Ghana faces massive losses from Illicit Financial Flows - Economist

Ghanaian journalists have been urged to advocate and mobilise the citizens to fight against Illicit Financial Flows (IFFs) and increase investment flows into the country.

Dr Bishop Akologo, an Economist, who made the call, stressed that Ghana was losing billions of dollars to the IFFs annually, through corruption, bribery, poor contracting and investment.

The situation poses significant challenges to the country’s development and financial governance, the economist explained.

“Illicit financial flows rob us of development,” Dr Akologo, who is also the Executive Director of Technology Integration Point Ventures (TIPV) said, adding that schools, clinics and the roads that we could have built with monies that have leaked out, we have lost all of that, and it leads to underdevelopment and increases inequality.”

Speaking in Bolgatanga during a two-day capacity training workshop for selected journalists in the Upper East Region on IFFs in Ghana, Dr Akologo underscored the potential role of journalists in raising awareness among citizens and investigating illegal activities to help curb the menace.

Organised by the Media Foundation for West Africa (MFWA) with funding support from Oxfam and the Ministry of Foreign Affairs of Denmark, the training aimed to enhance knowledge and raise awareness about Illicit Financial Flows (IFFs) and equip journalists with the relevant knowledge and skills needed to effectively report on the impact of IFFs on revenue mobilisation in Ghana.

The training was to further enhance the capacity of journalists to effectively track and monitor impact of government policies and responses to reducing illicit financial flows, and how to investigate and report on IFFs in Ghana effectively.

IFFs are illegal financial transfers or movements of money across borders that contravene national and international laws and these could include corruption, illegal mining, money laundering, tax invasion, trade mispricing, conflict financing, among others.

These activities contribute to hampering economies’ ability to mobilise the needed revenue for sustainable development, leading to continuous borrowing and widening inequality among the poor and the beneficiaries of the illegal activities.

For instance, the Global Financial Integrity report indicated that in 2015 alone, Ghana lost over US$3 billion through illicit financial flows in trade and mis-invoicing out of a US$ 9 billion export and import with developed countries.

The report further indicated a US$ 758 million loss in imports through over-invoicing, US$ 722 million imported through under-invoicing, US$ 117 million to export through over-invoicing and US$ 1.6 billion to export through under-invoicing.

“A few of us who are able to enjoy IFFs, increase our capacity to the detriment of those who are not able to participate in this illegal economy…so the media needs to build its own capacity, understand the issues to do independent analysis to help raise awareness.

This will help to mobilize citizens to put pressure on duty bearers to do the right thing and do due diligence on all investments to ensure that we get the best value for our resources,” Dr Akologo stressed.

Dr Akologo stressed that activities of IFFs were more pronounced in the natural resources sector particularly in the mining sector and called for the review of mining contracts to ensure the country benefitted appropriately from its natural resources.

Mr. Benaiah Nii Addo, Executive Director, Green Tax Youth Africa, said tax invasion and injustice had been one of the major factors of IFFs in Ghana and called for strong political will to expand the tax net and ensure fair tax system that encouraged more people and institutions to honour tax obligations willingly.

Mr. William Nlanjerbor Jalulah, Programme Officer, MFWA, believed that the training would contribute to addressing the knowledge gap on illicit financial flows and whip up interest of journalists for effective reportage against IFFs.

“The MFWA is convinced that independent and data-driven media reportage will not only expose IFFs, tax manipulation, but also address inequalities in the country,” he added.