BY Mayowa Tijani
It has been believed for decades that developing countries get a lot in aid from the generous developed world. But the developed world gets more money from developing nations than it gives.
This reverse in aid was revealed by a study by US-based Global Financial Integrity (GFI) and the Centre for Applied Research at the Norwegian School of Economics.
According to the study, “since 1980, developing countries lost US$16.3 trillion through broad leakages in the balance of payments, trade misinvoicing, and recorded financial transfers”.
In 2012, the last year of recorded data, developing countries received a total of $1.3 trillion, including all aid, investment, and income from abroad. But that same year, some $3.3tn flowed out of them back to the developed world.
This means that the gainers in this equation was the developed world, which made $2 trillion “in profit” for offering $1.3 trillion to the developing world.
Between 1980 and 2012, developing countries paid as much as $4.2 trillion in interest of “generous” loans rendered by the developed world. This is more than all the aid these struggling countries received within the same period.
According to GFI, developing countries have lost a total of $13.4tn through unrecorded capital flight since 1980, to the developed world.
Quoting the GFI report, the UK Guardian said same-invoice faking is estimated to cost developing countries $700bn per year.And these figures only cover theft through trade in goods.
Adding theft through trade in services to the mix, the first world milks Africa and the rest of the developing world of a total net resource outflows to about $3 trillion per year.
That’s 24 times more than the aid budget. In other words, for every $1 of aid that developing countries receive, they lose $24 in net outflows.
The report concludes that Africa is not in need of aid, rather Africa and the entire third world is in need of justice!
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