Financial crime and poor trade finance provision undermining Africa’s growth

Illicit financial flows, money laundering and the withdrawal of banks from the trade finance market in Africa are undermining the continent’s economic development and structural transformation according to senior politicians and bankers.

Addressing the third Afreximbank Due Diligence and Corporate Governance forum in Rwanda, the host country’s minister for finance and economic planning, Amb Claver Gatete, also said that financial crime remains one of the greatest threats to corporates and governments around the world.

Financial crimes

“Money laundering, bribery, fraud, and tax evasion are some of the financial crimes that continue to exert a dampening effect on the global economic and financial space, undermining opportunities for sustainable economic development,” Gatete told delegates.

Illicit financial flows have remained significantly high he added. The African Union estimates that the continent is losing over US$50 billion annually in illicit financial flows.

Trade finance concerns

Executive vice-president in charge of corporate governance and legal services at Afreximbank, George Elombi, told delegates that the withdrawal of global banks from the African trade finance space poses a serious challenge to Africa’s financial industry.

The forum called for closer cross-border co-operation and collaboration among regulators, financial institutions and corporates to build robust customer due diligence and good governance systems.

Categories: Trade Based Financial crimes News

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