East, Southern Africa consult on stopping illicit cash outflows

posted in: Africa

Thabo Mbeki, former South African President


Addis Ababa, Ethiopia – A two-day high-level meeting on illicit financial flows from Africa opens Thursday in Maputo, Mozambique, for key stakeholders from East and Southern Africa to discuss ways of countering the problem, the UN Economic Commission for Africa (ECA) said here Tuesday.

Former South African President Thabo Mbeki, who heads a 10-member high level panel of distinguished personalities from within and outside Africa in addressing the issue, will chair the meeting.

Over 60 delegates are expected to attend the regional meeting that comes on the heels of similar consultations which took place in Kenya, Tunisia, Liberia, Nigeria, Zambia and DR Congo.

The African Union (AU) and ECA in February 2012 launched the high level panel to address the debilitating problem of illicit cash outflows, currently put at US$50 billion a year.

Illicit financial flows constitute, among others, undocumented commercial transactions and criminal activities characterised by overpricing, tax evasion and false declarations.

According to the ECA, these activities are facilitated by some 60 international tax havens and secrecy jurisdictions that enable creating and operating of millions of disguised corporations, shell companies, anonymous trust accounts and fake charitable foundations.

Other techniques used include money laundering, transfer pricing and corruption.

While illicit financial flows are a global problem, their impact on the continent is monumental, thereby representing a significant threat to Africa’s governance and economic development.