By
Maxwell Awumah, GNA
Hohoe (V/R), June 18, GNA – Illicit Financial
Flows (IFFs), continue to stifle Africa’s development architecture and this
translates into money and capital illegally transferred across the continent’s
borders now amounting to a loss of some $100 billion annually.
Professor Celestin Monga, Chief Economist and
Vice President, Economic Governance and Knowledge Management of the African
Development Bank (AfDB), said this to the Ghana News Agency on the efforts of
the Bank to stem IFFs against the backdrop of accelerating Africa’s
industrialization.
He said IFFs manifests in the form of money
laundering, tax evasion, trade mis-invoicing and abusive transfer pricing,
deployed by some multinational corporations, business entities, politicians and
individuals.
He said AfDB supports African countries to
fight against IFFs in undertaking risk assessments and building capacity of
anti-IFF personnel, such as investigators, prosecutors, judges and provides
help to national institutions that recover assets.
He said the Bank hopes the development of
appropriate national laws and policies to combat IFFs and the recently held a
capacity-building workshop on the role of Parliamentarians across Africa, would
help in this regard.
At the regional level, Prof Monga said the
Bank supports the Financial Action Task Force-style regional bodies such as the
East and Southern Africa Anti-Money Laundering Group, GIABA (West Africa), and
GABACC (Central Africa) to provide technical assistance to their members.
The Bank also provided a grant to the African
Tax Administrators Forum and the Collaborative Africa Budget Reform Initiative
(CABRI) to build the capacity of government officials in budgeting and tax
administration.
The Chief Economist said the Bank is also
participating in the Anti-Illicit Financial Flows Working Group coordinated by
the UN Economic Commission for Africa (ECA) to carry forward the
recommendations of the report of the former South African President, Mr Tambo
Mbeki Panel on IFFs.
“We have undertaken independent research and
have also collaborated with partners including Global Financial Integrity and
the OECD.”
Internally, the Bank has taken steps to
tighten its fiduciary safeguards and internal controls to ensure that its
lending is used only for its intended purposes.
Prof Monga said the AfDB’s establishment of
the Africa Integrity Fund (AIF) is in response to the challenges facing the
Bank’s Regional Member Countries (RMCs) in the fight against prohibited
practices and illicit financial outflows.
He said the AIF’s ultimate aim are to reduce
the prevalence and impact of prohibited practices and illicit financial
outflows in the Bank’s RMCs by strengthening core priorities, in particular
prevention, detection and investigation, and the sanctioning process, as well as
by supporting knowledge creation and dissemination.
The Chief Economist said the Bank Group
Strategic Framework and Action Plan for the Prevention of Illicit Financial
Flows from Africa established in 2017 highlights the general anti-IFFs
principles and standards of the Bank Group and outlining clear directions and
principles across four main areas, including internal control and safeguards,
assistance to RMCs, increasing collaboration with international partners, and
capacity building for staff.
Mr Ken Ofori-Attah, Ghana’s Minister of
Finance, said IFFs “remain the elephant in the room but the least talked
about.”
He said according to a Global Financial
Integrity statistics, about $ 170 Billion annually and over $ 1 trillion has
evaded Africa up to 2013 adding that “These gargantuan financial resources when
redirected into the economy of Africa would have a different narrative in terms
of infrastructural development even in the face of a $ 70 B infrastructural
deficit annually that eludes the continent.”
“This is more an African problem. The only way
we can resolve together is by working together with our partners.”
Mr Akingbolahan Adeniran, Rule of Law Advisor
to the Vice President of Nigeria, said there is the need to amplify advocacy
for the return of IFFs arguing that “In the domestic setting, receiving a
stolen asset is a crime. Why is receiving stolen asset from a victim country
not a crime?”
Nara Monkam, Research Director at the Africa
Tax Administration Forum, said inter-country cooperation at a continental level
is required to tackle such practices. In addition, given that illicit financial
flows from Africa involve actors from across the globe, and that the laws and
policies of non-African jurisdictions have a serious impact on illicit flows from
Africa, it has become a priority to review the adequacy of global frameworks in
tackling illicit financial flows.
African countries have committed themselves to
tackling these flows through target 16.4 of the UN Sustainable Development
Goals and the 2015 Special Declaration of the Assembly of the African Union on
Illicit Financial Flows.
GNA