USD 60bln in annual illicit financial outflow makes Africa net creditor to the world
The African Union’s campaign to recover assets stolen from the continent remain ineffective in the face of growing illicit financial flows, reads a new report from the Coalition of Dialogue on Africa.
It criticizes the AU’s Common African Position on Asset Recovery for having achieved little since it was established five years ago to identify, trace, and repatriate African assets. The report, published in partnership with the AU high-level panel of illicit financial flows (IFFs), indicates that IFFs from Africa could be up to USD 60 billion a year.
The massive hemorrhage of assets makes Africa a net creditor rather than a debtor to the rest of the world.
The paradox of Africa’s underdevelopment is compounded by its external debt burden, states the report, and the problem is likely to grow worse.
The report’s authors indicate that shortcomings in the UN Convention against Corruption are a barrier to asset recovery.
“UNCAC has not explicitly declared return of recovered assets to countries of origin as an inalienable right of such countries. Recoverable assets within the UNCAC framework are limited to proceeds of corruption, which is at odds with the findings of the ECA-AU High Level Panel on Illicit Financial Flows from Africa,” it reads.
Those findings estimated that, as of 2015, Africa was losing conservatively USD 50 billion annually to illicit financial flows, while an estimated one trillion dollars had been lost over a 50-year period.
“Admittedly, UNCAC provides a framework for international asset recovery. However, even the most optimistic exponent of UNCAC and the international system for asset recovery, can concede that there are numerous challenges that confront countries of origin,” it reads.
The report cites a World Bank initiative that documented major barriers to asset recovery, which include institutional issues, legal gaps and requirements that delay assistance, and communications issues.
It notes that developing countries have begun paying attention to commercial IFFs—illcit flows carried out under the cover of business arrangements like joint ventures, production sharing agreements, and mineral concessions.
The report highlights a case involving government corruption in Nigeria, where Siemens AG bribed officials to secure telecommunications contracts that ultimately netted the company USD 1.1 billion in profits.
