The African Development Bank (AfDB) has revealed that the continent loses approximately $1.6 billion daily to illicit financial flows, profit shifting, and corruption. This staggering figure translates to $587 billion annually.
According to Kevin Urama, AfDB’s Chief Economist, Africa loses more than it receives through Foreign Direct Investment (FDI). Urama emphasized the need to focus on blocking the outflow of illicit funds rather than solely pursuing inflows.
Key Factors Contributing to Illicit Financial Flows:
- Corruption: Estimated annual loss of $248 billion
- Illicit financial flows: Over $90 billion annually
- Profit shifting by multinationals: Significant losses, although exact figures are unclear
Consequences and Solutions:
- The Nigerian Financial Intelligence Unit is working to address illicit financial flows and exit the Financial Action Task Force’s grey list.
- Strengthening institutions, accountability, and public service delivery are crucial in combating illicit financial flows.
- The AfDB has developed a Public Service Delivery Index to measure the quality of public services in Africa.
Source: Punch
