Migrant crisis: These numbers show that for Africa, $2bn EU aid deal no match for remittances or multinational tax cash

With diaspora billions building mega-dams and keeping entire governments adrift, Europe needs to ‘get’ Africa

FROM “missing” Congolese delegations to grumpy African leaders, the European Union’s migration summit in Malta’s Valletta—one of the biggest summit the tiny but strategic island has ever hosted—was not without its moments. 

The Democratic Republic of Congo’s (DRC)  delegation was eventually located, hidden in plain view on the steps of the meeting centre, but the disgruntlement by African leaders will take longer to dissipate, even as billions more in aid were again promised to the continent.

Leaders from both continents agreed a 1.8-billion-euro ($1.9-billion) ‘Emergency Trust Fund” to fight poverty in Africa, while accelerating the repatriation of failed asylum-seekers, despite open reluctance from the African side.

The deal is part of a two-pronged strategy by “fortress Europe” to  regain control of its southern and eastern borders, the major conduits for the majority of asylum seekers, some 800,000 of whom have crossed this year in what is being described as the biggest migratory flux in Europe since World War II.

The bulk of them have come via Turkey, with which a separate deal is being pursued, but the EU has presented the problems driving migration from Africa as long-term.

In what has drawn accusations of double-standards, the EU has reserved all its tough language for Africa, which according to the International Organisation for Migration (IOM)  contributed about 150,000 of those migrants, even as it in the Valletta deal sought to couch some measures in 14 pages of “co-operation” language.

The EU’s strategy is now simpler, with the realisation that migrants from the continent can only be contained in detention centres and other temporary shelters for so long. The newer plan is to tackle the problems in Africa from a longer-term view, hence the new hundreds of millions of dollars in cash it has offered.

Curiously, it is also an admission that past aid money—of which $4.6 billion was channelled into sub-Saharan Africa by the EU in 2013— has essentially failed; the action areas outlined in the Malta deal are a round-up of the objectives that traditional aid has always sought to achieve on the continent.

According to the joint action plan, these include poverty, conflict, repressive governance and the unsafe conditions endured by the millions of people displaced across Africa.

The money is coming from the EU’s collective budget, with the bloc’s member states asked to match it with contributions of their own. The national pledges to date however have totalled about $73 million (78.2 million euros), in an underwhelming response officials in Brussels partly blame on populist pressure on governments to be seen taking a tough line on the migrant issue.

Reflecting the acrimonious mood over the deal, Senegal President Macky Sall claimed African governments would have no need of aid if they could collect the nearly $56 billion (60 billion euros) lost through tax avoidance by western multinationals, and other “fraudulent” activities.

It was a sharp echoing of his position at the Financing for Development Summit held in the Ethiopian capital of Addis Ababa in July, where rich nations shot down demands for or more transparency on tax avoidance by their multinationals operating on the continent.

“Illicit money flows and tax evasion are costing Africa between $30-$60 billion a year. This is more than the total development aid,” said Sall at the start of the Addis summit. 

But that meeting, which had been identified as key to funding the Sustainable Development Goals unveiled in September to succeed the MDGs, ended in the odd position of rich nations, from which most of the multinationals in Africa come from, instead arguing for less transparency. (See article).

Africa argues that multinational enterprises usually take advantage of corruption and weak domestic regulation to avoid paying up the full amount of tax that is due, and had in Addis pushed for the creation of a UN-managed intergovernmental body charged with overseeing a new set of global fiscal regulations that would circumvent the accounting tricks the multinationals are regularly accused of.

But richer nations would only agree to “reduce opportunities for tax avoidance”: multinationals, in addition to being potent tools of foreign policy, are key to developed countries’ continued access to African markets and resources, and to the health of the public purse back home.

Sall said the deal with the EU did not offer anything like the money needed to address Africa’s problems and accused the Europeans of exaggerating the scale of African migration and “putting too much emphasis on readmission (of illegal immigrants), perhaps because of public opinion.”

As such a plan to send African migrants back using “laissez faire” papers in lieu of passports was ommitted from the final declarations, blocked by African delegations.

African leaders like Sall have also complained of “double standards,” with the Europeans perceived to be welcoming Syrians and others, but not their citizens, who are perceived as economic migrants, putting them in the firing line of nationalistic Europeans concerned with rising joblessness.

While the Valletta deal calls for more opportunities for legal migration, the only concrete step agreed was a scheme to expand scholarships for students and academics to come to Europe, and was also light on specifics other than rehashing past aid objectives.

African nations are also afraid of losing billions in remittances, which exceed the value of development aid, according to diplomats.

According to the World Bank, remittances to sub-Saharan Africa are expected to reach $33 billion this year, rising to $37 billion in 2017—a long way off from the cash the EU is offering, and money which has more direct impact in African families.

The emergency action plan has attempted to address this, by stating that it would reduce the prohibitive cost of remittances to the countries that most need it—to less than 3% by 2030.

But the initial  $1.9 billion trust fund cash looks even more miniscule when shared out among the 23 African countries identified by the EU as benefiting from the fund. 

These countries, which include populous Nigeria, Egypt and Ethiopia, have a combined  population of about 747 million people, which translates to $2.5 extra to change a person’s living circumstances until its 2020 lifespan (or $0.5 a year).

This the EU insists, is in addition to the existing development aid, which between 2008-2013 reached $22.8 billion, a number that will likely remain constant for the next five years going by past trends.

Given the importance of diaspora money—in Ethiopia it has helped build the 6,000MW Grand Renaissance Dam (See article) while in another migrant source country, Eritrea, such money essentially props the government,  faced with such math, Africa will remain largely unimpressed—what it needs instead is a much-more level playing field in international trade that is more sustainable.   

Europe’s new tying of aid to migration control will thus struggle to shake off the tag of the West once again arm twisting Africa, using money that would be easily linked to the continent’s resources, and on issues it had a major hand in, such as the Libya crisis.

—Additional reporting from AFP

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