Misleading Numbers About Illicit Financial Flows: The Former Norwegian Ambassador to Zambia speaks up

09May18

Arve Ofstad was the Norwegian Ambassador to Zambia from 2011 to 2016. He has written an article titled Misleading Numbers on Capital Flight” in the business newspaper Dagens Næringsliv about the often repeated myth of billion dollar illicit financial flows from Zambia through mispricing of copper exports.  Here is my (Google assisted) translation of his article.

Screen Shot 2018-05-09 at 12.25.01

The caption reads: “Gross export revenue from the mining sector, which is relatively expensive to operate in Zambia, has varied around six to seven billion USD a year. No one has been able to explain how two-three and maybe four billion dollars could disappear annually from an economy of this size”

The former Ambassador reflects on the role of Norwegian organisations,  political leaders and funding in helping to create and promote the myth (along with other Northern organisations and the film Stealing Africa). 

He stresses not only that the numbers are misleading, but that they are still referenced in the domestic debate in Zambia, and are still causing damage to the important work of improving revenue collection and tax compliance; “sadly they have they helped to make the effort to reform the tax system and streamline tax collection more difficult, and undermined efforts to create a mutual understanding and informed debate on the challenges in the mining sector and taxation of it…. As long as both politicians and activists repeat the inflated  numbers, many are not impressed by the effects of the practical reforms that have actually increased tax revenues from the mining sector from near zero in 2006 to around  900 million USD by 2015.”



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