African Countries Losing Billions Through Illicit Financial Flows - Mbeki

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Former South African President has called for stronger government and financial intelligence institutions in the fight against illegal financial flows from Africa.
Speaking in Nairobi, Mr Thabo Mbeki, who heads the High-Level Panel on Illicit Financial Flows from Africa, said African countries also need closer collaborators and coordination in efforts to deal with the problem.
A report released by Mr Mbeki's team earlier this year shows that Africa loses in excess of US$50 to US$60 billion every year through illicit outflows.
Kenya on its part has lost an estimated Sh160 billion up to the year 2011.
According to Mr Mbeki, investigations carried out by his team have established that two thirds of the illicit outflows is a result of commercial activities which account for 60 per cent.
Criminal activities like trafficking in human beings, drugs, weapons among others come second accounting for 30 per cent of the illicit outflows.
Mr Dona Deya, the Chief Executive Officer of the Pan African Lawyers Union said corruption, however, though at 5 per cent, remains the overarching driver of illicit outflows.
Dr Adam Elhiraika, Director Macroeconomic Policy Division ECA said illicit outflows has damaging effects on African countries in terms of drainage of resources and tax revenues, stifling economic growth and socio economic development and weakening governance.
IFSs are also of concern to both developed and developing countries because of their implications for policy and legislation.
The sub-regional conference brought together stakeholders from the East, South and North African nations to discuss this complex issue following concerns that illicit financial flows from Africa are large and have been rising.
Among the meeting's findings was the need for closer monitoring of commercial routes of illicit outflows from the continent.
Another finding was that new and innovative means of generating illicit flows are emerging.
According to the stakeholder meeting, poor governance, weak regulatory structures and involvement in corruption by top government officials remains a challenge in the fight against the illicit practice.
Mr Mbeki who is also former chair of the African Union (AU) said there is universal consensus that the issue must be addressed.
"It's an African problem but the solution is global because these monies leave African to other countries," he said.
However, he said the burden to deal with the issue remains with the African countries.
"I am saying, therefore, that the biggest role is with us as actors within the continent to make sure we deal with this and cooperate even on the issues of repatriation of what has been stashed abroad," he said.
"As African nations, we shouldn't lose leadership on this issue because it is as important as the numerous development challenges that we are trying to address as a continent," he stated.
The High-Level Panel on illicit financial flows from Africa was created by the United Nations Economic Commission for Africa (ECA) and the African Union, (AU).

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