By Loubna Flah
By Loubna Flah
Morocco World News
Casablanca, March 3, 2012
According to the Moroccan weekly la Vie Eco, the Global Finance Integrity (GFI), a American NGO based in Washington whose mission consists in conducting research and multilateral policies aimed at curtailing the illegal flow of financial assets, approximately 328 billion dirhams of Moroccan public funds have been transferred illegally to foreign countries between 1970 and 2008, the equivalent of 41 billion dollars in 38 years.
The research was conducted by a team of researchers led by two seasoned economists Dev Kar, former chief economist at the IMF ( International Monetary Fund) and Devon Cartwhrith-Smith. The list of countries included in the GFI report is topped by Nigeria that has seen 240 billion dollars of its public funds embezzled and injected in foreign financial institutions sheltered from prosecution in tax havens. Morocco is ranked in the fourth position ahead of Algeria where public funds dilapidation has reached 35 billion Dollars.
The figures in the African continent reveal a disastrous financial situation for most African countries. Public funds are normally available for public spending within the state and they are mostly collected through the levy of taxes. This money is used to sponsor the government projects that are voted in the parliament. In democratic systems, the management of public funds is subject to public scrutiny. Nevertheless, in many countries like Morocco millions of dollars were squandered in the past by former public officials in total impunity.
This is the result of the absence of a system of public accountability where public agencies and enterprises entrusted with public resources can be immediately answerable to public opinion for fiscal and social responsibilities. Consequently, Morocco and countries in similar situations remained for many years totally devoid of a sustainable plan to reinforce their infrastructure and to finance drastic reforms. According to the GFI report, revenues generated from tax evasion makeup 60% to 65% of illegal assets. The report clearly states that the funds are illegally transferred abroad through” the overestimation of imports and the underestimation of exports”.
The Moroccan office of exchange remains skeptical about the reliability of the results announced in the GFI report. An official in the office of exchange wonders if “the report has taken into account the Nonresident Moroccan (NRM) financial assets, the diplomat’s bank accounts, the assets deposited by our exporters and foreign investment.
Morocco has relaxed its fiscal procedures in order to encourage exports. According to LA Vie Eco Moroccan exporters are no longer required to refer to the office of exchange since they can now use their own export titles. In fact, 95% of the payment in foreign currency was made via local banks rather than the office of exchange. Besides, exporting companies have now the right to open bank accounts abroad in order to “centralize” their bills abroad via “pivot” accounts. Likewise insurance companies are allowed to place investments abroad in deference to an established threshold.