Ghana loses $3.1b to illicit financial outflows in ten years – Report

A new report tracking illicit financial flows (IFFs) has revealed that Ghana lost at least $3.1 billion to the canker in a decade.

The period spanned from 2002 to 2011.

Published December 12, 2013 by the Global Financial Integrity (GFI), a Washington-based research and advocacy organization, the report “Illicit Financial Flows from Developing Countries: 2002-2011” could not trace how much was siphoned out of Ghana from 2002 to 2006.

The report is GFI’s 2013 annual update on the amount of money flowing out of developing economies as a result of crime, corruption and tax evasion.

However the report recorded that $37 million and $374 million left the shores of Ghana as IFF in 2007 and 2008 respectively.

But the country’s illicit flows ballooned to approximately $1.3 billion in 2009 and eased to $721 million in 2010, according to the GFI report.

The GFI couldn’t emphatically indicate what caused the higher IFFs recorded in 2009 but in general, noted that these moneys were lost due to corruption, tax evasion and crime.

The GFI reported a further drop of IFF in 2011 which amounted $691 million.

On the average, Ghana lost an amount of $316 million to illicit flows.

Ghana was ranked 92nd out of 144 nations as the country with largest illicit financial outflows.

The report noted that cumulative illicit financial outflows from developing countries amounted $5.9 trillion between 2002 and 2011.
The outflows increased at an average rate of 10.2% per year over the decade—significantly outpacing GDP growth, it added.

As a percentage of GDP, the GFI said Sub-Saharan Africa suffered the biggest loss of illicit capital. Illicit outflows from the region averaged 5.7% of GDP annually. Globally, illicit financial outflows averaged 4% of GDP.

According to the report, China is leading the world over the 10-year period with $1.08 trillion in illicit outflows.

“As the world economy sputters along in the wake of the global financial crisis, the illicit underworld is thriving—siphoning more and more money from developing countries each year,” said GFI President Raymond Baker.

Mr Baker observed anonymous shell companies, tax haven secrecy, and trade-based money laundering techniques drained nearly a trillion dollars from the world’s poorest in 2011, at a time when rich and poor nations alike are struggling to spur economic growth.

By Ekow Quandzie