Strategies to help prevent Illicit Financial Flows in Africa

Illicit Financial Flows

Even with immense Covid-19, there are concerns that the scale and scope of Illicit Financial Flows (IFFs) could be on the rise. While the authorities are busy focusing on the Coronavirus, the Media, Civil Society Organisations (CSOs), trade unions, academia and researchers should be focusing on exposing Illicit Financial Flows.

A multi collaboration between CSOs, Media and other key players, would help reduce the frequent attacks on civil society organisations. These attacks are equally holding back development progress in Africa. While those in the private sector expect a fair, clear and transparent tax and trade policies, they must do their part by ensuring their tax and trade practices comply with local laws.

Illicit Financial Flows are a significant threat to Africa’s Sustainable Development Goals (SDGs). It has slowed and destroyed the progress of African countries’ economies and contributed to the increase of insecurity and inadequacy to raise tax revenues.

Most developing African countries do not maximize the use of domestic resources not because they lack them, but due to the significant levels of Illicit Financial Flows that have reduced the ability to raise the required tax revenues. But with the help of trade union leaders, they will track trends and patterns of illicit financial flows leaving Africa, gather and disseminate the main findings of the report on the high-level panel on flows from Africa.

Otherwise, the Sustainable Development Goals in African developing countries is at risk. IFFs have posed multiple threats on SDGs agenda by consuming the much-needed tax base for public investment and social spending.

Instead of working towards achieving SDGs in Africa; reduce the continent’s $31 billion infrastructure financing gap, youth unemployment and tackle climate change, governments are continually using domestic savings that could help replenish our infrastructure systems.

Which the media is always reluctant to expose, but a collaboration from the media will help expose companies and individuals who practice tax evasion and avoidance. All we see today is African countries struggling in poverty, governments fighting against each other, and an increase in inequality and rent-seeking rather than maximising the use of domestic resources for productivity.

Civil Society Organisations (CSO) have a role to play as advocates to increase transparency around revenues and expenditures, as well as to monitor the behavior of public and private officials. CSOs are mandated to voice the call for accountability of governments hence exposing the extent of IFFs. They should also promote a coherent approach to legislation on financial matters.

ALSO READ: International Tax Justice Academy 2020; Advocating For Tax Justice In Africa

Illicit Financial Flows are destroying our African nations; threatening not only banks and financial intelligence units but also legal mechanisms for detecting and prosecuting perpetrators of illicit financial flows. IFFs leave us desperate for external aid, putting our continent in the light for exploitation and yet we have the resources to build Africa and even supply to the rest of the continents.

If it were not for Illicit Financial Flows, our African countries would not be so dependent on foreign aid. We could use our domestic resources, grow our economies and still employ millions of African youths. Our governments should work closely with the private sector, civil society organisations, trade unionists and the media, to stop the circulation of incentives that facilitate the engagement in illegal behaviours. By doing so, the African people will have equal access to their rights, security, and opportunities to develop our economies.