Africa Must Seal Illicit Capital Outflow and Inflow Loopholes

844 views Published on 3rd May 2017

A report released by Washington-based think-tank Global Financial Integrity (GFI) reveals that illicit capital flows into and out of developing economies ranged from $2 trillion to $3.5 trillion in 2014, with Africa being most hit. The report looked at both illicit outflows, which rob poor countries of capital that could be taxed or invested, and illicit inflows, which could point to cash being funneled to tax havens or to be laundered.

 

It is ironic that over the decade of 2005 to 2014, sub-Saharan Africa led all regions for illicit outflows, estimated at 7.5 to 11.6 percent of its total trade. As this happens, over 70% of the AU Commission is funded by outside donors, putting the organizations independence at stake. In addition, AMISOM is mainly funded by the EU which has committed about €1.2 billion ($1.33 billion) since 2007. When the EU cut funding to AMISOM by 20 per cent, African Union troops in Somalia went without allowances for more than five months.

 

Sub-Saharan Africa is actually a net exporter of capital to the rest of the world. The region urgently needs to put its act together and address the loopholes that rob it of the much needed capital to spur socio-economic growth and run daily operations.

 

 

 


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