Illicit financial activities costing Africa Sh5tr yearly

Africa loses Sh4.9 trillion ($50 billion) each year through illicit financial activities by multinational companies and rich individuals. A report published by the African Union High Level panel on Illicit Financial Flows (IFF) cited multinational companies, especially those operating in Africa’s extractive sector, mostly in oil, gas and mining as the leading perpetrators of the vice in the continent.

Speaking during the launch of “Stop Bleeding Campaign” in Nairobi yesterday, co-ordinator, Human and Trade Union Rights Joel Odigie said the activities pose a major threat to sustainable development and security across the continent.”These resources, if retained in the continent, could be invested in productive sector of these economies to lift Africa’s growing population from under-development and poverty,” he said.

The campaign which is driven by Africa civil society organisations with support from international Non-Governmental Organisations is aimed at stopping illicit financial flows from Africa.

Basic infrastructure

Odigie noted that IFF in Africa results to loss of jobs, income, lack of decent education and health facilities and other basic infrastructure. “We have launched the campaign in Nairobi and it will be joined by other African countries. In this campaign we will meet African leaders including the newly elected Nigerian President Muhammadu Buhari,” noted Odigie.

“Africa should take charge of their resources and work together instead of competing with each other because they are on the losing part.”

The campaign demands for African governments to take action by providing decent jobs, good sanitation and revoke tax incentives . They also called for foreign companies to pay their workers better wages.

Although corrupt practices and weak governance structures are key facilitators of IFFs in Africa, the report notes that tax evasion, international trade manipulations, and organised crime constitute large portions of illicit outflows from the continent.

The Open Society Foundations’ Initiative for West Africa recently stated that throughout Africa, only three per cent of IFFs stem from government corruption, while 64 per cent arise from trade manipulations and 33 per cent originate from organised crime.

Africa Members of Parliament on Tax and IFFs chairperson Khanyisile Tsabalala said Africa is not poor but lacks good leadership. “Africa is rich. We just do not have wise and accountable leaders,” said Tsabalala.