An estimated $88.6bn of money and assets that are illegal in source, transfer or use leave the African continent every year, according to a recent report by the UN’s Conference on Trade and Development.
The substantial illicit financial flows (IFFs) amount to almost as much as the combined totals of both official development assistance ($48bn) and annual inbound foreign direct investment, which stood at an average of $54bn between 2013 and 2015.
Unctad’s secretary-general Mukhisa Kituyi said that “illicit financial flows rob Africa and its people of their prospects, undermining transparency and accountability and eroding trust in African institutions”.
Between 2000 and 2015, the total outflows of illicit capital amounted to $836bn, exceeding the continent’s total external debt stock — which stood at $770bn in 2018. Capital related to the exports of extractive commodities — particularly those that are high-value and low-weight such as gold — make up the largest part of IFFs.
The report states that tackling illicit capital flight represents a huge potential pool of capital for much-needed investment into areas such as infrastructure, education, health and productive capacity. This could help African countries work towards the UN’s 17 sustainable development goals and plug the $200bn financing gap, the report says.