Africa urged to renewed drive to stop illicit financial flows

posted in: Africa

Photo: voanews


Lagos, Nigeria- A renewed appeal has gone out from participants in a roundtable at the United Nations Headquarters, New York, US, to stop illicit financial flows (IFF) from Africa, which is depriving the continent of almost US$ 50 billion yearly.

According to a statement from the New Partnership for Africa’s Development (NEPAD), obtained by PANA here on Saturday, participants, including representatives of international development institutions like NEPAD Agency and the UN Economic Commission for Africa (UNECA), are worried at the devastating effects of the “criminal act” on the continent’s economy.

At the discussion, chaired by Ambassador Segun Apata, participants also heard that between 1970 and 2008, an estimated US$ 900 billion of IFF took place in Africa.

Ambassador Apata is part of an eight-member, high-level panel appointed by the African Union (AU) and UNECA to investigate the extend of IFF.

Headed by former South Africa President Thabo Mbeki, panel members visited a number of African countries to sensitize the people on the dangers of IFF.

The body has already commissioned a research in that direction and preliminary findings show that the highest percent of illicit flows is 60%, regarding commercial transactions, was through multinational corporations.

Criminal activities such as trade in drugs, weapons and people amounted to 35%, with bribery and embezzlement making up only 5%.

In his contributions at the meeting, NEPAD’s Chief Executive Officer, Dr. Ibrahim Mayaki, said illicit financial flows from Africa were an indication of a deficit in proper governance of resources.

Dr. Mayaki said public education was very important so that citizens would be aware of what goes on as well as the impact of these flows.

He said the study was part of efforts by the AU to improve ownership and governance of resources.

To sensitize and mobilise the people, UNECA has coined the phrase: “Stop it, Track it and Get it” as part of the campaign to put an end to these crimes.

The report identifies some of the main channels for illegal financial flows to include trade mis-invoicing; transfer pricing; investment-related transactions, offshore financial and banking activities.

Parts of the negative effects of IFF include loss of tax revenues, damage to economic potential and weakened governance.

The high-level panel is conducting country and sub-regional consultations with international actors and is expected to submit the final Report by March 2014.