular emphasis on the recommendations; 2. Road map for popularising the AU IFF campaign (STOP, TRACK IT and GET IT); 3. Development of the joint AU IFF CSO coalition and UNECA/AU advocacy plan

In terms of format, the consultation was held in plenary and comprised of presentations and discussions on:

1. Analysis of the final report and the recommendations; 2. Civil society define CSO implementation of the of the recommendations and 3. Develop a road map and calendar for joint advocacy between and by UNECA and

the CSO coalition on IFF.

Expected Outcomes

1. developed a draft civil society position and recommendations on IFF in Africa 2. develop a 12 – 18 months joint advocacy and mobilization calendar for CSOs 3. Joint ECA-CSO IFF coalition advocacy plan

Tax Justice Network-Africa’s (TJN-A) chair Michael Otieno opened the meeting by recalling

African Union leaders’ adoption of the Panel’s ground breaking report and why it was

important for CSOs to collaborate with UNECA and other regional bodies to own, popularize

and mobilise the larger African populace, not least, to raise awareness about the report’s

findings and to bring pressure to bear on African countries to implement the

recommendations.

Setting the scene | Savior Mwambwa| TJN-A

This session explored why the AU/UNECA HLP on IFFs in Africa process was set. The Panel

was set up by the African Union but received significant technical support from the UNECA.

The February 2012 establishment of the High Level Panel followed a resolution of the 4th

Joint Annual Meeting of the AU/UNECA Conference of Ministers of Finance, Planning and

Economic Development in Africa in March 2011. At that conference, the finance ministers

agreed to address the debilitating problem of illicit financial outflows from Africa estimated

at about US$50 billion annually by authorising the establishment of the Panel.

The Panel was tasked to undertake:

a. in-depth studies on IFFs in Africa including to determine the nature, pattern, scope

and channels of illicit financial outflows from the continent;

b. sensitize African governments, citizens, policy makers, political leaders and

development partners to the problem; mobilise support for putting in place rules,

regulations and policies to curb illicit financial outflows; and influence national,

regional and international policies and programmes on addressing the problem of

illicit financial outflows from Africa.

c. Identify and streamline specific initiatives that Africa countries could take as

individual nations but also as a region to tackle IFFs.

At each stage, the Panel produced progress reports. The final report is what the leaders

adopted on January 31, 2015

The work of the Panel has officially come to an end but like CSOs, the UNECA wants to see

the work continued hence the desire to strategically collaborate to both raise public

awareness about the report and challenge African countries to implement the

recommendations to curb IFFs from Africa.

Why the report is important|

There is no innovation| Nothing new was found. The figures are pretty much same as

what CSOs have been articulating all these years

But the report is significant because this is a report by African nations.

The report serves as a basis to engage African governments.

Report back on advocacy work carried out by Pan-African CSOs| Tigere Chagutah|

OXFAM

The consortium of Pan-African CSOs had the following as objectives for mobilisation work

carried out in the lead up to and during the summit of African heads of state and government:

Primarily for the adoption of the Panel’s report by African governments;

Set up a mechanism (politically and institutionally) for implementation of the

Panel’s report recommendations at the national, continental and global levels to

curb IFF from Africa

Institution of a broad campaign to push for an international effort against IFF,

which recognises and incorporates the AU HLP’s report findings and

recommendations

Set up mechanisms for implementation of the IFF report recommendations,

ensuring the necessary actions are carried out and monitored at national,

continental and global levels to curb IFF from Africa;

The protection of a role for civil society and citizens in any implementation

mechanisms to follow the publication of the Panel’s report on IFF.

Key activities CSOs undertook|

A joint CSO statement to Heads of State developed in January 2015;

Engaged African Ambassadors and Permanent Representatives in Addis Ababa.

This was facilitated by Oxfam. Requests were sent out to 10 ambassadors namely

Benin, Ethiopia, Guine, Kenya, Mauritania, Nigeria, Senegal, South Africa, Tanzania

and incoming chair. Four countries responded favourably (Benin, Kenya,

Mauritania (Permanent Reps Chair) and Nigeria). Three meetings were however

held after Banin cancelled. The meeting with the Nigerian ambassador was

interesting as his team came across as very engaged. They allso come out strongly

in support of CSO positions. They seem to have a willingness to champion the

whole issue of IFF in Africa.

High-level CSO-led event: The initial programme was reformatted after

discussions with UNECA in favour of CSO consultation and movement building

event plus representation of the coalition at High Level launch of the IFF report

on February 1, 2015 which was chaired my President Mbeki. Speakers included

members of the HLP Panel and UNECA. Savior Mwambwa of TJN-A represented

CSOs at the official public launch of the report.

