Nigeria, S’Africa, Ethiopia, Congo Account for 50% Illicit Financial Flows in Africa

Nigeria, South Africa, Democratic Republic of Congo and Ethiopia account for 50 per cent of illicit financial flows (IFFs) in Sub-Saharan Africa, Brookings Institution, a globally renowned American research group, said in a new report.

The report, titled Illicit Financial Flows in Africa: Drivers, Destinations, and Policy Options, said revelations around illicit financial gains by Isabel dos Santos, Africa’s richest woman and daughter of former Angolan president Eduardo dos Santos, once again brought the topic of illicit financial flows to the forefront of the conversation on domestic resource mobilisation in Africa.

Unfortunately, the report noted that illicit flows “are not new to the continent: While between 1980 and 2018, sub-Saharan Africa received nearly $2 trillion in foreign direct investment (FDI) and official development assistance (ODA), it emitted over $1 trillion in illicit financial flows.

“These flows, illicitly acquired and channelled out of the continent, continue to pose a development challenge to the region, as they remove domestic resources that are crucial for the continent’s development,” the reported added.

It stressed that over a 38-year period, between 1980 and 2018, Africa exported an aggregate $1.3 trillion of illicit financial flows, adding that IFFs saw a notable increase in the 2000s in correspondence to increases in trade from Africa.

The report, however, said while the high aggregate amount of illicit financial flows might appear alarming, it was important to note that the relative share of illicit financial flows seemed to be steady or declining.

“In 2018, illicit financial flows only made up 5 per cent of GDP, down from 8 per cent in 2012 and 2008. Illicit financial flows as a share of trade also fell from 14 per cent in 2008 to 11 per cent in 2018.

“The top four emitters of illicit flows—South Africa, the Democratic Republic of the Congo, Ethiopia and Nigeria—emit over 50 per cent of total illicit financial flows from Africa.

“Among the top 10 emitters of illicit flows, nine countries attribute a significant portion of total exports to natural resources: mining products in South Africa, the Democratic Republic of the Congo, Botswana, and

Zambia, and oil and gas in Nigeria, the Republic of the Congo, Angola, Sudan, and Cameroon.