Poverty Due to Capital Flight, Says UK Expert

from All Africa

New Vision (Kampala)

By Ibrahim Kasita
Kampala

CAPITAL flight by corrupt leaders and over dependence on foreign aid have led to poverty and under-development in sub-Saharan Africa and most Commonwealth countries.

Sony Kapoor, an international finance, development and environment consultant in the UK, said: "Capital flight is like genocide. Capital flows uphill from the poor to the rich, which has caused a huge debt burden on the African people. Corrupt leaders who have stolen their countries' money keep it with banks in Switzerland, rendering Africa poor."

"These poor countries run trade deficits because they rely on imports more than exports. This shortage makes the rest of the money come from aid, which has also caused problems of huge debts," Kapoor said at the Commonwealth Peoples Forum at Hotel Africana.

Aid and donor funds, Kapoor said, had played a great role in keeping sub-Saharan Africa poor because they have stringent repayment conditions.

He said the administrative cost of the donor funds is high.

Kapoor said development could be attained through domestic resource mobilisation, resource retention and resource supplements.

Augustus Nuwagaba, the coordinator for Caritas Uganda, said development should be initiated with the poor countries themselves rather than relying on foreign countries. "We need market penetration. Trade is about competition. You cannot live on the savings of other countries."