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The Executive Secretary of UN Economic Commission for Africa, (ECA) Vera Songwe, said that combatting bribery, money laundering and tax evasion should be a priority if Africa has to finance its transition to middle income status and increase prosperity.
Songwe was speaking in a two-day African Leadership Forum 2018 last week in Kigali, a meeting hosted by President Paul Kagame of Rwanda, and convened by Benjamin Mkapa, former President of Tanzania. The Forum was attended by other former Heads of states: Olusegun Obasanjo former president of Nigeria, Mohamed Moncef Marzouki former president of Tunisia, Joaquim Chissano and Armando Guebuza former presidents of Mozambique.
In the last three decades to 2009, Africa has lost an estimated close to $ 1.4 trillion. In addition, losses through non-trade channels averaged an estimated $27 billion annually between 2005 and 2014.
According to the report of President Mbeki’s high-level panel on illicit financial flow, the Continent loses between $50 billion and $80 billion a year due to illicit financial flows.
Songwe called governments to take action on several fronts, and she insisted leadership was critical demonstrative effect important. As such governments should aggressively investigate and prosecute money launderers and companies that evade taxes.
What things can countries do on their own?
UN estimates that the amount Africa loses through illicit financial flows is roughly double the Official Development Assistance that Africa receives, and also outweighs the $42 billion that the continent received in Foreign Direct Investment in 2017.
“For a continent that needs substantial financial resources to meet its development needs, we should celebrate our accountability agencies, the auditor general, the chief justice and the media to support the collective effort”, said Songwe. She asked for more integrity and transparency among leaders and officials of the public and private institutions through asset declarations; and urged African countries to sign up to the international tax information treaties to enable exchange of information.
“Countries should also build human and technological capacities of agencies tasked with tackling Illicit financial flows, and institute information sharing and collaboration between relevant government agencies and ministries”, she said.
Vera Songwe also applauded countries that have ratified existing global and continental initiatives on halting Illicit financial flows.