The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said Africa loses about $88 billion to illicit financial flows yearly.

The minister who was delivering a keynote speech at the opening of the fifth session of the African Union Specialised Technical Subcommittee on Tax and Illicit Financial Flows (IFFs), jointly hosted with the Nigeria Revenue Service (NRS), in Abuja yesterday, noted that these are resources that should otherwise be invested in infrastructure, education, healthcare and productive sectors.

He said Africa was facing the challenges of tax evasion, base erosion, limited economic diversification, weak institutional capacity, as well as continued dependence on external financing.

“Addressing the challenges is not optional; it is essential,” he said.

He said Africa cannot sustainably finance its development through debt, aid or external investment alone.

“These sources remain important, but they are inherently uncertain and often influenced by external dynamics beyond our control”, the minister said.

He insisted the foundation of sustainable development must be domestic resource mobilisation as “our continental ambition is clear: to mobilise up to 90 per cent of Africa’s development financing needs from domestic resources, as envisioned under Agenda 2063”.

This, he said, would require not incremental change, but systemic reform to achieve.

Edun said the priorities of Agenda 2063 are clear: to strengthen tax systems and administration, maximise returns from natural resources, enhance domestic savings and financial inclusion, develop capital markets, combat illicit financial flows and improve governance and reduce inefficiencies.

“These are not abstract goals. They are practical levers for transformation”, he said.

The main objective of the meeting is to tackle illicit financial flows and strengthen tax systems across Africa.

The minister said Africa’s fiscal reform agenda must focus on broadening the tax base through improved compliance and reduced leakages, strengthening public financial management, promoting domestic savings and financial inclusion to mobilise local capital, developing robust capital markets to support investment and innovation, as well as intensifying efforts to combat illicit financial flows through stronger enforcement and cross-border cooperation.

“At the same time, we must invest in the foundations that make reform sustainable, such as strong and accountable institutions, digital infrastructure and data systems, regional cooperation and policy coordination and active citizen engagement. These are critical enablers of lasting change”, he said.

Executive Chairman of the Nigeria Revenue Service (NRS), Dr Zacch Adedeji, said the gathering reflected the seriousness with which Africa is confronting one of the most important challenges of the time – how to strengthen its fiscal systems, safeguard its resources and mobilise the domestic revenues required to finance Africa’s development.

“This meeting takes place at a time when the development financing gap is widening for many African countries”, he said.

Adedeji said governments across the continent must finance infrastructure, strengthen social protection, support industrialisation and address climate vulnerabilities while at the same time grappling with substantial losses of financial resources through illicit financial flows, tax evasion, aggressive tax avoidance and the like.