Africa loses $300b annually in illicit financial flows.

Expanding the Definition of Illicit Financial Flows

Tax experts are advocating for a broader definition of illicit financial flows to combat looting in Africa, strengthen growth, and foster international cooperation. Chenai Mukumba, from the Tax Justice Network Africa, highlights the need to include activities such as tax evasion in the definition to address the financial implications on domestic resources. Illicit financial flows, fueled by corruption and tax abuse, pose a significant threat to developing economies, leading to revenue losses and exacerbating poverty.

International organizations are working towards defining, addressing, and mitigating illicit financial flows, with attention shifting towards a more comprehensive approach. Africa faces an annual financial leakage of approximately $90 billion, hindering development and domestic resource mobilization efforts. Former South African President Thabo Mbeki leads the charge against illicit financial flows from Africa, emphasizing the need to curb illegal transactions and promote inclusive growth.