JOHANNESBURG Dec 17 Almost $9 billion was
illicitly siphoned out of Zambia, Africa's top copper producer
over the last decade, according to a report by a U.S. anti-graft
watchdog, which highlights how resource wealth is often
squandered in the developing world.
The amount is almost half the size of Zambia's current gross
domestic product and much of the money would have been channeled
to offshore banks and tax havens, draining one of the world's
poorest countries of badly needed capital.
The Zambian government said the report was in line with its
own findings and vowed to crack down on culprits.
The report by U.S.-based anti-graft watchdog Global
Financial Integrity (GFI) said the southern African nation lost
$8.8 billion to capital flight between 2001 and 2010.
"Of that, $4.9 billion can be attributed to trade
misinvoicing, which is a type of trade fraud used by commercial
importers and exporters around the world," GFI economist Sarah
The way this typically works is that an importer pretends to
pay more to foreigners than they actually spend, with the
difference put discreetly into banks or other assets abroad.
Major commodity producers seem especially susceptible to
these trends because of the often opaque nature of resources
Last year, calculations provided to Reuters by GFI estimated
that Zambia's neighbour Angola, Africa's second-largest oil
producer, had lost almost $6 billion to capital flight in 2009.
Aside from trade misinvoicing, money can also be spirited
illegally offshore via official corruption or criminal
activities, which can be traced through balance of payments
GFI uses the International Monetary Fund's Direction of
Trade statistics for its calculations.
Zambian government officials have long maintained copper
producers in the country have not been paying their share of
"These revelations are in line with what we have always been
saying with regard to tax avoidance and income leakages in
general," Finance Deputy Minister Miles Sampa said of the GFI
"The onus is on us ... to put and implement proper
monitoring measures. Where the law is being broken our law
enforcement agencies will move in and arrest the culprits so
that they can be punished."
Former Zambian mines minister Wylbur Simuusa said earlier
this year that the government of populist President Michael Sata
believed it was owed up to $1 billion in back taxes from mining
houses in the country.
Transparency questions have also been raised in the past
about the accuracy of Zambia's copper export data.
GFI announced its findings on Zambia ahead of the release on
Tuesday of its full report measuring illicit financial flows out
of 150 developing countries and emerging economies in the last
(Additional reporting by Chris Mfula; Editing by Susan Fenton)