Africa said to have lost over $1.7 trillion to illicit financial flows in 50 years

RemittancesIllicit financial flows, noted as one of the means of siphoning much-needed funds for development in Africa has reportedly cost the continent an amount in excess of $1.7 trillion in 50 years.

According to the Minister of Finance and Economic Planning of Rwanda, Claver Gatete, illicit financial flows should be a source of concern to the continent, especially as access to finance and capital was a key constraint to growth and economic development.

Gatete noted, in a press release copied to, that over the last 50 years, Africa had lost in excess of $1.7 trillion to illicit financial flows, adding that the amount roughly equalled all the official development assistance the continent received during the same period.

The menace of illicit financial flows from Africa in general is a major source of leakage of funds. The continent is losing an estimated $50 to $60 billion a year, making the need to initiate a more purposeful effort at curbing the flows more urgent than ever.

Mr. Gatete, who was speaking at the opening of the third Annual Customer Due Diligence and Corporate Governance Forum of the African Export-Import Bank (Afreximbank), indicated that the illicit activities have significant implications for growth and economic development and for the financial soundness of banks and corporates, adding that they undercut legitimate economic activities, discouraged investment, bred suspicion and undermined government legitimacy.

He therefore, urged African financial institutions, regulatory bodies and governments to work together to establish mechanisms that would ensure a healthier financial landscape and help prevent financial crimes as well as strengthen investors’ confidence on the continent.

Dr. George Elombi, Afreximbank Executive Vice-President in charge of Corporate Governance and Legal Services, in his presentation, announced that Afreximbank was preparing to launch an online African Customer Due Diligence Repository Platform to provide a centralized source of primary data required to conduct customer due diligence checks on African counterparties.

“That platform would allow subscribers to conduct due diligences at a low cost, thereby decreasing the cost of trade finance in Africa,” he said.

By Emmanuel K. Dogbevi
Copyright © 2016 by Creative Imaginations Publicity
All rights reserved. This news item or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in reviews.

Leave A Reply

Your email address will not be published.