Sudan annually loses about US$5.4b in illicit financial flows

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July 7, 2021 (KHARTOUM) – Sudan loses about US$5.4 billion in illicit financial flows (IFFs) every year, according to a report prepared by a team of African and United Nations Economic Commission for Africa on Wednesday.

“Combating Illicit Financial Flows in Sudan” was discussed in a workshop held in Khartoum on Wednesday with the participation of Prime Minister Abdallah Hamdok and a number of senior officials.

During 30 years, the isolated regime of former President Omer al-Bashir, the illegal movement of money from or to Sudan, and other illegal activities, including tax avoidance, abusive profit-shifting, trade mis-invoicing, human and drug trafficking, corruption, were inherent in the system.

The transitional government with the support of the international community established a number of dispositions to curb the IFFs within a comprehensive plan to reform the economic system in the country.

The report, seen by the Sudan Tribune, says that Illicit financial flows cost Sudan $5.4 billion annually.

It further pointed out that the gap in Sudan’s global trade transactions during the years 2012-2018 amounted to $30.9 billion, equivalent to 50 per cent of Sudan’s total trade during these years.

The report stated that the loss of government revenues from taxes and duties amounted to 5.7 billion dollars.

“Sudan said it received $4.8 billion from oil exports while trading partners declared payment of $8.9 billion for their oil imports.”

In his speech at the workshop, Hamdok stressed that his government is committed to “monitoring and screening illegal financial flows and recovering the looted and smuggled funds to achieve development and stability of the country.

He further called to combine internal and external efforts must be combined to create a healthy investment environment, and establish a national mechanism cooperating with civil society groups, to ensure transparency.

The report stressed that corruption and illegal financial flows exist in all sectors of the Sudanese economy and at all levels.

Accordingly, it recommends that combating illicit financial flows requires a comprehensive reform in the financial, tax, customs, justice, and security sectors.

The report pinpointed that the lack of transparency, especially in the gold and foreign trade sectors, led to the depletion of foreign exchange, the reduction of domestic resources, the destabilization of the overall economy, and the exacerbation of poverty and inequality.

The report stressed that corruption and illegal financial flows exist in all sectors of the Sudanese economy and at all levels.

Accordingly, it recommends that combating illicit financial flows requires a comprehensive reform in the financial, tax, customs, justice, and security sectors.

The report pinpointed that the lack of transparency, especially in the gold and foreign trade sectors, led to the depletion of foreign exchange, the reduction of domestic resources, the destabilization of the overall economy, and the exacerbation of poverty and inequality.

“This indicates massive under-reporting, and taxes evasion,” further stressed the report.

(ST)

Source: sudantribune