UN Discovers Illicit Money Flows from Africa, Close to $89bn

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In a study carried out by United Nations, it was discovered that Africa has lost $89billions in illicit financial flows including through tax evasion and theft, amounting to more than it receives in development aid.

The aforementioned estimate was made in the United Nations Conference on Trade and Development’s (UNCTAD) 248-page report, which is the most comprehensive for Africa today.

The report depicted an increasing trend over time and it is higher than most earlier estimates.

The report released on Monday, September 28 described Africa as a “net creditor to the world”, echoing economists’ observations that the aid-reliant continent is actually a net exporter of capital because of these trends.

“Illicit financial flows rob Africa and its people of their prospects, undermining transparency and accountability and eroding trust in African institutions,” said UNCTAD Secretary-General Mukhisa Kituyi.

Junior Davis, head of policy and research at UNCTAD’s Africa division said the figure was likely an underestimate, citing data limitations.

“Nearly half of the total annual figure of $88.6bn is accounted for by the export of commodities such as gold, diamonds and platinum, the report said. For example, gold accounted for 77 percent of the total under-invoiced exports worth $40bn in 2015, it showed.

“Understating a commodity’s true value helps conceal trade profits abroad and deprives developing countries of foreign exchange and erodes their tax base, UNCTAD said.

Combating illicit flows has been the priority for the UN, whose General Assembly adopted a resolution on this in 2018, and the report advises African countries to draw on the report to present “renewed arguments” in international forums.