Johannesburg - Africa loses $50-billion a year due to illicit financial outflows from the continent, former South African president and chairman of the African Union High Level Panel on Illicit Financial Flows Thabo Mbeki said on Thursday.
Mbeki’s report pointed to governments in Africa and multi-national corporations colluding through corrupt activities crafted to avoid tax payments, to the detriment of some of the countries.
“In the past 50 years, Africa has lost $3-trillion due to illicit financial flows. Corruption remains a major concern despite global and regional adoption of measures to combat it,” Mbeki told the Pan African Parliament sitting in Midrand, Johannesburg.
“Corruption is a cross cutting and integral part of illicit financial outflows because of its facilitating role.”
Mbeki added that criminal activities such as drug-trafficking accounted for 30 percent of illicit financial outflows.
He said there was no global structure to stop illicit financial activities. The number of regional efforts were not effective, and thus stamping of outflows should fall under the auspices of the United Nations.
Mbeki also said that most African countries lacked capacity, legislation and guidelines to fight the outflows.
“Our countries do not have accountants, lawyers and tax experts to punish those who practice this. The few who are available are unable to sufficiently take on the top class professionals,” he said.
There was a lack of up-to-date information and data and understanding of how illicit financial outflows worked. The continent needed the support and help of the global community.
“This report details the extent of work we, as Africans, should do to stop illicit financial outflows. There is a need to strengthen existing institutions to be independent in executing their mandate and also recruiting and training top personnel.”
A campaign called “Stop it, Track it and Get it” has been launched to stop these crimes and recover the monies that landed across the world.
Mbeki said African economic ministers identified the need to investigate the continued financial crimes and set up a panel to investigate and make recommendations. The panel started its work in 2012, and submitted a report to the AU in January this year.
ANA