At the CSO consultation, there were approximately 25 participants. The

consultation took the form of updates on the HLP’s process, report on advocacy,

update on CSO tax and IFF campaign. Participants also identified key moments

and opportunities for joint advocacy in 2015.

Media engagement took place throughout the summit. It took the form of a press

statement which was reproduced and distributed widely and interviews with a

wide variety of media outlets including Aljazeera, Africa Report and Channel

Africa. The press release was also share on Facebook, Twitter and other social

media.

Outcomes|

The HLP’s report was adopted and a special declaration passed which called for actions that

are consistent with key demands made by Pan-African CSOs. Key victories for the coalition

were:

Request by Heads of State for the AU Commission, AfDB and the RECs to follow up on

implementation of the report’s recommendations, and report progress annually to

the Assembly;

Call for the international community to adopt and implement the findings and

recommendations of the HLP Report

Request by Heads of State for the continued engagement of HE Thabo Mbeki and

Panel members in advocacy efforts to mobilise multi-stakeholder support, including

work with civil society, for implementation of report recommendations, and

The need for the issue of IFF and their impact on domestic resource mobilisation to

form part of the agenda for the 3rd Conference on Financing for Development (FfD) to

be held in July this year in Ethiopia.

Lessons drawn from the engagement include the need to start preparation and engagement

early; involve wider group with committed human and other resources; need for bigger,

coordinated and multi-skilled team on the ground; and invest more time and resources in

broader consultation to build a groundswell of support base.

SESSION II| chaired by Joel Odigie| ITUC-Africa|

Session II of the first day focused on a presentation of the key recommendations of the HLP’s

report followed by discussions by all participants. Luckystar Miyandanzi of EATGN and Nora

Honkaniemi of Actionaid Kenya jointly presented the summary.

Plenary discussion of the report|

The report over plays the role of institution engineering in African countries. There is

an over emphasis on administrative issues;

The report barely touched structural issues and yet these lie at the core of the issue

of IFFs.

The report states that in the extractive sector, African ownership is small and

shrinking;

The remit of MNCs has widened and it is deepening;

That notion of where you should tax where the economic activity takes place is

outdated;

The problem is not administrative, it is structural;

The greatest outflow of resources has coincided with the time that unprecedented

resources have flowed to Africa;

[The report tackles two key sectors of the African economy:

o Natural resources and the other is

o Financial sector

Problematisation of the IFF in the report is limited; the conceptual framing is narrow.

Nothing stops the group/CSOs to develop a paper that re-conceptualizes the

debate/report.

Difficulty with recommendation that AU countries should participate a lot more in the

OECD process. It may be more useful for AU countries to rather engage the BRICS etc.

OCED is not accountable to African governments; they are accountable to their

members.

The analysis of the report is richer than the report’s recommendations;

The HLP did not deliver on their entire manage, for example how to raise resources

etc;

How the report is written is political. They do not mention names;

Recommendation not in the report: There is no component on “GET IT”. Yet the

Slogan of the report is: Track it| Stop it and| Get it

Some expressed disappointment with the report: no thinking outside the box.

Nothing new

They’re not “tax incentives”, they’re rather “tax subsidies”.

Two opportunities:

- Identify champions and

- Engage African governments. The latest World Bank report on GDP classifies

Malawi as the poorest country and yet in the HLP report, the country lost US$2.2

billion;

Need to push for the tax agenda to be in every policy;

There has been a restructuring of the relationship between MNCs and African

countries;

“Producer misery and brand worth”

There are good sides to the report BUT concerns remain on the following two areas:

- On the recommendations of the report

- On the process

At the national level, there’re groups ready to debate the issue of IFFs;

The report is too diplomatic but that was what the Panel was set up to do;

What you have in the report is partial insight. In terms of the totality, the reality could

be distorted.

The sources of value extraction from foreign MNCs has expanded in the last several

years.

Contest of big picture versus small picture (details). Long-term and short-term.

Need to share a common overarching goal, so the group does not get comfortable with

the short term elements.

SESSION III| chaired by Gyekye Tanoh| TWN-Africa

This session discussed and developed elements of to shape the CSO-UNECA IFF joint

engagement plan (in Africa and beyond). The session pulled together elements to deepen the

African process. The discussions revolved around three broad areas: Process, themes

(content) and infrastructure (methods).

