Africa lost over $862.6bn to illicit financial flows, says report
South Africa is the largest casualty, with more than $209 billion.Trade mis-invoicing and leakages in the balance of payment
have cost Africa more than $862.6 billion (€813.7 billion) from 2004 to 2013, according to ghanabusinessnews.com computations of data published by the Global Finance Integrity (GFI), a non-profit research organisation based in Washington DC that focuses on illicit financial flows.
According to the newspaper, this manipulation of trade figures is performed with the active connivance of the continent's political class.
South Africa is the largest casualty, with more than $209 billion, followed by Nigeria, which lost more than $178 billion during the period.
Economist Joseph Spanjers of the GFI told the newspaper that, "this staggering figure represents countless lost opportunities for domestic resource mobilization across Africa. Illicit financial flows drain not only potential public revenues, they also reduce domestic private sector investment as money instead flows offshore."
He added: "Countries can work together to stem these flows by implementing the automatic exchange of tax information, enacting beneficial ownership information, and strengthening cooperation across customs agencies to combat smuggling and trade mis-invoicing."
Historically, Africa is estimated to have lost in excess of $1.7 trillion in illicit financial flows over the last five decades.