Nigeria leads on IFF recovery but Africa is still losing $89b a year

A new report from UNCTAD, the United Nations agency on trade and development, finds that African nations are losing an estimated US$88.6 billion every year in illicit financial flows (IFFs) across borders.

IFFs are movements of money and assets that are illegal in source, transfer or use. These losses approach the amount that African countries receive in annual development aid ($48 billion) plus foreign direct investment ($54 billion), based on averages from 2013 to 2015.

Nigeria is the most active African nation in its efforts to recover stolen assets. President Muhammadu Buhari, whose anti-corruption efforts have included focus on IFFs, said the patterns of fund transfer are similar to that of migration, with countries of origin, a destination and transit locations in between. Nigeria is the most active African nation in its efforts to recover stolen assets.

“The whole process of mitigating illicit financial flows, therefore, cuts across several jurisdictions,” Buhari said in an introduction to the document.

“These jurisdictions may protect fake charitable organizations, facilitate money-laundering, warehouse disguised corporations and conceal anonymous trust accounts. Ironically, the fact remains that the funds involved often come from jurisdictions with scarce resources for development financing, depleted foreign reserves, drastic reduction in collectable revenue, tax underpayment or evasion and poor investment inflows.”

Solutions to the problem must involve international tax cooperation and anti-corruption measures. The international community should devote more resources to tackle IFFs, including capacity-building for tax and customs authorities in developing countries, the report said.

The complete Economic Development in Africa Report 2020 is available at this link.

source: https://africatimes.com/2020/09/29/nigeria-leads-on-iff-recovery-but-africa-is-still-losing-89b-a-year/

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