Analysis

The escalating concentration of global extreme poverty is particularly pronounced in Africa, where the continent presently accounts for 55% of the total worldwide poverty. Reports indicate that these numbers are expected to rise due to the enduring impacts of climate change, the COVID-19 pandemic, and the conflict in Ukraine. As we hit the six-year mark before the designated milestone for achieving the Sustainable Development Goals (SDGs), it is apparent that African nations are still notably behind in making substantial strides toward the specific targets outlined in the SDG Agenda. Expanding upon the United Nations Millennium Development Goals (MDGs), which concluded in 2015, the SDGs underscore the commitment to addressing a broad spectrum of global challenges. The SDG Agenda tackles 17 pivotal development challenges, spanning areas such as poverty, health, gender equality, crucial aspects of economic growth, urgent global warming issues, social justice, and the promotion of peaceful and inclusive societies. Globally, there is a recognition that countries bear the primary responsibility for addressing systemic issues leading to revenue loss, and global cooperation is essential to supporting national efforts in achieving the SDGs. Within the African context, there have been calls to African leaders to address structural barriers impeding domestic resource mobilization as a key to the successful implementation of development projects aimed at enhancing the lives of African citizens. This is viewed as a sustainable solution to confront the severe and multidimensional nature of poverty in African nations, requiring concerted efforts from leaders to reshape policies that currently facilitate capital outflows.

Joining the new global rush for “Blue Gold” Uganda, a landlocked country, recently adopted its national blue economy strategy prepared with the support of the Africa Blue Economy (IGAD). From South Africa to Kenya or Cameroun, African countries, -as most States and regions around the world-, are encouraged to design Blue Economy frameworks, and other implementation toolkits, to grasp the economic opportunities offered by the extraordinary resources of oceans, seas, rivers, and lakes. As for Uganda, the Blue Economy concept is now extended far beyond the Oceans to cover all fresh waters as well as ground waters and associated resources. The African Union (AU) developed its Blue Economy Strategy from 2018 to guide sustainable development and the utilization of aquatic resources in the continent. It was endorsed, in October 2019, and is referred to in the strategic framework for the socio-economic transformation of Africa over the next 50 years, the ambitious Africa 2063. Promoted as the new gold for Africa, the Blue Economy is presented by the United Nations Economic Commission for Africa as a tool for “both coastal and land-locked States” to “harness opportunities, which could yield mutual benefits, including the provision of efficient and coordinated services to each other as well as access to resources”.

The evolution of IFFs as we understand it is intricately linked to the progress of technology. The case of cloud computing serves as a prime example of how advancements in tech can facilitate the growth of IFFs. The nexus between cloud computing and IFFs through transfer pricing presently remains an elusive subject due to a lack of substantiating data. This gap in data can be attributed to several factors: the opacity and complexity inherent in cloud computing transactions that span multiple jurisdictions; the intricate corporate strategies surrounding transfer pricing that are typically shrouded in confidentiality; and the swift pace of technological advancement that often outpaces regulatory oversight and data collection methods. Furthermore, stringent privacy laws protect corporate financial information, and the lack of a standardised global reporting framework complicates the task of monitoring and comparing financial flows.

Focusing on limiting IFF is a much better option for providing African countries with the necessary funds towards achieving Agenda 2063 and the United Nations Sustainable Development Goals. Realizing tax revenue from reducing IFFs may also reduce dependence on foreign aid. As African countries take the required steps to curb IFF, it is relevant to note that no single country can independently curb Illicit financial flows, especially from aggressive tax planning. Increasing financial transparency through consistent domestic policy implementation and international cooperation remains one of the most efficient channels to halt IFFs out of Africa.

Africa is unquestionably confronted with substantial development financing needs, which are further exacerbated by two independent, yet interrelated problems that are depleting the already scarce resources: illicit financial flows (IFFs) and a growing burden of unsustainable debt. To effectively tackle the complex challenges of Africa’s development; including achieving the SDGs, combating the effects of climate change, and resolving human rights issues; it is imperative to address IFF by promoting tax justice and to confront unsustainable debt through debt justice. Given the importance of establishing this link, this blog post delves into the challenges and nexus between IFF and unsustainable debt and provides high level policy recommendations.

In the last decade, there have been seven major leaks of financial documents in tax havens which have exposed the international web of financial flows, mechanisms to facilitate these flows and the major role players in these activities. In each leak, questions often arise on how both legal loopholes and illicit means are used to facilitate the outflow of funds from low- and middle-income countries to tax havens by corporations, wealthy individuals, and politically exposed persons (PEPs). These leaks are often the result of whistleblower-led investigations and the release of these financial documents has become a primary resource in understanding how financial corruption works globally. The effects of these leaks have seen heads of government sacked or resigned in some cases while little to no action takes place in other countries. However, what is undeniable is the role of whistleblowers is increasingly becoming central to curbing illicit financial flows (IFFs) especially as the global digital economy and stronger privacy-enhancing technologies make the detection of IFFs harder. Within Africa, very few countries have comprehensive national laws for whistleblowers despite the majority ratifying international agreements for the protection of whistleblowers. Using Nigeria, Kenya, and South Africa as case studies, this note reviews the regulatory landscape in the countries and the extent to which current laws and practices aid or hinder whistleblowing on IFFs.

There is no gainsaying the fact that Illicit Financial Flows (IFFs) constitute a major impediment to Africa’s sustainable development. In fact, IFFs have a direct impact on a country’s ability to raise, retain and mobilise its own resources to finance sustainable development. Its negative impact further includes draining a country’s foreign exchange reserves, reducing domestic resource mobilization, preventing the flow of benefits of foreign direct investment, and worsening insecurity, poverty and economic inequality.

Contributors to the symposium offer unique perspectives and draw on different theoretical and methodological approaches to the practice and scholarship related to IFFs in African states and beyond. Several themes were addressed by the contributors, including tax justice, technology, corruption, accountability, political will, repatriation, recovery of Assets, migration, whistleblowing, international investment, and real estate.

This review focuses on Chapters 1 and 7 of the book ‘Witness Protection and Criminal Justice in Africa: Nigeria in International Perspective’ by Suzzie Onyeka Oyakhire. The review reflects on specific aspects adopted in discussing witness protection and the complexities surrounding its practice in the Nigerian context as presented by the author.

Witness Protection and Criminal Justice in Africa: Nigeria in International Perspective’, by Dr Suzzie Onyeka Oyakhire, provides an important contribution to the processes aiming to establish witness protection concepts, legislation, and requisite structures for the Nigerian criminal justice system. As Oyakhire points out the challenges in institutionalising witness protection in Nigeria are abundant. For this reason, solid academic research such as her book, will be essential in assisting law makers in drafting a law that on one hand appropriately regulates how witness protection is applied at different stages of proceedings within the specific Nigerian legal, socio-economical, and cultural context and consciously considers what benefit international and national practices and standards could provide to the process on the other. Oyakhire’s caution against applying a ‘one size fits all approach’ and recommendation to be aware of the risk of importing ideas from abroad without due consideration to the national context is highly relevant. This is essential in trying to ensure that whatever system Nigerian authorities decide to implement, it must first and foremost be appropriately adopted to respond to national needs. Some principles for practical implementation of witness protection measures, such as how to mitigate risks through prevention, deterrence, and avoidance, will be similar regardless of the geographical location but finding the appropriate solution to these practical challenges will need to have a local flavour.