The Sunday News
Sunday News Reporter
AFRICA is losing more than $50 billion annually due to illicit financial flows from the continent, a report by the African Union (AU) High Level Panel (HLP) on Illicit Financial Flows (IFFs) says. The figure is roughly equivalent to the official development assistance received by the continent from external partners every year.
Illicit financial flows (IFFs) can be defined as illegal movements of money or capital from one country to another.
According to the report on illicit financial flows on the continent, these flows relate principally to commercial transactions, tax evasion, criminal activities such as money laundering, and drug, arms, and human trafficking, bribery, corruption and abuse of office.
Former South African President Thabo Mbeki, who chairs the High Level Panel on Illicit Financial Flows, launched the report in February which also estimates that over the past 50 years the continent has lost in excess of $1 trillion in illicit financial flows.
The figure is also almost equivalent to what Africa has received as official development assistance over the same period.
It is, however, noted in the report that the estimates may only be telling part of the story, with the continent most likely to be losing far more than what is projected.
“Over the last 50 years, Africa is estimated to have lost in excess of $1 trillion in illicit financial flows (IFFs). This sum is roughly equivalent to all of the official development assistance received by Africa during the same time frame.
“Currently, Africa is estimated to be losing more than $50 billion annually in IFFs. These estimates often exclude some forms of IFFs that by nature are secret and cannot be properly estimated, such as proceeds of bribery and trafficking of drugs, people and firearms. The amount lost annually by Africa through IFFs is therefore likely to exceed $50 billion by a significant amount,” reads part of the report.
The report further posits that the outflows of capital from the continent were of major concern for Africa, given inadequate growth, high levels of poverty, resource needs for the continent and the changing global landscape of official development assistance.
Underscoring the need for Africa to look within to fund its development agenda and reduce reliance on official development assistance, the report points out that the resource needs of African countries for social services, infrastructure and investment emphasised the importance of stemming IFFs from the continent.
