Africa loses $60bn annually through illicit financial flows – Mbeki

A former South African President, Mr Thabo Mbeki, on Sunday in Abuja said African countries lose between 50 billion dollars and 60 billion dollars annually through illicit financial flows (IFF).  Mbeki said this while presenting the Progress Report of the High-Level Panel on IFF at the ongoing 7th AU-ECA Conference of Ministers of Economy and Finance.  Mbeki was the Chairman of the panel set up by the Economic Commission for Africa (ECA) in 2012 to look into the nature of illicit funds in the continent.  He said the huge sums did not include capital flight, saying it came from proceeds of commercial transactions through multinational companies, criminal activities and corruption.

The former South African president lamented that the monies which would have been used to provide infrastructure and social amenities for the poor African population were transferred to other countries.  “Consequently, this left the continent in poverty,’’ he added.  Mbeki said the situation was occasioned by the weakened tax regime of some countries in the continent, adding that proper mechanism needed to be put in place to check the trend. “In terms of the phenomenon of mis-pricing, the estimates are between 50 and 60 billion dollars which the continent loses as illicit financial flows, with capital flight not included.

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