• Live
    • Audio Only
  • google plus
  • facebook
  • twitter
News > South Africa

UN: Africa Losses $88.6 Billion Every Year in Illegal Money

  • Mining, telecommunications and the digital economy are among the most vulnerable sectors to illicit financial flows.

    Mining, telecommunications and the digital economy are among the most vulnerable sectors to illicit financial flows. | Photo: EFE/EPA/ Kim Ludbrook

Published 28 September 2020
Opinion

The organization estimates that from 2000 to 2015 the total illicit capital flight reached $836 billion.

The United Nations revealed on Monday that Africa is losing almost $88.6 billion a year in illicit financial flows, and the amount surpasses what the continent receives in developing aid.

RELATED:

WHO Plans to Prioritize Africa in Future Vaccination Programs

According to a report by United Nations Conference on Trade and Development (UNCTAD), the illicit financial flows are "movements of money and assets across borders which are illegal in source, transfer or use."

The $88.6 million represent about 3.7 percent of Africa's gross domestic product (GDP). "Illicit financial flows rob Africa and its people of their prospects, undermining transparency and accountability and eroding trust in African institutions," UNCTAD Secretary-General Mukhisa Kituyi said.

The report highlights that mining and telecommunications and the digital economy are among the most vulnerable sectors to illicit financial flows. Furthermore, the UNCTAD explains that these outflows "include illicit capital flight, tax and commercial practices like mis-invoicing of trade shipments and criminal activities such as illegal markets, corruption, or theft."

The organization estimates that from 2000 to 2015, the total illicit capital flight reached $836 billion. The illicit financial flows represent "a major drain" on capital revenue in Africa as it jeopardizes its prospects of achieving Sustainable Development Goals.

In this sense, the report reveals that "in African countries with high illicit financial flows, governments spend 25 percent less than countries with low illicit financial flows on health and 58 percent less on education." Women and children are the most damage because of the inequality in access to these services.

On the other hand, UNCTAD warns that due to the lack of domestic transfer pricing rules in most African countries, local judicial authorities lack the tools to challenge tax evasion by multinational enterprises, which is one of the most significant causes of illicit financial flows.

  

Comment
0
Comments
Post with no comments.