Africa’s Finance and Development Ministers want national financial intelligence units strengthened as one of the operative actions of curtailing illicit financial flows from the continent.

The Ministers were meeting in Lilongwe, Malawi on March 29 and 30, 2010 ahead of the third joint annual meeting of the African Union (AU) and said that the units are responsible for improving the collection of statistics on financial flows.

During the session on illicit financial flows and regulatory models, experts also tackled financial integrity issues and the e-economy regulatory models.

John Rwangobwa, Rwanda’s Finance and Economic Planning Minister said African countries agreed to coordinate and have a strong legal framework, especially on the Anti-money laundering laws.

"African countries need to act proactively to stop the continent from being a base of illicit financial flows,” he said.

Participants exchanged ideas on how to address the phenomenon and its devastating impact on development prospects, the Ministers added.

According to the Governor of the National Bank of Rwanda (BNR), Rwanda is set to establish a national Financial Intelligence Unit by end June this year following the establishment of the anti-money laundering law.

"A draft of the Presidential Decree is finalized and the Ministry of Internal Security will present it to the cabinet. Hopefully , by end June the unit should be established,” Kanimba said.

He added that with less than ten cases of suspected transfers that were presented to the Prosecutor General’s office, illicit financial flows in Rwanda are not high.

The Director of the Economic Commission for Africa Governance and Public Administration Division, Dr. Abdalla Hamdok said up to 65 percent of the financial flows from Africa take  place through fraudulent channels. They include tax evasion, mispricing trade and criminal activities such as money laundering.

He added that the illicit transfers are facilitated by a global shadow financial system which costs developing countries  between $850 billions and a trillion US$.

Leonce Mdikumana, the head of ADB Research Department said that illicit financial flows from Africa are worth 98% of what is needed to achieve the growth rates required to attain the Millennium Development Goals (MDG).

"These illicit flows are also the double of what the donor countries have pledged at the G8 Summit in Gleneagles.”

Ends