Stakeholders task African leader on illegal inflow of funds
Stakeholders have called for combined efforts to stem the illicit movement of money in Africa.
Speaking at the United Nations Economic Commission for Africa’s 51st Conference of Ministers taking place in Addis Ababa, Ethiopia, the organisation’s Deputy Executive Secretary, Abdalla Hamdok, said money illegally transferred across borders in addition to aggressive tax avoidance now amounted to $100 billion yearly.
He said: “I think the debate is not about the seriousness of the issue. The challenge is how we can arrest it. This is an African problem. The only way we can resolve it is by working together with our partners.”
A call was also made to amplify advocacy for the return of illicit financial assets by Akingbolahan Adeniran, Rule of Law Advisor to Vice President Yemi Osinbajo.
He argued: “In the domestic setting, receiving a stolen asset is a crime. Why is receiving stolen asset from a victim country not a crime?”
In addition to the loss of finances for affected states, flows have a number of other negative effects such as undermining governance, contributing to environmental degradation, skewing income distribution, deepening inequality, and exacerbating conflicts, particularly in resource-rich countries.
Research Director at the Africa Tax Administration Forum, Dr. Nara Monkam, harped on the destination of funds and profile of those engaged in the transferring of the money, noting: “Some multi-national corporations employ tax evasion, trade mis-invoicing and abusive transfer pricing.”
According to the director, inter-country cooperation at a continental level was required to tackle such practices.
In addition, given that illicit financial flows from Africa involve actors from across the globe, and that the laws and policies of non-African jurisdictions have a serious impact on illicit movement, it has become a priority to review the adequacy of global frameworks in tackling illicit financial flows.
Monkam added that there was a need for greater funding for technical assistance and improvements on tax administration. The commitment of governments was deemed crucial by Professor Annet Wanyana Oguttu, a tax law expert, at the University of South Africa, calling for political leaders to combat illicit financial flows.
She said: “It all bogs down to political will. And many African countries have been dragging their feet.”
Meanwhile, the African Continental Free Trade Agreement (AfCFTA) in Kigali, Rwanda in March this year through the African Capacity Building Foundation (ACBF) has called on African nations to bolster their capacities in readiness for the implementation of the ambitious plan.
Professor Emmanuel Nnadozie, the Executive Secretary of ACBF, speaking at a panel event, underscored the importance of enhancing skills necessary for the actualization of AfCFTA.