Tax Justice Network Africa (TJNA), a group promoting progressive taxation systems in Africa, has warned that failing to implement measures to stop Illicit Financial Flows (IFFs) will deprive Africa and Nigeria in particular of resources necessary for development financing in areas of health, education, roads and other projects and programmes.
The warning was issued at the 2023 summer school, themed ‘Enhancing the Capacity of Civil Society Organisations and Journalists in Efforts to Curb Illicit Financial Flows’ organised by Tax Justice Network Africa, WU Global Tax Policy Centre (WU GTPC) and the African Tax Institute, hosted at the Future Africa Campus at the University of Pretoria, South Africa.
The event had 30 participants comprising experts, representatives from the civil society organisations and the media.
According to the 2020 United Nations Conference on Trade and Development (UNCTAD), Africa is losing USD $89billion annually through illicit financial flows, with $40 billion of that loss coming from the extractive sector alone.
The Nigeria Extractive Industry Transparent Initiative (NEITI), had earlier in the year noted that the country loses about $9 billion to illegal mining and smuggling of gold.
Similarly, Nigeria’s Independent Corrupt Practices and Other Related Offences Commission (ICPC) in 2021, estimated that the country loses $10 billion to illicit financial flow, while 20 percent of the $50 billion lost to illicit financial flow in Africa is from Nigeria.
Mukupa Nsenduluka, Tax Justice Network Africa’s policy officer on tax natural resources governance, during a session “Taxation for development financing in Africa”, said: “Africa is losing the much-needed resources through illicit financial flows. These are resources that could have been channeled to addressing Africa’s poverty and inequality challenges.
“Africa, it is estimated by a 2021 UNCTAD report of losing $89 billion annually through illicit financial flows. The report further reveals that $40 billion of this $89 billion is lost in the extractive sector.
“Now, this is very significant, because most of the economic activities that happen on the continent are in the extractive sector. As such, the more we mine, the more African countries are prone to illicit financial flows. “Putting it in context, we need to talk about the human cost of illicit financial flows because the monies are resources that could be used for development, health, education, schools and roads among others. “For instance, in the DRC (Democratic Republic of Congo), the 2021 State of Tax Justice Report reveals that about USD $600 million is lost annually, through corporate tax abuse and it’s estimated that this amount money could take about 7.2 million children to school. So what we’re saying here is that the human cost of illicit financial flows is too.
SOURCE: THE SUN
