Impact illicit financial flows in Africa flagged

The US-Africa Summit set for later this year will enable African leaders and their US counterparts to deliberate on issues of concern, including illicit financial flows (IFFs) which remain the major challenges facing developing economies, particularly in mineral-rich Africa. In an analysis on the IoL site, Mikatekiso Kubayi and Odilile Ayodele note that one of the greatest hindrances to Africa’s stability and long-term development prospects are IFFs. Africa loses about 3.7% of its GDP, which is approximately $88.6bn annually. ‘This money could easily have been used to finance at least half of what is necessary to meet the Sustainable Development Goals. But Africa cannot deal with these challenges alone as corruption does not operate in a vacuum. Politically connected enablers, practically impenetrable trust accounts are all part of the global ecosystem that allows for the outflow of money from vulnerable states,’ the authors note. They point out that the subversion of state resources, including development assistance, and the crippling of state institutions cannot continue unabated, particularly as the world teeters towards a possible global recession. 'Reform of the global financial architecture would make it harder for individuals and corporations to benefit from porous frameworks and apparent indifference to corruption. African countries need to tighten internal controls and leverage external partnerships to curb IFFs and ensure stable and sustainable economies.'