IFFs in Africa requires serious attention

POST-COLONISATION Africa is estimated to have lost more than US$1 trillion through illicit financial flows (IFFs).

According to evidence, this figure is roughly corresponding to all of the development assistance obtained by the continent during those years. Now, the African continent is estimated to be losing close to US$50 billion annually in IFFs.

These estimates, however, may not be a true reflection of what’s happening on the ground since getting accurate data from all African countries is difficult.

In addition, IFFs are by nature secretive and make it difficult to come up with proper estimates of figures that are being lost. Some of the IFFs arise from proceeds trafficking of drugs, bribery, and firearms transactions.

The amount lost annually by the continent through IFFs, therefore, most probably exceeds US$50 billion by a considerable figure.

As a result, these financial outflows are of significant concern, given insufficient growth, high degree of the poverty level, growing resource needs as well as the varying international landscape of what we call “development assistance”.

While the economies on the continent, starting from the turn of this century, have been growing at an average of about 5% per year, the figure is considered hopeful although deficient.

In addition, the advantages of this progress have mostly been limited to those at the top of the income distribution.

Apart from the equity matters that this economic situation creates, it also means that this situation may not be maintainable due to possible social unrest.

Since poverty is still a serious issue on the continent in comparative as well as absolute terms, the number of people existing on less than US$1,25 per day is estimated to have increased from 290 million to 414 million in 1990 and 2010, respectively.

The contemporary developments situation happening internationally, in fact, makes the problem posed by IFFs more acute. The resources that the African continent receives from other partners in the form of “development assistance” are stagnating due to attached preconditions and prerequisites of partners.

Such situations shall push the African continent to look at self-fund mechanisms. This will assist its development agenda and reduce reliance on the so-called “development assistance”.

IFFs are also of concern because of their impact on the system of the continent’s governance structure.

In order to effectively take the resources out of the continent, it usually contains corrupting of highprofile officials of the State and can maximise since the main doers of IFFs may have the financial muscle to tamper with the proper functioning of regulatory institutions.

As a result, a serious continental-wide prevention mechanism should be considered.