Post Views: 333 Abdalla Hamdok, Deputy Executive Secretary of the United Nation’s Economic Commission For Africa (UNECA) estimates that African nation...
Abdalla Hamdok, Deputy Executive Secretary of the United Nation’s Economic Commission For Africa (UNECA) estimates that African nations loss $100bn yearly to illegal financial transfers and aggressive tax avoidance.
Hamdok, who was speaking at a high-level discussion during the Conference of African Ministers of Finance, Planning and Economic Development at the 51st Session of the Commission, noted that “the debate is not about the seriousness of the issue.
“The challenge is how we can arrest it. This is an African problem. The only way we can resolve together is by working together with our partners.”
Experts have called for combined forces to stem the illicit financial and capital flows across the continent, amid revelations that flows were stifling development progress.
At the event, Dr. Nara Monkam, Research Director at the Africa Tax Administration Forum, shone a spotlight on the destination of funds and profile of those engaged in the menace, noting that “some multi-national corporations employ tax evasion, trade mis-invoicing and abusive transfer pricing.”
According to the Director, inter-country cooperation at a continental level was required to tackle such practices.
In addition, given that illicit financial flows from Africa involve actors from across the globe, and that the laws and policies of non-African jurisdictions have a serious impact on illicit flows from Africa, it has become a priority to review the adequacy of global frameworks in tackling illicit financial flows.
Monkam also noted the need for greater funding for technical assistance on tax matters and improvements in tax administrations, just as Akingbolahan Adeniran, Rule of Law Advisor to Nigeria’s Vice President Yemi Osinbajo, wants amplification of advocacy for the return of illicit financial assets.
For Akingbolahan: “In the domestic setting, receiving a stolen asset is a crime. Why is receiving stolen asset from a victim country not a crime?’ In addition to the loss of finances for affected states, flows have a number of other negative effects, such as undermining governance, contributing to environmental degradation, skewing income distribution, deepening inequality, and exacerbating conflicts, particularly in resource-rich countries.”
The commitment of governments was deemed crucial by Professor Annet Wanyana Oguttu, a tax law expert at the University of South Africa, who called for political will to combating illicit financial flows.
“It all bogs down to political will,” and added, “many African countries have been dragging their feet,” she stressed.
The event also saw the launch of two ECA publications, A Study on the Global Governance Architecture for Combating Illicit Financial Flows and Base Erosion and Profit Shifting in Africa: Reforms to Facilitate Improved Taxation of Multinational Enterprises.
During the event, Hamdok thanked the Government of Norway for funding the ECA High Level Panel on Illicit Financial Flows from Africa chaired by former South African President Thabo Mbeki and noted the country stood out as an ‘extremely progressive partner’.
African countries have committed themselves to tackling these flows through target 16.4 of the UN Sustainable Development Goals and the 2015 Special Declaration of the Assembly of the African Union on Illicit Financial Flows.