Mauritius: Former SA president holds meet on illicit cash flows from Africa
Shockingly, the level of illicit financial outflows from Africa exceeds the official development assistance to the continent, which stood at $46.1 billion in 2012. (Image: European Commission)
Illicit Financial Flows (IFFs) have grievously stunted Africa’s development over the last decades. Indeed, the level of illicit financial outflows from Africa exceeds the official development assistance to the continent, which stood at $46.1 billion in 2012.
In this context, former South African President Thabo Mbeki, who currently chairs the High Level Panel (HLP) on Illicit Financial Flows (IFFs) from Africa, met with representatives of Mauritian governments, private sector, academia and civil society.
The meetings, which take place today and tomorrow in Port Louis, Mauritius, aim to better appraise the scale, manifestations and negative impact of such flows on Africa’s development and governance as well as look at the matter of IFF from the perspective of small islands economies.
“Preliminary evidence shows that taking prompt action to curtail illicit financial outflows from Africa will provide a major source of funds for development programs in the continent in the near future. This is precisely what we would like to discuss with our Mauritian stakeholders,” said President Mbeki.
While IFFs are a global problem, their impact on the continent is monumental and represents a significant threat to Africa’s governance and economic development.
Current evidence shows that Africa lost over $854 billion in IFFs between 1970 and 2008, or a yearly average of about $22bn. This trend has been increasing over time and, especially in the last decade, with an annual average IFF of $50 billion between 2000 and 2008.
Some of the effects of illicit financial outflows are the draining of foreign exchange reserves, reduced tax collection, canceling out of investment inflows and a worsening of poverty. Such outflows also undermine the rule of law, stifle trade and worsen macroeconomic conditions.
The HLP on IFF from Africa, established by the Economic Commission for Africa (ECA) and the African Union (AU) was inaugurated in February 2012 to address the debilitating problem of illicit financial outflows from Africa.
The Panel is chaired by former President Mbeki of South Africa, and composed of nine other distinguished personalities from within and outside Africa.