'We shall not rest until illicit financial flows are reduced!" H.E. Quartey Thomas Kwesi, the Deputy Chairperson of the African Union Commission pledged in New York at a high level forum. The theme of the forum was 'Promotion of International Cooperation to Combat Illicit Financial Flows and Strengthen Good Practices on Assets Recovery and Return to Foster Sustainable Development,' at which the African Union Development Agency-NEPAD and African Peer Review Mechanism urged world leaders to curb illicit financial flows at the 74th United Nations General Assembly.
The negative impact of illicit financial flows on the ability of countries to achieve their national developmental priorities has been the subject of international discussion in recent times. It is said that countries lose substantial resources through different sources of illicit financial flows such as corruption, crime and illicit commercial activities.
The report of the AU/ECA High Level Panel on Illicit Financial Flows from Africa, which was chaired by the former South African President, Thabo Mbeki, found that illicit commercial activities account for 65% of IFFs from Africa while criminal activities and corruption account for 30% and 5%, respectively. These are facilitated in part by the existence of tax havens and secrecy jurisdictions that facilitate the existence and operation of disguised corporations, anonymous trust accounts and fake charitable foundations.
The report of the Mbeki Panel indicates that illicit activities that are intended to hide wealth, evade/avoid tax and customs duties include: avoiding tax (base erosion and profit sharing); abusive transfer pricing; trade mispricing; mis-invoicing of services and intangibles; unequal contracts, and; tax inversion.
Given this backdrop, the high-level event in New York brought out the need for strengthened international cooperation to redress the situation. Princess Gloria Akobundu, National Coordinator and Chief Executive Officer of AUDA-NEPAD Nigeriaemphasised that, 'The global contribution of strategies will assist to eradicate illicit financial flows, and to enhance attainment of the Sustainable Development Goals, ensuring the return of stolen assets.'
Speaking specifically on the African context, the President of Nigeria, H.E Muhammadu Buhari called for unity among African countries to demand unconditional repatriation of assets stolen from the continent, stating that his country has lost 157.5 billion dollars to...