Specific ideas for the joint CSO-UNECA meeting on February 19th

PROCESS:

1. Pan-African driven process – situated in global institutional landscape

CSOs-UNECA interface and communication to be led by TJN-A

2. Longer term consultations and institution building with African bodies

Institutionalised involvement and participation of African civil society within

UNECA and AU processes;

Need to conceptualise, discuss and agree movements towards an institutional

arrangement for pooling African expertise to serve as think-tank on IFF along the

lines of the International Study Group (ISG);

3. RECs – How do we engage with RECS and others at sub-regional level

4. National level engagement?

CONTENT:

Deepen analysis and recommendations in HLP report:

(Strengthen what is already included) e.g; “Get it” and re-articulate conceptual

definition of IFF to reflect changes in global financial and trading system vis- a vis

MNCs

Add what is left out in the Report, e.g financialisation of African economies, and

specific sectorial issues such as the international financial architecture

Others

(1) Strategies for targets e.g. MNCs

(2) Social service provision and implications of IFF

(3) Constituency building

(4) Monitoring and evaluation of the progress of implementation of the

recommendations of the report. CSOs need to be involved in the M&E report/progress

reports. So it is not just governments coming out with the reports.

To ask UNECA:

How does UNECA see the role of CSOs in getting C-10 to do its work in promoting the African

position in the FfD process especially the groups’ goal for the FfD March 2015 meeting.?

Part II of SESSION III chaired by Fanwell Bokosi| AFRODAD

The session explored how to operationalize CSO engagement, identified entry points with

regards to the HLP’s report including mapping of key opportunities and moment for joint

CSO collaboration.

Mapping of African advocacy and mobilisation moments and opportunities|

No Event topic Venue Dates Focal point organisation

1. Africa Finance ministers conference

Addis Ababa, Ethiopia

March, 2015 Oxfam liaison at AU. /TJN-A

AA

2. World Economic Forum South Africa June, 2015 South African CSOs

3. Alternative mining indaba Cape town, South Africa

9 - 12 February, 2015

FBOs in South Africa

4 Pan Africa MPs network on IFF convening

Malawi March -15 TJN-A/MEJN

5 WTO Ministerial conference Nairobi, Kenya 15th-18th December, 2015

TJNA and KHRC

6 AU June summit South Africa June, 2015 TJN-A/

7 World Social Forum Tunis, Tunisia 23-28 March 2015 Our World is not for sale Network (OWINFS)/GATJ

AA/Kendren/TJN-A

8 World Bank/IMF Spring Meetings Washington DC April

9 International Women Days March ITUC

10 Labor Day May

11 international public service day 23rd June

12 Africa Industrialisation day November

13 International human rights day

14 EAC Summit Nairobi, Kenya 20th February EATUC/EATGN

15 SADC Summit Gaberone August AA/TJN-A/ITUC AA

16 International Anti Corruption conference

Malaysia 2 to 4th September

TI

17 World Day for decent work 7th October ITUC

18 Central Bank governors meeting Addis Ababa, Ethiopia

March, 2015

19 ADB Annual meeting

20 Financing the Future Accra, Ghana 17-18 March

21 International Anti-Corruption Day 9th December

22 PRC- AU Addis April AA/TJN-A AA

23 Convening on IFF strategy paper March TWN-A/TJN-A/AFRODAD

24 Pan African Trade union conference

Kigali October ITUC

SID= Tax & inequality

Case studies in East Africa

2nd conference on inequalities, 2016

Transparency International

African regional meeting , Kenya-

CPI- On anti-corruption day

Action Aid

TWN-Africa

Strategy position on AU/UNECA role

Activate process of mobilisation of national level/alternative thinking

deepen coherence among the IFF initiative and other African agenda/interim steering set up

produce strateg paper on IFF (conceptualisation, app)

Papers on restructuring global value chains

role of financial sector in Africa vis a vis IFF

FfD process.

post 2015

PALU

study on legislation affecting IFF in Africa -June/July

ZTP

WSF

SADC

AU summit

ITUC-Africa

CAADP

AMV

Econews - Africa

Mapping of PIDA infrastructure ( PPP, Inv.

DAY TWO OF CONSULTATIONS

Opening session of Day 2 and chaired by Tigere Chagutah included three representatives

from the UNECA in attendance, namely Adeyinka Adeyemi, Adeyemi Dipeolu and Edmond

Johnson.

Context| Savior Mwambwa

The joint CSO-UNECA consultation and strategy meeting was a follow up to the

adoption of the Mbeki Panel report;

The focus of the meeting was not on the report itself but how CSOs and UNECA could

collectively create public awareness and push for implementation of the

recommendations contained therein

The UNECA has developed not blueprint by way of an advocacy plan.

