Africa is losing nearly $89bn a year in illicit financial flows such as tax evasion and theft, amounting to more than it receives in development aid, a new UN study shows. The estimate, published on Monday in the United Nations Conference on Trade and Development’s (UNCTAD) 248-page report, is the UN’s most comprehensive to date for Africa. It shows an increasing trend over time and is higher than most previous estimates.
Nearly half of the total annual figure of $88.6bn is accounted for by the export of commodities such as gold, diamonds and platinum, the report said. For example, gold accounted for 77 percent of total under-invoiced exports worth $40bn in 2015, it showed. Understating a commodity’s true value helps conceal trade profits abroad and deprives developing countries of foreign exchange and erodes their tax base, UNCTAD said.
The report calls Africa a “net creditor to the world”, echoing economists’ observations that the aid-reliant continent is actually a net exporter of capital because of these trends.
Illicit financial flows rob Africa and its people of their prospects, undermining transparency and accountability and eroding trust in African institutions, said UNCTAD Secretary-General Mukhisa Kituyi. Junior Davis, head of policy and research at UNCTAD’s Africa division, told the Reuters news agency the figure was likely an underestimate, citing data limitations. Tackling illicit flows is a priority for the UN, whose General Assembly adopted a resolution on this in 2018, and the report urges African countries to draw on the report to present “renewed arguments” in international forums.
This is the highest form of hypocrisy as the report failed to also mention the conspiracy of the western world in the historic and current degredation of the natural and human resources of the African economies. This report also failed to highlight the ignoble roles played by western countries in helping African leaders hide the loot that they have stolen from their various countries. Most of the looted money from African countries are domiciled in foreign bank accounts in the so called western world, I think if Africa is going to achieve it’s full potentials then the western world must stand up to be counted on the side of anti-corruption and not to be seen as aiding the very economic crimes they have accused African leaders of. These western countries can start by implementing policies that would make it difficult for African leaders to stash ill-gotten wealth in foreign bank accounts, these corrupt African leaders must be made to understand that there will always be severe consequences for theft of the commonwealth of their countries.