The estimated US$50 billion being lost annually by Africa due to illicit financial flows should be a source of concern to the continent, especially as access to finance and capital was a key constraint to growth and economic development, Rwanda’s Minister of Finance and Economic Planning, Mr. Claver Gatete, said.
Mr. Gatete made this known at the third Annual Customer Due Diligence and Corporate Governance Forum organised by the African Export-Import Bank (Afreximbank) holding in Kigali, Rwanda.
A statement from the Afreximbank quoted the Rwandan minister as noting that, over the last 50 years, Africa had lost in excess of US$ 1.7 trillion to illicit financial flows and the amount roughly equaled all the official development assistance it received during the same period.
The minister urged African financial institutions, regulatory bodies and governments to work together to establish mechanisms that would ensure a healthier financial landscape and help prevent financial crimes as well as strengthen investors’ confidence in the continent.
Also speaking, Dr. George Elombi, Afreximbank Executive Vice-President in charge of Corporate Governance and Legal Services, told participants that the high cost of conducting customer due diligence adversely affected the stability of the African financial sector and the productivity of corporate entities.
“Financial crimes, compounded by weak corporate governance capacity, have the potential to derail legitimate economic activity and slow down the development of financial markets essential for optimal allocation of capital to support the structural transformation of resource-constrained African economies,” he said.
He announced that Afreximbank was preparing to launch an online African Customer Due Diligence Repository Platform to provide a centralized source of primary data required to conduct customer due diligence checks on African counterparties.
Mr. Elombi said the platform would allow subscribers to conduct due diligence checks at a low cost, thereby decreasing the cost of trade finance in Africa.
“Afreximbank is also increasing awareness on the need to look inward for financial resources through its Africa Direct Investment Initiative, and in addition, it is promoting the use of African credit rating agencies by African entities as a way to commoditize corporate and banking-related information in order to ensure greater access to credit at reduced compliance costs,” he stated.
The Forum, which is being organized in collaboration with the Rwanda Development Board, followed two editions held in Dakar in 2014 and in Seychelles in 2015.
The more than 200 participants include bankers, regulators, and representatives of financial institutions and corporate entities from Africa and beyond.
It is featuring open discussions and presentations by experts, including from the International Anti-Corruption Academy in Vienna, the International Finance Corporation, the Rwanda Governance Board and several international and African banks.