Brief overview of the HLP’s work and findings| Adeyinka Adeyemi | UNECA

One of the underpinning elements of the work of the Panel was “consultations” in

other to get to the root of the problem

The tone of the report is calling/urging all stakeholders to work together

General consensus that this report should not be another book on the shelves: Want

an active engagement of all stakeholders

AU leaders have tasked President Mbeki to continue the advocacy work.

What are the key aspects of the report and what the adoption of the report

means: -

The adoption of this report and what it means

The first thing that struck the Panel when they started their work was to ask the

UNECA to conduct a study;

Getting to the nitty-gritty was very technical. What struck the Panel most was that IFF

was a political issue. Ultimately, it depends on political will. It requires mobilisation.

The Panel also found that at the end of the day the problem is due to lack of

transparency. Either through information exchange; laws to get people/owners to

register ownership for example in the course of doing the work, the Panel found out

that the commercial route of illicit flows was the biggest. The report was more

focused on the commercial side and that was not to belittle the corruption element.

Besides there is a UN and AU conventions on corruption. The Panel therefore wanted

to emphasis the point that the one area that needs to be emphasized is the commercial

end of illicit flows given also that not a lot of work has been done in this area.

Another thing the Panel noticed was the issue of over dependence on natural

resources and that makes African countries extremely vulnerable to IFFs. The point

is not ownership or even use of natural resources. The point is that the natural

resources are been extracted without the countries knowing exactly what were been

extracted. Nearly all African countries depend on “self-declaration”.

Linked to the above is poorly negotiated contracts

Also of concern to the Panel was that with the rise of digital economy, there was the

tendency for more illicit flows and a growing use of services e.g. through loans

between the same companies to transfer resources out of Africa.

The Panel also felt that there is tendency for Africa to inadvertently promote IFFs

Financial secrecy jurisdictions | helping people to hide resources generated.

Another observation by the Panel was the issue of Asset Recovery

The issue of capacities arose. Not only the ability to have institutions but also the

people who are well paid to manage them. Capacity in the sense of running the

system. The capacity to measure and how to measure. A notable was the case of

timber in Liberia where the tagging enabled the country to rake in a lot more revenue

than before

Again there is no global architecture on IFFs. UN Tax Committee and OECD. There are

fragmented approaches and also gold standards are being set around the table that

excludes Africa.

The Panel also found that when powerful countries have an interest in an issue

something gets done like money laundering and terrorism;

Finally, the Panel pushed for the issue to be brought to the United Nations.

Adoption itself:

President Mbeki presented the report at a closed session. It was well received and

African heads of state subsequently passed a special declaration.

The Permanent Representatives forwarded it to the Heads of State for adoption

Summarized the declaration by African leaders. (See appendix).

After a summary presentation of Day One which is essentially captured under the first part

of SESSION THREE above (on process| content| infrastructure) a discussion ensured.

DISCUSSIONS (CSO observations)

The report is an important reference point;

However the report does not go far enough. It could be deepened.

The report is very political and diplomatic. Structural issues are not fundamentally

tackled.

The findings are fine but the recommendations did not capture all the findings;

Issues of procedure: how to engage. There is no global architecture at the moment to

tackle IFFs;

How to use the report to improve

Questions arose about the process – status of the Panel. How it been disbanded or

reconstituted.

The role of banks and offshore companies

RESPONSE by UNECA officials

One reason for engaging CSOs is particularly because of “Alternative Thinking”;

There is no agreement on national implementation. In working together, we can

tackle these issues. - Reference to tackling the IFF issue through the APRM.

PROCESS issues: UNECA does not want the engagement to be one-off either. Issues

tend to bring people together rather than process

CONCEPTUAL issues: It is true that the report did not some issues were not

captured)all the issues. Choices had to be made. The Panel had representation from

all stakeholders with the notable exception of governments.

STRUCTURAL issues: the Panel had to find/establish a balance and that is why they

want the Panel’s work to continue into the future;

The recommendations were tricky because the Panel did not want a wooly

recommendation and that was why they wanted to be specific and concrete as

possible in the recommendations. The Panel did not think it was right to be generalist

in their recommendations.

STATUS of the Panel: the Panel does not exist a Panel anymore. The UNECA finance

ministers declaration last year tasked President Mbeki and the Panel members to

continue their work in their individual capacities.

The report may have emerged out of a political process but it is not a political

document. It is a very bold document. “Track it, Stop it & Get it”.

Bickering about what is and what is not in the report could be destructive

DISCUSSIONS PART II

Summary comments and questions by CSO participants:

Why the report recommends the use of institutions and groups that we as Africans do

not belong to or have a right to and an example is the OECD?

Is it possible to consider country case studies to anchor country–specific advocacy?

How do we connect this IFF as an issue with other significant issues going on around

Africa.

