Africa: Illegal money transfers hurting continent's growth
The New Times (Rwanda) / Monday, 27 February 2012
Kigali (Rwanda)- Experts say that the increasing trends of illicit financial
flows are posing a great threat to Africa's fragile growth as they pump back
more dollars to developed countries than those sent to poor African states.
Alezar Dessie, a consultant with the United Nations Economic Commission for
Africa (ECA), notes that out of every dollar channelled to poor countries,
as much as ten dollars may have left going back to rich countries, a back
flow that leaves Africa begging.
"Illicit financial outflow is not only morally repugnant, but also carries a
heavy economic, political and social cost with it," he said, while
presenting a paper on 'Illicit Financial Outflows: A development challenge
for Africa.'
The paper was presented on Friday at an Experts' Meeting on Illicit
Financial Outflows, organized by ECA's Governance and Public Administration
Division (GPAD), in collaboration with the African Union Advisory Board on
Corruption (AUABC) in Kigali.
Dessie added that Billions of dollars illicitly leave the African continent
on a regular basis as poor countries generate the flows while the developed
world
facilitates their absorption which is detrimental to financial and
development in least developed countries.
Illicit Financial outflows include secret financial deals, bribery, tax
avoidance and evasion and illegal commercial activities (illegal drugs,
illegal weapon sales, trafficking of women and children...), among others.
According to a study by Global Financial Integrity (GFI), it is estimated
that a total of US $850 billion to US $1 trillion were illegally moved from
developing countries to the developed world in 2006. This skyrocketed
further to US $1.3 trillion in 2008, barely two years after, setting yet off
another alarm on the increasing illicit outflows.
Aurelien Agbenonci, the UN Rwanda Resident Coordinator/UNDP Resident
Representative, is optimistic that ECA's initiative to focus on the ravages
of illicit financial outflows is a step in the right direction.
"We should all support and encourage partnerships and synergies that seek to
free Africa from the scourge of corruption and reversion of the growing
trend towards siphoning the continent's resources outside its borders," he
said
Experts also reveal that such unchecked outflow could easily wipe out the
continent's external debt of about $250 billion and still leave $600 billion
for economic development.
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Received on Mon Feb 27 2012 - 15:19:58 EST
