Africa loses over $80bln annually through illicit outflows

GMT 23:33 2016 Monday ,25 April

Arab Today, arab today Africa loses over $80bln annually through illicit outflows

African president Thabo Mbeki
Johannesburg - XINHUA

More than 1.16 trillion rand (about 80 billion U.S. dollars) left Africa every year due to illicit outflows, former South African president Thabo Mbeki said on Monday.

"We need to find a way of tracking these outflows so that we are able to measure whether the measures are working, leading to a reduction of the outflows," Mbeki said at a press briefing in Johannesburg.

The figure he gave was more than the amount provided by the International Monetary Fund (IMF), which said Africa lost 50 billion dollars every year due to illicit outflows.

Mbeki explained that after looking more thoroughly into the statistics, the number had increased to an estimate of between 80 billion and 90 billion dollars.

"This could either be because more thorough work has been done or in fact there is in actual increase in the activity," Mbeki said.

He urged central banks to track the money which goes through their systems.

"This money is not leaving the continent in plastic bags, it goes through financial systems," he claimed.

Mbeki also called for efforts to strengthen tax authorities on the African continent, as there were institutional weaknesses.

He said the commercial sector is responsible for two thirds of capital illicit outflows from the African continent, while the other third comes from criminal activity such as human trafficking, drug dealing and corruption.

The former president chaired the African Union panel on illicit outflows from Africa. The panel, comprising 10 representatives from African countries, provided its findings after a four-year investigation.

Mbeki said the panel is consulting with certain countries and financial institutions such as the Organisation for Economic Co-operation and Development (OECD) and the European Central Bank.

He said the OECD agreed to work with the panel in tracking and reducing the illicit outflows, and to measure whether any progress has been made in reducing the activity through their efforts.

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