The African continent lost $830 billion through illegal outflows of capital in the first 15 years of the 21st Century, the United Nations Conference on Trade and Development (UNCTAD), said in its annual report on economic development that has just been released.
The United Nations’ agency said in the report that on the issue of illicit financial flows, or illegal movements of money and assets across borders, which has often involved theft, corruption, and flawed invoicing of shipments, that total illicit capital flight from Africa between 2000 and 2015 amounted to $836 billion.
According to the report, much of the illegal deals are linked to movements of high-value commodities like gold, diamonds and platinum, which have often strained the ability of the continent’s governments to provide services such as healthcare, education, and infrastructure.
“The largest component of illicit capital flights from Africa, totaling $40 billion in 2015, was related to “extractive commodities” more than three-fourths of it in gold alone, followed by diamonds and platinum,” UNCTAD stated.
It stated that from 2013 to 2015, the last year for which data was available, outflows rose to nearly $89 billion a year on average while the combined total of both official development assistance and foreign direct investment received by Africa during that three-year span averaged $102 billion annually.
UNCTAD estimates also revealed that Illegal capital outflows from three countries — Nigeria, Egypt and South Africa accounted for more than four-fifths of the total annually during that three-year span (2013-2015), with Nigeria alone making up nearly half. The agency however remarked that the data was incomplete and the figures were likely an underestimate of the true tally.
Mukhisa Kituyi, UNCTAD Secretary-General noted that Illicit financial flows rob Africa and its people of their prospects, undermining transparency and accountability and eroding trust in African institutions.
He stated that African countries generally haven’t done enough to reform the international tax system in ways that could help. He noted that local judicial authorities often lack proper tools to combat tax evasion.
UNCTAD suggested that cracking down on such illegal outflows could help African countries retain capital for investment in roads, railways, schools, and healthcare.