Worldwide, developing countries lose more than a trillion dollars every year through capital flight and tax evasion. Africa alone loses roughly 90 billion dollars annually, according to UNCTAD, which is far more than the so-called aid it receives. Most of this wealth flows into major Western nations such as the United States and the United Kingdom, strengthening their currencies while weakening those of developing countries.
For decades, Africa has been portrayed as a debtor to the world. The data tells a different story. Between 1970 and 2008, illicit financial outflows from 33 Sub-Saharan African countries totalled 944 billion dollars, while their combined external debt in 2008 stood at only 177 billion dollars. The conclusion is clear: Africa is not a debtor. In reality, it has been a net donor to the West. Our wealth leaves, and nothing equivalent returns.
This is why the narrative of aid is misleading. Africa receives about 50 billion dollars in aid each year, but loses 90 billion dollars in illicit outflows. This means the continent suffers a net loss of 40 billion dollars annually. The real question is not 'Why is the West helping Africa?' but rather 'How much is Africa helping the West?'
For years, developing nations, including Ecuador and several African countries, have pushed for a stronger UN global tax body with the authority to regulate cross-border taxation. Every attempt has been blocked by powerful countries such as the United States and the United Kingdom. They resist reforms that would bring transparency to international financial flows because the current system benefits them.
African elites are also part of the problem. Many exploit offshore jurisdictions for personal gain. These jurisdictions, many of which are British territories, provide secrecy, anonymity, and protection. They make it easy for corrupt leaders to hide stolen wealth abroad rather than invest it in their own countries. The architecture of global finance, therefore, rewards corruption and punishes development.
Africa's challenges extend beyond illicit capital flight. The continent remains trapped in a colonial-era economic model in which it exports raw materials and imports finished goods. Africa produces cocoa, yet Europe produces the wealth of chocolate. Belgium, a country with no cocoa trees, is a major global chocolate producer. Gold mined in Africa is refined and priced abroad. Africa extracts diamonds, but the value is added in Europe. The DRC provides cobalt for the world's batteries, yet the real profits emerge after it leaves African soil.
A similar pattern applies to oil. Africa exports crude oil and then imports refined fuel at higher prices. This dependency deprives the continent of the value that rightfully belongs to it.
Natural resources such as oil in Gabon, copper in Zambia, gold in Mali and Mozambique, and diamonds and coltan in the DRC have not created strong nations. Instead, they have enriched multinational corporations, foreign shareholders, and local elites who operate within a global financial system designed for extraction rather than empowerment.
The core system that keeps Africa poor is rooted in offshore jurisdictions and the secrecy they provide. These networks create fertile ground for corruption, capital flight, and tax avoidance by multinational companies. They drain the resources needed to build strong institutions, functional states, and competitive economies.
This is why progress remains difficult. The incentives that drive individuals toward illicit financial flows are stronger than the mechanisms designed to build effective and accountable governments capable of delivering development. The result is a continent rich in resources yet denied the full value of its wealth.
Africa is not behind because it lacks potential. It is behind because its wealth is continually extracted, hidden, and exploited through a global system engineered to keep it that way.
Until Africa captures value from its own resources, processes what it produces, strengthens its tax systems, dismantles offshore secrecy, and takes control of its capital, the question President Kagame raised will remain unanswered. Not because we lack the answer, but because the world depends on Africa never acting on it.
Michael Rutayisire Shema is a Bachelor of Finance student at Mount Kigali University.
Michael Shema Rutayisire
Source : https://en.igihe.com/opinion/article/what-is-really-holding-africa-back-despite-its-abundant-wealth
