Illicit financial flows impeding Africa’s development – ECA - PUNCH
BY ’Femi Asu
The development of African countries is being impeded by the loss of more than $50bn annually through illicit financial flows, the Economic Commission for Africa has said.
The Principal Regional Advisor and Head of Development Planning and Statistics, ECA, Mr Sylvain Boko, said African countries were committed to mobilising adequate and predictable resources to finance the sustainable development goals agenda.
Boko was quoted in a statement as saying at the ongoing High-Level Policy Dialogue on Development Planning in Africa, in Egypt, that it was unacceptable that Africa’s development agenda continued to be hampered by such illegal actions.
“It is estimated that $100bn a year, about four per cent of Africa’s GDP, have been illegally earned, transferred, or used, much of it due to mis-invoicing. This retards Africa’s growth; weakens public institutions and rule of law; discourages the culture of paying taxes and value-addition to natural resources; and results in countries over relying on official development assistance,” he said.
He said addressing IFFs on the continent would required hard data on the scope of IFFs, removing legal loopholes that facilitate IFFs, designing cohesive international agreements to address IFFs; and developing local and national capacity to address IFFs, among others.
Boko said challenges to SDG financing on the continent included own-source revenue generation, access to overseas development assistance and foreign direct investments, and new or innovative long-term financing, and international capital markets.
The ECA principal regional advisor said while national development planning processes embodied resource mobilisation, many countries were yet to effectively link the two.
He said, the scale and diversity of SGD financing available was growing across the region.
“This offers significant potential to drive regional progress towards realising the SDGs,” said Boko, adding that domestic resource mobilisation improved substantially in recent decades in Africa, but tax-to-GDP ratios were still below the 25 per cent threshold deemed sufficient.
“The challenges are many and varied, but not insurmountable. In this regard, countries must build technical, legal and administrative capacity for effective public financial management,” he said.