Illicit Financial Flows from Africa: Hidden Resource for Development

Dev Kar & Devon Cartwright-Smith Global Financial Integrity  March 2010 Africa lost $854 billion in illicit financial outflows from 1970 through 2008, according to this new report from Global Financial Integrity (GFI).  Illicit Financial Flows from Africa: Hidden Resource for Development debuts new estimates for volume and patterns of illicit financial outflows from Africa, building upon GFI's ground-breaking 2009 report,Illicit Financial Flows from Developing Countries: 2002-2006, which estimated that developing countries were losing as much as $1 trillion every year in illicit outflows. The new Africa illicit flows report is expected to feature prominently at the 3rd Annual Conference of African finance ministers in Malawi, which is currently underway. "The amount of money that has been drained out of Africa-hundreds of billions decade after decade-is far in excess of the official development assistance going into African countries," said GFI director Raymond Baker.  "Staunching this devastating outflow of much-needed capital is essential to achieving economic development and poverty alleviation goals in these countries." Examining data for a 39-year range from 1970 to 2008, key report findings include: Total illicit financial outflows from Africa, conservatively estimated, were approximately $854 billion; Total illicit outflows from Africa may be as high as $1.8 trillion; Sub-Saharan African countries experienced the bulk of illicit financial outflows with the West and Central African region posting the largest outflow numbers; The top five countries with the highest outflow measured were: Nigeria ($89.5 billion) Egypt ($70.5 billion), Algeria ($25.7 billion), Morocco ($25 billion), and South Africa ($24.9 billion); Illicit financial outflows from the entire region outpaced official development assistance going into the region at a ratio of at least 2 to 1; Illicit financial outflows from Africa grew at an average rate of 11.9 percent per year. "This report breaks new ground in the fight to end global poverty with analyses and measurements of illicit financial outflows never before undertaken," said Mr. Baker.  "As long as these countries are losing massive amounts of money to illicit financial outflows, economic development and prosperity will remain elusive." Click here to download a copy of the report. Source: Global Financial Integrity