Business News of 2013-12-04

Illicit Financial Flows is a major problem for Africa

Madam Irene Ovonji Odida, Action Aid International Board Chairperson on Tuesday said Illicit Financial Flows (IFF) is a major problem for Africa as many African countries lose billions of funds annually through the anomaly.

She defined IFF as funds that are illegally earned, transferred or utilised, especially in a transnational context, adding that records on such funds usually disappear from country of origin.

She said IFF is an African problem with a global solution; hence the need for Africa and the receiving countries to play critical roles in addressing it. Madam Odida made the remark in an interview with Ghana News Agency on the sideline of the High Level Panel on IFF from Africa Regional Consultation for West and Central Africa Regions in Accra.

She noted that IFF drains the continent of much needed financial resources for economic growth, structural transformation, socio-economic development and poverty reduction. She said from 1970 to 2008, Africa lost an estimated sum of $ 854 billion through IFF with an annual average of $ 22bn.

Madam Odida said IFF comprises tax evasion, money laundering, counterfeiting, drug trafficking, theft, bribery and other forms of corruption by government officials. She said IFF are taken from the continent to the United States, Canada, the European Union and recently to emerging economics like China and India.

Madam Odida said IFF thrives well where there lack of information flow; declaring that the drivers of the anomaly include micro economics, structural and governance. She said in order to address the issue of IFF; there is the need for active collaboration of states at both the national and global levels.

Madam Odida, who is also a member of the IFF High Level Panel (HLP) said the objectives of the HLP is to determine the nature and patterns of IFF, establish the level of IFF from Africa and to propose policies and mobilise support for practices that would reverse the IFFs.

She said the project would in the end improve regional and national levels to better understand IFFs and how to combat it, and also increase technical and expertise on IFFs.

Mr Bernard Anaba of Integrated Social Development Centre - Ghana said it is good that the issue of IFF is being given a high level attention by the African Union. He said the continent is losing so much through IFF than it is receiving from the outside world in terms of aids and grants put together.