Africa’s Illicit Financial Flows: What do they tell us?
- 30/05/2013 - Illicit financial flows: Africa a net creditor to the rest of the world
- 29/05/2013 - New AfDB-GFI Joint Report: Africa a Net Creditor to the Rest of the World
Given its abundant natural resources, Africa could have the capacity to primarily finance its development needs from its own resources with external financing playing only a complementary role. But as long as the African continent continues to suffer a haemorrhage of funds through illicit financial flows of the order of magnitude that will be described in this session, domestic financing for development will continue to be seriously inadequate. Indeed the irony of Africa being richly endowed with natural resources but continuing to depend on external support for the provision of basic services is a matter of great concern.
This work analyses the volume and pattern of illicit financial flows from African countries and regions over the period 1980 to 2009 and finds that Africa lost up to US$ 1.3 trillion over the thirty year period, measured on a cumulative real basis, largely through illicit financial flows. This amount exceeds inflows over this period and is almost equivalent to Africa’s current real GDP. Further, there is an uneven regional distribution of these flows with SSA countries losing more than North Africa over the thirty-year period, although in the last decade, this trend was reversed. The report also shows that resource-rich countries, particularly fuel exporters, dominated the outflows. Nonetheless, some resources were re-captured through remittances and debt relief.
During this side event, the above-mentioned report will be presented and will anchor a focused discussion by high-level government and private sector stakeholders on the problem of illicit financial flows in Africa and means to address it both at a national and international level. The event will also be a platform for exchange of ideas on the appropriate policy recommendations to curtail these flows.
Trigger Questions to Panelists.
- What is the best way to communicate these findings to enhance buy-in from all stakeholders?
- What should be the policy recommendations to facilitate curtailing of these flows – by national governments and international communities? What should be the priorities?
- What are the implications of these results for:
- Recent and future resource discoveries in Africa?
- Aid to Africa
- What role do you see for the African Development Bank in stemming these flows?
- How do we effectively engage “Absorption” Countries in this endeavour?