Africa losing billions to illicit cash flows

Data from the United Nations Conference on Trade and Development estimates

that African countries lose about $89 billion a year due to illicit cash flow.

The illicit cash flow consists of tax invasion and deliberate mis-invoicing which

are a result of theft and corruption.

The export of commodities such as gold, diamond, and platinum is responsible

for almost half of the total figure.

The lost funds could be used to provide social services such as staffing hospitals,

which have been struggling during the COVID-19 pandemic.

Economists have argued that despite being aid-dependent, Africa is a net

exporter of capital due to tax havens.

Tax havens are countries that offer foreign individuals and businesses little or no

tax liability in a politically and economically static environment. They also share

limited or no information with foreign tax authorities.

Only 45 of 53 African countries provide data to the UN International Trade

Statistics Database.

Activists say countries should introduce tough regulations on multinational

companies and practices such as profit repatriation.