The African Capacity Building Foundation (ACBF) wants to use its expertise in capacity development to support African countries’ efforts to stem illicit financial flows, which deprive the continent of annual revenues worth USS$ 50bn, said on Monday its Executive Secretary, Prof. Emmanuel Nnadozie during the First Sub regional workshop on curbing Illicit Financial Flows (IFFs) from Africa held in partnership with the Economic Commission for Africa (ECA) on 14 to 15 September 2015 in Nairobi, Kenya.
During a presentation at the workshop, Prof. Nnadozie said that ACBF had already started playing a critical role in coordinating and building capacity of countries in their efforts to stem IFFs with the forthcoming publication of the 2015 African Capacity Report (ACR) - the Foundation’s flagship publication - on Capacity imperatives for Domestic Resources Mobilization.
Recommendations from the 2015 ACR aim to help African countries develop capacity to deter, track, stop and recover the outflow of moneys that illicitly leave the continent every year. “African countries need to build or strengthen their capacity to address the drivers and enablers of IFFs and implement the recommendations of the High Level Panel Report,” he said. “What is required is the strengthening of societal, institutional, regulatory and human capacity.”
On the societal front, African countries are invited to build political commitment and leadership capacity, raise awareness on the importance of paying taxes and impact of IFFs, combat corruption and address the mindset issue. In this regard, ACBF can help design new or support existing leadership development programs, develop and revise education curriculum on taxation and prevention of corruption as part of civic education, norms and values. The Foundation can also spearhead research, studies and dissemination workshops on IFF-related issues, hold high level forums and sensitization meetings with high government officials and the private sector on IFFs. ACBF is also willing to design projects to support national anti-corruption institutions and programs for Media advocacy on curbing IFF.
ACBF’s intervention on the institutional front would see the Foundation conduct capacity needs assessments, design comprehensive capacity development projects to address institutional capacity gaps; provide adequate equipment, tools, methods, processes and procedures to main executive, judiciary and legislative services/bodies involved in combating IFF; promote collaborating networks among key actors; conduct study and learning visits and establish information sharing platform on tax agreements, secrecy jurisdictions and best practices.
Regarding the strengthening of human capacity, the Foundation can facilitate skills audits, the mapping of specialized training/education institutions, design IFF-related degrees and short-term training programs at national and regional levels, promote cooperation, exchange and twining programs as well as study and peer learning activities, training workshops and seminars and on-the-job training activities. ACBF is also willing to offer technical advisory services, promote knowledge and learning activities on IFFs.
Illicit financial flows out of Africa have become a matter of major concern because of the scale and negative impact of such flows on Africa’s development and governance agenda. By some estimates, illicit flows from Africa could be as much as US $50 billion per annum. This is approximately double the official development assistance (ODA) that Africa receives and, indeed, the estimate may well be short of reality as accurate data does not exist for all transactions and for all African countries.
Some of the effects of illicit financial outflows are the draining of foreign exchange reserves, reduced tax collection, cancelling out of investment inflows and a worsening of poverty. Such outflows which also undermine the rule of law, stifle trade and worsen macroeconomic conditions are facilitated by some 60 international tax havens and secrecy jurisdictions that enable the creating and operating of millions of disguised corporations, shell companies, anonymous trust accounts, and fake charitable foundations. Other techniques used include money laundering and transfer pricing.
Preliminary evidence shows that taking prompt action to curtail illicit financial outflows from Africa will provide a major source of funds for development programmes in the continent in the near future. One of the keys to achieving success is the adoption of laws, regulations and policies that encourage transparent financial transactions. Moreover, African countries must reach out to the G-20 to call for greater transparency and tighter oversight of international banks and offshore financial centres that facilitate such flows.
Related
Africa Capacity Report 2015 preliminary findings
How Africa loses US$50 billion to Illicit Financial Flows (IFF)
Report of the High Level Panel on Illicit Financial Flows
Infrastructure financing is key to West Africa’s revitalization
