African Union High Level on Illicit Financial Flows from Africa

Some of the core objectives of FfD4 are enabling a renewed global financing framework that is underpinned by a commitment to multilateralism and collective action and aligned with national priorities. The African context is especially disadvantaged regarding barriers to meeting these objectives because the political elite, who set the said national priorities and spearhead ‘collective action’, is at the forefront of perpetuating illicit financial flows. The Pandora papers and similar exposés have revealed that African leaders are often at the forefront of illicitly hiding money abroad and moving it around illegally. This creates a paradox, as the very individuals responsible for driving meaningful progress in addressing illicit financial flows are frequently the biggest impediments to such efforts. Peter Ekeh’s concept of the ‘two publics’ provides a compelling theoretical framework for understanding this dynamic.

This webinar explores the critical issue of illicit financial flows (IFFs) and their impact on poverty and vulnerability. IFFs significantly undermine efforts towards sustainable development by diverting resources away from public services and infrastructure, exacerbating economic inequality, and perpetuating cycles of poverty. Expert speakers from diverse fields, including academia, policy-making space, and private practice, will explore the mechanisms through which IFFs operate and their detrimental effects on economic stability and social equity. A webinar presented by the IBA Poverty and Social Development Committee, supported by the IBA Asset Recovery Committee and the IBA African Regional Forum. Supported by Afronomicslaw, and Schulich School of Law of Dalhousie University, Halifax, Nova Scotia

It is common knowledge that several African economies have a nagging public debt burden. However, in real terms, outside of Oceania, Africa has the lowest public debt in the world. The challenge with Africa is that most of its debt is owed to non-African creditors and the debts are contracted in foreign currency thereby exposing African countries to currency volatility. Another challenge is that these non-African creditors consider the African market as risky, thereby charging higher interest on our loans. While African countries are struggling to finance public debt which ordinarily should be within the capacity of African economies to accommodate, it is estimated that Africa loses about $140 Billion annually to corruption.

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.