UN says Africa loses US$100 billion annually through illicit financial flows

Money illegally transferred across borders as well as aggressive tax avoidance causes a loss of US$100 billion annually for African states according to the deputy executive secretary of the UN Economic Commission for Africa (ECA), Abdalla Hamdok.

He was one of several experts speaking at the recent ECA Conference of Ministers about the need to stem illicit financial flows both within and, as is frequently the case, out of Africa.

African problem

“I think the debate is not about the seriousness of the issue. The challenge is how we can arrest it,’ Hamdok told delegates.

“This is an African problem. The only way we can resolve this is by working together with our partners,” he added.

Multinationals misinvoicing

Research director at the Africa Tax Administration Forum, Nara Monkam, was more forthright about the way money is siphoned out of Africa.

“Some multinational corporations employ tax evasion, trade misinvoicing and abusive transfer pricing,” she said.

Global action

Monkam is calling for inter-country cooperation at a global level to tackle such practices.

Given that illicit financial flows from Africa involve actors from across the globe, and that the laws and policies of non-African jurisdictions have a serious impact on illicit flows from Africa, it has become a priority to review the adequacy of global frameworks in tackling illicit financial flows, Monkam said.



Categories: Trade Based Financial crimes News