Lecture given during a bootcamp training.

1. MONEY & FISCAL ISSUES IN AFRICA
DR. LYLA LATIF
Chair, Committee of Fiscal Studies
Faculty of Law, University of Nairobi

3. Money
• Is central to the:
• realisation of rights,
• giving the social contract its legitimacy and
• spurring economic development.

4. Fiscal Policy
• generation,
• mobilisation and
• spending of money in a way that is responsible, transparent, accountable, equitable and
progressive.
Is necessary for the:
• state building,
• improving livelihoods and
• sharing in prosperity.
Money and the fiscal policy that underpins its sourcing and spending
supports:

5. Fiscal Policy &
Destructive
Impact on
Money
Devaluing it,
Pushing economies towards inflation,
austerity, conflict which then undermines:
• state building,
• human rights,
• responsible governance and
• agency in decision making circles at the international
level.
Power to expose a nation to vulnerabilities
– in the form of illicit financial flows.

6. The Good, The Bad, The Ugly
Good
• Inclusive, fair and progressive
taxation,
• Properly redistributed towards the
achievement of HR and SDGs
• Affirms the social contract
Bad/Ugly
1. Decisively shaped to respond to
colonial structures and relations of
power
2. Framed around aid and debt
3. Framed around DTA and BITs
4. Exposed to vulnerabilities (IFFs)
5. Framed around human rights
6. Structured based on international
political negotiations
7. Evolving in response to
digitalisation and platform society

7. Reifies structure,
hierarchy and
power relations
• Is it true that money is
considered safe when packed
off to developed or leading
European and Asian economies
and their stock exchanges?
• Or is money safe and
generating more returns on
investment when spent in
developing economies?
• What sort of an economic
order, political and market
system is needed to avoid the
image of money/investment
risks and fiscal crisis?

10. 7 constructs
Decisively shaped to respond to colonial structures and relations of
power
Framed around aid and debt
Framed around DTA and BITs
Exposed to vulnerabilities (IFFs)
Framed around human rights
Structured based on international political negotiations
Evolving in response to digitalisation

11. Decisively shaped to respond
to colonial structures and
relations of power
• Disconnect between money, fiscal policy and
their usefulness towards establishing a
welfare colonial state.
• Inability to decolonize from the economics
and fiscal inequalities created by imperialism
after political independence
• Post colonial tax systems evolve in relation
to pressures from outside

12. Framed around aid and debt
• Vast amount of outflows of
public money from the global
South in interest payments:
nearly $4.2 trillion, far
overshadowing the aid
received by these countries
• Debt and aid is assumed to
have solidified the authority
of a small group of private
actors, mostly based in
advanced countries, over the
fiscal affairs of entire African
nations and societies

13. Framed around DTAs
and BITs
• African countries are drawn to
signing DTAs and BITs for FDI- in
reality these treaties extract
more money out of Africa than
they bring in.
• In the long run we then see
problems of budget deficits and
reduced spending on social and
economic rights.

14. Exposed to
Vulnerabilities
UNCTAD 2020: 89billion lost annually from
Africa due to IFFs. This amount does not
factor IFFs routed from corruption and
money laundering.
African loses about $148billion to
corruption and about at $1.6trillion are
laundered globally

15. Human Rights
• African Socialism
• The organisation of the financial
system modelled along capital
extraction, the dollar economy
and a labour intensive economy is
also a root cause of weak local
currencies.

16. Structured based on
International
Political Negotiations
• The fiscal crisis in Africa
stem from tax problems –
low tax base, low tax
morale, BEPS and IFFs.
• Decisions on improving the
fiscal space nationally
cannot be done without
agreement from foreign
interests especially where
the taxation of
multinational corporations
are concerned.

17. Evolving in response to Digitalisation

18. Finally…
• Engage
• Challenge
• Influence