What African Leaders Must Do to Tackle Illicit Financial Flows

The 2018 African Leadership Forum kicked off on August 1.

Former Tanzanian President, Benjamin William Mkapa, has expressed concern over the state of financing in Africa, highlighting illicit financial flows, among factors, as obstacles to the continent’s economic transformation and development.

Mkapa said this, Wednesday, ahead of the African Leadership Forum which starts in Kigali Thursday. The forum is expected to convene former heads of state from six African countries and top business leaders from across the continent.

He emphasised that African countries ought to be more strategic on how they finance their development agenda, saying that things like illicit financial flows were limiting the pace of financing.

“This (illicit financial flows) is a subject which is important because, although there has been progress to the emergence of African businesses and billionaires, they are also associated with tremendous outflows of their earnings instead of re-investing in their countries,” he during the media briefing.

“But illicit flows are also about the operations of external investors in the exploitation of resources of African countries,” he added.

Mkapa also said that some external investors understate their returns and overestimate the costs of production of initial investments, putting African resources at a disadvantage.

The United Nations Economic Commission for Africa estimates that African countries lose more than $50 billion annually through illicit financial flows, which is approximately double the official development assistance (ODA) the continent receives.

This has raised concerns among leaders, given the scale and negative impact on Africa’s development and governance agenda.

Going forward, the former president said, domestic resource mobilisation will help African countries in their pursuit for financing their development.

Part of the discussions at the forum will focus on this particular element. Conversation will also revolve around how to enhance savings, taxation and budgeting, among others.

This year’s forum, under the theme, “Financing Africa’s Transformation for Sustainable Development”, seeks to provide a platform to deliberate on the prospect of increased, improved, and effective financing for Africa’s transformation.

“This year, we want to see what the constraints are and the means required to accelerate the process of economic development and better strengthen our people’s lives,” Mkapa noted.

Among the former heads of state expected at the event include Joaquim Chissano of Mozambique, Olusegun Obasanjo of Nigeria, Armando Guebuza of Mozambique, Moncef Marzouki of Tunisia, and Hassan Sheikh Mohamud of Somalia.

Last year, the forum was held in Johannesburg and focused on peace and security on the continent.

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Source: The New Times

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