African governments should invest more resources in the fight against illicit financial flows as one of the ways to support development efforts in the bloc. Dr Aida Opoku-Mensah, a senior adviser to the UN Economic Commission for Africa executive secretary, said the challenge of illicit financial flows hinders sustainable development on the continent. According to the experts there is need to have strong legislations and tax institutions with capacity to detect and stop illicit flows across the continent. A 2016 report estimates that Africa is losing at least $50 billion annually through illegal transactions. Some reports suggest the continent could have lost up to $1 trillion in the past 50 years through illegal cash flows. Opoku-Mensah, who was speaking during the 5th Pan African conference on Illicit financial flows in Nairobi Kenya last week, said Africa has “no choice but to put in place strong measures to deter illicit financial flows from the continent”. “Africa must take a common position to tackle illegal money transfers from the continent,” she said during a workshop organised by Tax Justice Network. It brought together over 800 tax experts, policy-makers and members of the civil society to unite against the increasing illicit financial flows which have increasingly become a big challenge on the continent. Opoku-Mensah cautioned that the practice is facilitated by some state officials across the continent. ”So we need to identify those in government that are helping multinational companies to siphon money from the continent using illegal means,” he said. He also urged governments to invest more resources towards lifting millions of Africans out of poverty to help drive development aspirations of the African people. Commenting about the issue on Friday, Herbert Gatsinzi, the senior partner at Tax Sense Rwanda, said there is need to develop strong legislations to enable revenue authorities and other implementing agencies to detect and deter entities involved in tax avoidance. “Equally, governments must ensure they build capacities for the implementing agencies to better understand the complex structures some multinational enterprises use to support illicit financial flows,” he told The New Times. Gatsinzi called for unrelenting efforts to fight the malpractice and crackdown on the corrupt. Undermining resource mobilisation According to Alex Coblham, the Tax Justice Network chief executive, aggressive tax avoidance has played a significant role in undermining domestic resource mobilisation efforts in Africa. This, he said, must remain a core to the anti- Illicit financial flow agenda for the continent to achieve sustainable economic development. In a recent interview with The New Times, the Minister for Finance and Economic Planning, Amb Claver Gatete, said financial crimes remain one of the greatest threats to corporates and governments around the world. “Money laundering, bribery, fraud, and tax evasion are some of the financial crimes that continue to exert a dampening effect on the global economic and financial space, undermining sustainable economic development,” he said. Speaking at the Nairobi event, Dr Peter Rene N’Guerttia, the director for economic affairs at the African Union Commission, called for concerted efforts in the fight against money laundering, tax evasion and international bribery, saying these make up the bulk of Illicit cash flow.
