‘Swiss Leaks’ Catastrophic for African Economies
Friday, February 13, 2015
Developing countries in Africa have been hit by the full force of the recent Swiss Leaks scandal. The Swiss branch of HSBC bank cost Tanzania, Senegal and the Ivory Coast over 30% of their national health budgets. EurActiv France reports.
The “Swiss Leaks” scandal, revealed by Le Monde and a group of around 60 other international media organisations, shed light on the large-scale tax evasion systems put in place by the Swiss arm of British bank HSBC. Between 2006 and 2007, 100,000 clients and 20,000 offshore companies secretly channeled over €180 billion through HSBC accounts.
This extensive fraud, actively encouraged by the bank, had a devastating effect on the budgets of developing countries, particularly in Africa.
The HSBC tax evasion scam boasted high numbers of clients from 19 African countries, including 1787 from South Africa and 1068 from Morocco. Clients from other, poorer countries were also involved, such as Mali (68 clients) and Zambia (69 clients).
Loss of capital
While the sums in question are less substantial than for some developed countries like Switzerland or the United States, many African countries have lost significant amounts of capital through the Swiss Leaks affair. According to information collected by the NGO One, the losses incurred by Ivory Coast correspond to 0.58% of the country’s gross national product (GNP), or €169 million. This loss of capital is equivalent to 39% of the national health budget, or 14% of the education budget.
The situation is similar in other developing countries, like Senegal. Here, the Swiss Leaks documents revealed a loss of 0.90% of GNP, equal to 38% of the health budget or 18% of the education budget. Tanzania’s loss of 0.48% of GNP would cover 17% of health, and 10% of education spending.
Source: EurActiv (link opens in a new window)
- Health Care
- public health