· According to UNCTAD’s just launched Economic Development in Africa Report 2020, plugging the illicit capital flight could cut into half the annual financing gap of $200 billion that Africa faces to meet the Sustainable Development Goals.
· Report points out that Africa loses an estimated $88.6 billion, equivalent to 3.7% of Africa’s GDP, through the illicit capital flight.
According to UNCTAD’s just launched Economic Development in Africa Report 2020, plugging the illicit capital flight could cut into half the annual financing gap of $200 billion that Africa faces to meet the Sustainable Development Goals. The UNCTAD Report points out that Africa loses an estimated $88.6 billion, equivalent to 3.7% of Africa’s GDP, through the illicit capital flight. The illicit capital flight includes, tax and commercial practices like mis-invoicing of trade shipments and criminal activities such as illegal markets, corruption or theft.
The report entitled “Tackling illicit financial flows for sustainable development in Africa”
further elaborates that these outflows are almost equal to the combined total annual inflows of official development assistance, valued at $48 billion, and annual average foreign direct investment of $54 billion, received by African countries for 2013 to 2015.UNCTAD Secretary-General Mukhisa Kituyi lamented that the Illicit financial flows robbed Africa and its people undermining transparency and accountability and eroding trust in African institutions.
UNCTAD reported that between 2000 to 2015, the total illicit capital flight from Africa stood at $836 billion against its total external debt stock of $770 billion in 2018.Export of extractive commodities ($40 billion in 2015) are estimated as the largest component of illicit capital flight from Africa. The capital flight has drained the continent and its capacity to meet the Sustainable Development Goals (SDGs). It has concluded that with existing government revenues and development assistance Africa will not be able to bridge the large financing gap to achieve the SDGs. The Report further adds that curbing illicit capital flight could generate enough capital by 2030 to finance almost 50% of the $2.4 trillion needed by sub-Saharan African countries for climate change.
The report throws light on how to identify and evaluate risks associated with IFFs, as well as solutions to curb IFFs and redirect the proceeds towards the achievement of national priorities and the SDGs. The Report also urges for global efforts to promote international cooperation to combat IFFs.