The report is a huge game changer. IFF has to do with the global architecture of doing

business. How Africa and Asia are inserted and how MNCs have gone ahead to re-craft

the global rules/norms.

The equation of IFFs to corruption is misplaced.

RESPONSES by UNECA

Why OECD, IMF etc are in the report: There is a global structure/process and Africa

cannot afford to be absent. If you’re not at the table, you might be the meal.

In terms of country-specific case studies, the Panel did not have the time to do all that.

Mild as the report is, UNECA is already facing some political pressure.

UNECA currently drawing a programme on “Conflict and Development” and the role of

IFFs.

SESSION II of DAY II|

Objective: To Identified and agree on specific proposals for be undertaken by CSOs and

UNECA aimed at promoting the implementation of the HLP report Recommendations.

The meeting identified three (3) areas for joint CSO-UNECA action as follows; 1.)

Advocacy/Consultation issues, 2. Infrastructure/Capacity building, 3.) Analytical

work/studies, 4.) Monitoring/progress reporting

1. ADVOCACY/CONSULTATIONS

There will be a structured interface and communication between civil society

organizations (CSOs) and UNECA with TJN-A as a focal point/organization.

Use ISG approach in the interim,- Institutionalize the deepening of policy

work/Multidisciplinary institutions

Advocacy process aimed at supporting specific AU institution to spearhead IFF

(supported by ECA) (push this through e.g political & social affairs commission/Labor&

social affairs commission, Nigeria ready to champion)(involve ECOSOC)/ AU wide

policy(AMV type)/Legal instrument on IFF to lead to Landing institution

Link Agenda 2063 with IFF and articulate institutional mechanisms or set up

including at RECs

Bring on board voices of ordinary people and broaden outreach beyond governance

sectors, and devise ways of how to bring in movements outside through mass

mobilization. Take the report down to the people!

The above should be supported through;

Popularization of HLP report and IFF issues(Popular version of the

HLP/documentary)

Petitions/Campaign

Response to inquiries ( communication)

Collaborate on contribution to the debate(policy dimension)

Media strategy

Outreach to RECs

Use commemorative days ( see mapping of moments)

Link with other sectors (e.g childrights, Gender)

Reach out to Western goverments

Engage private sector (SMEs) and volunteer initiatives

Advocacy to MNCs

Consider legal routes( e.g PALU is mapping legal instruments on the continent related

to tackling IFFs)

Link with AMV-how do we connect

Outreach to OECD in terms of regulation

Influence school curiculum

Identifying champions (inside and outside), which countries? On the continent

including TAs. (Panel members?)

2. INFRASTRUCTURE/CAPACITY DEVELOPMENT/BUILDING

Consider issues and address institutional issues regarding relationship between

UNECA and AU, joint Secretariat Office- UNECA/AU/ADB

Undertake consultations and mapping to identifying challenges within African

governments in implementing HLP recommendations( at National Level, UNECA

consultative process)

Work with other African inst. E.g of ATAF, Pan African parliament,

3. ANALYTICAL WORK/STUDIES

Data generation (UNECA/CSO- mapping of IFF studies exits, what are the gaps in the

existing studies?)

Shared analysis

Break down recommendations according to (Commercial ,Criminal, Corruption)

group recommendations according to type and identify targets.

What analysis are we missing?: Specific country cases on concrete things. Investigate

case studies in report further.

Analytical model/Mechanisms for tracking?

Connect IFF with others

Studies in other sectors other than Extractives

Further regional analysis on other taxes e.g Robin Hood Tax, Financial transaction

tax

Big 4 accounting firms , ( advocacy, analysis)

BIS- role of the financial sector

Create/utilize central portal that include– HLP website as well as existing network

media and information sharing lists ( Afritax)

4. MONITORING/PROGRESS REPORTING

Measure and quantify impact of measures to plug IFF

Steps for tracking, stopping , getting

( Framework for monitoring with political support)

By the June AU summit , come up with practical proposals for monitoring IFF

measures ( indicators)

CSO Targets for SDGs,? TJN-A will share

Isolate specific country case studies on dividends of

Check list of what ought to be in place to stop IFF ( must be tailored to specific

contexts- not one size fits)

Expert group meetings to review reports

Conclusion

It was resolved that a draft action plan with timelines will be jointly drafted with UNECA to

operationalize the above suggested ideas.

Concluding remarks

Adeyinka Adeyemi on behalf of the UNECA thanked all participations and their

organizations and pledged their individual and the UNECA’s institutional support.

Tigere on behalf of CSOs also thanked the UNECA for its role in preparing the report

and their commitment to involve non-state actors and the larger African populace to

root out IFFs from Africa.