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Illicit financial flows have made Africa 'a net creditor to the world'
Source: The Guardian
Illicit financial flows have made Africa 'a net creditor to the world'
Mark Tran
guardian.co.uk, Wednesday 29 May 2013 00.05 BST
Africa lost up to $1.4tn in illicit financial flows in 1980-2009, far exceeding money coming in over the same period and seriously undermining the continent's development, a report said on Wednesday.
Illicit financial flows involve the transfer of money earned through corruption, bribes, tax evasion, criminal activities and transactions involving contraband goods. Tax evasion and illicit financial flows will be on the agenda of the G8 summit in Northern Ireland next month, chaired by David Cameron, amid increasing impatience in the UK and the US at companies such as Google and Apple as they manipulate the system to their maximum advantage.
But most African countries, with weak tax regimes, are by far the biggest losers. The joint report from the African Development Bank (AfDB) and Global Financial Integrity (GFI), a US research organisation, says the continent has been a long-term net creditor to the rest of the world. Africa lost $597bn-1.4tn in net resource outflows between 1980 and 2009 after adjusting recorded transfers for illicit financial outflows.
"The traditional thinking has always been that the west is pouring money into Africa through foreign aid and other private-sector flows, without receiving much in return. Our report turns that logic upside down – Africa has been a net creditor to the rest of the world for decades," said Raymond Baker, president of GFI.
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Mark Tran
guardian.co.uk, Wednesday 29 May 2013 00.05 BST
Africa lost up to $1.4tn in illicit financial flows in 1980-2009, far exceeding money coming in over the same period and seriously undermining the continent's development, a report said on Wednesday.
Illicit financial flows involve the transfer of money earned through corruption, bribes, tax evasion, criminal activities and transactions involving contraband goods. Tax evasion and illicit financial flows will be on the agenda of the G8 summit in Northern Ireland next month, chaired by David Cameron, amid increasing impatience in the UK and the US at companies such as Google and Apple as they manipulate the system to their maximum advantage.
But most African countries, with weak tax regimes, are by far the biggest losers. The joint report from the African Development Bank (AfDB) and Global Financial Integrity (GFI), a US research organisation, says the continent has been a long-term net creditor to the rest of the world. Africa lost $597bn-1.4tn in net resource outflows between 1980 and 2009 after adjusting recorded transfers for illicit financial outflows.
"The traditional thinking has always been that the west is pouring money into Africa through foreign aid and other private-sector flows, without receiving much in return. Our report turns that logic upside down – Africa has been a net creditor to the rest of the world for decades," said Raymond Baker, president of GFI.
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Read more: http://www.guardian.co.uk/global-development/2013/may/29/illicit-financial-flows-africa-creditor
