Hon Speaker, hon members, at the recent high- level meeting of the United Nations Economic Commission for Africa, Uneca, it was estimated that an amount of US$50 billion is exported out of the African continent illegally every year. This is done through tax evasion, incorrect invoicing, import overpricing and the underpricing of exports. According to information given to the African Union, the countries most affected are South Africa, Algeria, Egypt, Morocco and Nigeria.
The flow of illicit finance severely undermines the possibilities for socioeconomic development across the continent. It reduces tax collection, cancels investment, and undermines free trade as it removes resources that could otherwise be used for poverty alleviation and economic growth.
Government has measures in place to address this challenge. The financial surveillance department of the SA Reserve Bank, responsible for the administration of exchange control, continues to detect and deal with unlawful financial outflows by people who bypass restrictions placed on the movement of funds exceeding certain thresholds.
In addition, the Financial Intelligence Centre processes information from a range of financial institutions, such as banks, in order to prevent money laundering and terror financing. In the previous financial year, the centre referred cases to the value of R66,1 billion to law enforcement agencies and the SA Revenue Service, Sars, for investigation.
The SA Revenue Service has also achieved significant success in identifying, seizing - where appropriate - and prosecuting those involved in illegal importing, under-invoicing and over-invoicing of imports and exports, as well as value-added tax fraud. During the current financial year, Sars has already confiscated 1,4 million articles of clothing and footwear valued at almost R580 million. It has seized drugs worth R139 million and 683 million sticks of cigarettes valued at R180 million. In addition, Sars has offered an amnesty to encourage culprits to come forward.
Government will work with the United Nations Economic Commission for Africa to contribute to stemming the tide of the illicit financial outflows from South Africa. I thank you, hon Speaker. [Applause.]
Thank you very much, hon Speaker.
Ndiyabulela, Mongameli wethu, ngempendulo yakho ecacileyo. Ukongeza apho sibulela kakhulu ukuzinikezela nokuzibophelela kukarhulumente waseMzantsi Afrika ukuqinisekisa ukuba esi senzo sincothulwa kunye neengcambu. Siyambulela urhulumente ngesenzo esinjalo.
Sikwabulela nale nxaxheba yokuba kuqinisekiswe ukuba la mazwe angoongxowankulu ayosondezwa ukuze aqinisekise ukuba nawo ayawavala amazibuko. Xa amazibuko siwavala ngapha abe evulelwa kwela cala loo nto iba yingxaki. Siyayibulela ke loo nto, Mongameli.
UMONGAMELI WERIPHABLIKI: Ndiyabulela, Somlomo. Ewe, siza kuqhubeka sisebenzisana nawo amazwe angoongxowankulu kuba kunyanzelekile ukuba sibafumane abantu abarhwaphiliza imali bayikhuphe kweli lizwe ngokungekho mthethweni ukuze ibuye imali yakuthi ize ekhaya. Ngoko ke siza kuqhubeka sisenza njalo. Ndiyabulela. [Kwaqhwatywa.] (Translation of isiXhosa paragraphs follows.)
[I thank you, our President, for your straightforward answer. To add to that, we thank you very much for the responsibility taken by the government of South Africa in making sure that we root out this behaviour. We thank the government for such a move.
We also appreciate the initiative of making sure that the First World countries are brought on board so that we can be sure that they keep the ports closed. When we close the ports this side, they cannot be opened on the other side as that could be a problem. We thank you for that, President.
I thank you, hon Speaker. Yes, we will continue working together with the First World countries because we must get those people who are involved in illicit capital outflow from this country so that we can bring it back home. We will therefore continue to do so. I thank you. [Applause.]]
Thank you, Mr Speaker. Mr President, as you have said, the report on illicit capital outflow shows it is mainly attributable to kickbacks, bribery, trade mispricing and favouritism towards multinational corporations. And, in many instances, heads of state and governments co- operate.
In Sierra Leone the capital flight was 425% of their GDP. In the Democratic Republic of the Congo, DRC, and in Zimbabwe north of us, the flight was 344% of GDP. We are one of the big five losers in the world. This is serious. Should you not think, hon President, that this must be higher on your agenda and is it not possible to take more drastic steps than just simply using the ordinary machinery available to you and the state?
Hon Speaker, I thought I did indicate what the government is doing. I even indicated what the successes were in those efforts. Now, of course, the hon member has a right to think that you could do something more. If only he could have made the suggestion as to what it is that he thinks we are not doing, which we need to do because we are putting in place intelligence organisations that are very sophisticated. I'm not certain what else we need to do. I wish I knew and, unfortunately, he is not being helpful saying much as we tabulated all of these things - there are other things that we can do. It would have been useful if he had done so. In as far as government is concerned, we are doing our best. Thank you, hon Speaker. [Applause.]
Thank you, Speaker, and thank you, hon President. Among the countries you have mentioned which are also losing in terms of this outflow of illegal capital, many are lacking in administrative capacity to put a stop to this theft of African resources. Now, what I want to know is: What role, if any, will government play to help countries that do not have sufficient administrative capacity in order to stop this illicit outflow of capital from our continent, as we all know that these are resources that we desperately need to build more houses and better roads for our people?
Hon Speaker, of course, the only thing we can do is to exchange information with these countries, because I don't think we can impose on them and tell them what to do or what not to do. They are running their own countries. In the relations between countries, countries do say what help they need, particularly after an exchange of information. If there was such a request, we would certainly do what we can. But what we cannot do is to impose on them in the running of their own countries. Thank you, hon Speaker. [Applause.]
Thank you, Speaker. Honourable President, global financial integrity estimates that South Africa lost approximately R650 billion in illicit financial outflows, and that was in the last decade. Honourable President, approximately half of this was lost through corruption, bribery and kickbacks. What additional specific steps will government take to prosecute these crimes, perhaps using the Special Investigating Unit, particularly when cases involve families who are connected to high-ranking government officials? How will government prevent these crimes? Will the South Africa Review again look at its current measures or legislation, and perhaps the role that the private financial institutions will be playing to strengthen and prohibit the illicit outflows of money? Thank you.
Speaker, certainly the hon member knows that we continue to take measures against the wrongdoings. I think we have a number of cases, more than at any other time, that are being investigated. We have signed a number of proclamations. Wherever we come across corruption, we act. I have said here - even in the past - that it would be very useful if hon members, if they have very definite information to say, "Government, here is a case."
This is because at times it doesn't really help to make a general statement, except to make us aware us that there is corruption. When you have said you know for a fact that there is a case, we will act once we receive such information. So, we are not going to change and there is going to be no favour, no fear. Wherever there is corruption, we act, and we will continue doing so. Thank you. [Applause.]
Release of Arms Deal report
2. The Leader of the Opposition (DA) asked the President of the Republic:
(1) Whether he intends releasing the full and unexpurgated final report to be produced by the Commission of Inquiry into the Arms Deal; if not, why not; if so, what are the relevant details;
(2) whether steps will be taken against the persons that would be implicated in the report; if not, why not; if so, what steps?