Mbeki Panel To Nigeria, Others: Stop Illicit Financial Flows

Cover of report on IFFs - AU/UNECA

African Union (AU)/ United Nations Economic Commission for Africa’s (UNECA) High Level Panel on Illicit Financial Flows (IFFs), led by former South Africa’s President Thabo Mbeki and key policy-makers have alerted Nigeria and other continental leaders to the rising cases of IFFs from Africa, from the initial USUS$50 billion yearly.

At a two-day “First Subregional Workshop on Curbing IFFs from Africa”, in Nairobi, Kenya, the panel members and delegates said new and innovative ways of generating IFFs were emerging and African leaders must stop the menace through political measures.

The forum, which stressed the need for transparency in tackling IFFs, hailed President Muhammadu Buhari and Vice President Yemi Osibanjo for declaring their assets and urged other African leaders to follow their steps.

The ex-South Africa’s president and other speakers contended that commercial routes of IFFs needed closer monitoring.

The Nation report continues:

They argued the need for capacity and institutional building, and stricter legislation since African countries depend mainly on their extractive industries.

The Director of UNECA’s Capacity Development Division, Dr. Adeyemi Dipeolu, who presented the panel’s new findings, noted that new and innovative means of generating IFFs were emerging.

“Tax incentives granted by African countries are not usually guided by cost-benefit analyses; corruption and abuse of entrusted power still remain a continuing concern.

“African countries need to stimulate and expedite the asset recovery and repatriation,” he said.

Dipeolu added: “Money laundering continues to require attention; weak national and regional capacities in Africa impede efforts to curb illicit financial flows; absence of a global and continental frameworks for addressing IFFs that speak to African interests; financial secrecy jurisdictions must come under closer scrutiny; development partners have an important role in curbing IFFs from Africa; IFF issues should be incorporated and better coordinated across UN processes and frameworks.”

The Executive Secretary of African Capacity-Building Foundation (ACBF), Prof. Emmanuel Nnadozie, one of the key organizers of the workshop, said the AU’s agency would contribute to the validation of the programme document under preparation to tackle IFFs.

“ACBF wishes to play a critical role in coordinating and building capacity of countries in their efforts to stem IFFs.

“It will also support joint activities with partners, such as sub-regional workshops, implement capacity needs assessment initiatives to curb IFFs, design appropriate capacity development intervention and contribute to the effort for resources mobilization,” he said.

The workshop was organized by UNECA, ACBF, Open Society Initiative for West Africa (OSIWA) and others to consider ways of implementing the findings of the panel and seek global cooperation.

The Mbeki panel, which included nine members, was created by the Joint AU and UNECA Conference of Ministers of Finance, Planning and Economic Development and inaugurated in February 2012 in Johannesburg, South Africa.

It was urged to determine the nature and patterns of IFFs; establish the level of such outflows and assess their complex and long-term implications.

The panel was also asked to consult and sensitize African governments and other stakeholders, including development partners, on the scale of the issue and propose policies and mobilise support for practices that would reverse these outflows.

Its setting up was based on a report from Global Financial Integrity (GFI), a Washington D.C., United States (U.S.)-based research and advocacy organisation that Africa lost about US$854 billion in IFFs from 1970 through 2008.

The GFI report also claimed that total illicit outflows might be as high as US$1.8 trillion.

The panel submitted its 122-page report to the summit of AU Heads of States and Governments in Addis Ababa, Ethiopia, in January.

Nigeria topped four other countries in IFFs with US$89.5 billion as the highest outflow measured followed by Egypt (US$70.5 billion), Algeria (US$25.7 billion), Morocco (US$25 billion), and South Africa (US$24.9 billion).

The report said IFFs played a large and detrimental role in the challenge of resource generation.

In the case of Nigeria, it said: “We remain concerned about the effectiveness of the relevant institutions, including the lack of cooperation and coherent operations among the various agencies”.