ATAF’s Mary Baine on rethinking ways to manage illicit financial flows in Africa

Illicit financial flows continue to be a significant challenge for African countries, with billions of dollars being lost each year. In a recent interview with CNBC Africa's Esther Awoniyi, Mary Baine, the Director of Tax Programmes at the African Tax Administration Forum (ATAF), discussed strategies to curb these flows and increase revenue collection. Baine emphasized the need for African countries to strengthen their tax administrative capacities to effectively assess, collect, and account for revenue. She highlighted key recommendations from a high-level panel chaired by former South African President Thabo Mbeki, noting that while countries are aware of these recommendations, uptake and implementation have been slow. Baine outlined several key areas that need to be addressed to tackle illicit financial flows in Africa. Firstly, she stressed the importance of rechanneling administrative capacities to close gaps in revenue collection. This involves building the capacity of tax administrations to address transfer pricing and enhance information exchange. Secondly, Baine discussed the need to remodel legal frameworks to prevent revenue loss due to gaps in legislation. She highlighted the importance of bringing informal sector actors and high-net-worth individuals into the formal tax net. Additionally, she underscored the significance of collaboration and capacity-building among African countries. Baine also emphasized the need to realign priorities and focus on high-revenue sectors such as extractives and trade mispricing. She called for clear strategies to address illicit financial flows and enhance commercial oversight. Collaboration at both national and international levels is crucial to combat these challenges. Baine highlighted the importance of a whole-of-government approach and emphasized the need for coordination between tax administrations, regulatory bodies, and central banks to enhance information sharing. She noted the availability of tools such as beneficial ownership databases and country-by-country reporting standards to facilitate information exchange. Baine also stressed the importance of knowledge investment and capacity-building in understanding value chains to prevent revenue losses. Additionally, she called for the revision of treaty networks to safeguard against weak points in existing agreements. Holding policymakers and government officials accountable is essential in addressing illicit financial flows. Baine emphasized the role of advocacy and the need for robust legal frameworks to deter illicit activities. She highlighted the importance of collaboration between different government institutions and oversight bodies to ensure compliance with tax policies and prevent revenue leakage. Civil society organizations play a vital role in monitoring and advising governments on combating illicit financial flows. Baine urged collective action and a commitment to the development agenda of the continent to tackle this pressing issue. Despite the challenges, Baine noted progress being made across the continent in addressing illicit financial flows. She cited initiatives at the African Union Commission...