Africa lost $800 billion in illegal transfers in recent years: UN

The UN reports that in the first 15 years of this century the unauthorized outflow of capital in Africa amounted to more than $830 billion; much of this is related to high-quality commodity movements, such as gold, diamonds and platinum, which undermine the capacity of the continent to provide services such as healthcare, education, and infrastructures. On Monday, the United Nations Conference on Trade and Growth concentrated on the topic of illicit movements of money or illicit moving properties across borders in its new annual report on economic development in Africa. In Africa, robbery, corruption and faulty invoicing have also been involved. 

Between 2013 and 2015, the data available for these outflows have averaged almost US$ 89 billion a year. By contrast, Africa received a combined total of USD 102 billion per year both for official development assistance and for foreign direct investment over the three-year period. Unlawful financial flows are stealing opportunities of Africa and its people, undermining transparency and accountability, and eroding trust in Africans, Secretary-General Mukhisa Kituyi of UNCTAD said. The agency said that between 2000 and 2015 the total illegal flight of capital from Africa amounted to USD 836 billion. 

The largest component of illicit capital flights from Africa was more than three-fourths of this number, with a total of 40 billion US dollars in 2015, in gold alone, followed by diamond and platinum, according to UNCTAD. It warned that the data were incomplete and that the true tale was possibly underestimated. 

According to UNCTAD estimates, illicit capital outflows from Nigeria, Egypt and South Africa represented more than four-fifths of the overall annually for the three-year period, with Nigeria alone contributing almost half. The agency has said that tearing down these illegal outflows could help African countries maintain investment capital for road, railway, school and healthcare. UNCTAD suggested that African countries are not necessarily doing enough to overhaul the international tax system and that local judicial authorities are also not properly prepared for fighting tax evasion.

Data Source: Business Standard