Can Africa curb the appetite for illicit financial flows?

Reining in illicit financial flows has been a major focus at the recent G20 Summit in Brazil. The question remains: Can Africa effectively curb the appetite for illicit financial flows? Robert Mwanyumba, Regional Coordinator at Transparency International, shared his insights on this pressing issue during a recent interview with CNBC Africa. Mwanyumba emphasized that African countries have been actively taking steps to combat illicit financial flows through the implementation of specific laws and policies. These efforts aim to address various sources of illegal financial activities, including corruption, trade misinvoicing, transfer pricing, and criminal enterprises such as smuggling, poaching, and drug trafficking. One of the key challenges in tackling illicit financial flows in Africa is the lack of transparency and accountability. The African Union high-level panel on illicit financial flows identified corruption as a major driver of these illegal activities, costing the continent an estimated $88.6 billion annually. To address this issue, Mwanyumba highlighted the importance of governance and anti-corruption measures in combating illicit financial flows. Many African countries have ratified the Africa Union Convention on Preventing and Combating Corruption, showing a commitment to tackling corruption at its roots. Organizations like Transparency International advocate for beneficial ownership transparency to hold accountable those responsible for enabling illicit financial flows. In order to ensure that the recovered resources are effectively used to benefit African economies, Mwanyumba stressed the need to identify the individuals behind illicit financial flows. By implementing beneficial ownership transparency standards and leveraging technology and cross-border cooperation, African countries can track and trace those involved in illicit financial activities. This approach not only helps recover stolen assets but also establishes a common African standard for curbing illicit financial flows. The role of international institutions and global agreements is crucial in the fight against illicit financial flows. African countries have often found themselves as rule-takers rather than rule-makers in the global financial architecture. To address this imbalance, the Africa group has called for reforms in international financial rules and advocated for a global tax convention under the United Nations. By actively engaging with international entities, African nations seek to secure fairer financial systems and facilitate the repatriation of illicit funds. Mwanyumba emphasized the importance of African countries having a seat at the table in shaping global financial policies to effectively combat illicit financial flows. Collaboration, mutual cooperation, and the establishment of appropriate rules are essential in curbing transboundary crimes like illicit financial flows. As African nations continue to build their own platforms and advocate for reforms, the fight against illicit financial flows remains a critical agenda in promoting economic growth and stability across the continent.