Financial experts, analysts and lawyers from around Africa met in Nairobi to discuss strategies to curb illicit financial flows from the continent, which deny states revenue estimated at US$50 billion annually, through tax evasion by foreign multinational corporations.
Experts from pan-African organisations, including the African Union Commission (AUC), the UN Economic Commission for Africa (ECA) and the African Development Bank (AfDB) resolved to pursue “special initiatives” to fight the illegal financial flows, including through coordinated policy approaches.
“Given the mosaic of actors and ongoing and prospective initiatives on the different dimensions of illicit financial flows (IFFs) at national, regional and global levels, there is need for coherence, coordination and complementary partnerships,” said Aida Opoku-Mensah, ECA’s Head of Special Initiatives.
The experts who attended a two-day workshop to galvanize support among groups working to confront the challenge of stemming illicit financial flows (IFFs) from Africa, stressed the need for more work to be done through tangible steps towards a coherent approach to curb IFFs.
Opuku-Mensah said African countries needed to exert more efforts to deal with the illicit financial flows.
Financial experts say most foreign firms operating within the continent channel funds from the continent through expensive equipment maintenance contracts and other forms of finance, including equipment leases which allow billions worth of revenue to be paid out by the foreign firms untaxed.
The ECA said in a statement that a consortium has been formed to stem IIFs and would be tasked with overseeing the implementation of the recommendations of the report of the High Level Panel on IFFs, which was chaired by former South African President Thabo Mbeki.
“Agreeing upon the functions and applicability of the consortium as well as the actionable implementation plan to counter IFFs will move this consortium into its immediate next step of implementation,” Opuku-Mensah noted.
She said implementing the recommendations of the Report of the High Level Panel has “always been underpinned by a big tent approach, thus widening the scope for complementary partnerships between leading institutions and actors.”
This, she added, is why the consortium has been established, to not only leverage partnerships but also provide a platform for experience sharing and most importantly, to guide and engage in the concrete implementation efforts to stem IFFs from Africa.
Presenting the terms of reference for the consortium, Advocate Monjaku Gumbi, Senior Advisor at the Thabo Mbeki Foundation, said Africa was a net exporter of capital and the continent will not apologize to anyone for its fight against IFFs.
She said there’s need for organizations working on stemming IFF on the continent to collaborate with one another on related activities at national and continental levels.
The institutions met to discuss collaboration in the generation and dissemination of knowledge on the illicit financial flows.
They also discussed how to strengthen the institutional, regulatory and human capacity of various state institutions to counter the financial outflows.
The consortium is expected to contribute to the annual report on curbing IFFs which would be submitted to the African Union Heads of State and Government.
