Written by Masimba Tafirenyika | From Ghana Business News

The figures are staggering: between $1.2 trillion and $1.4 trillion has left Africa through illicit financial flows between 1980 and 2009—roughly equal to Africa’s current gross domestic product and surpassing, by far, the money it received from outside over the same period. Illicit financial flows are money earned illegally and transferred for use elsewhere.

The money is usually generated from criminal activities, corruption, tax evasion, bribes and transactions from cross-border smuggling. The numbers tell only part of the story. It is a story that exposes how highly complex and deeply entrenched practices have flourished over the past decades with devastating impacts, but barely making news headlines.

“The illicit haemorrhage of resources from Africa is about four times Africa’s current external debt,” says a joint report by the African Development Bank (AfDB) and the Global Financial Integrity, a US-based research and advocacy group. The report, Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980–2009, found that cumulative illicit outflows from the continent over the 30-year period ranged from $1.2 trillion to $1.4 trillion.

The Guardian, a British daily, notes that even these estimates—large as they are—are likely to understate the problem as they do not capture money lost through drug trafficking and smuggling.

Turning logic upside down “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,” said Raymond Baker, President of the Global Financial Integrity in a statement released at the launch of the report earlier this year. Mr Baker said the report turned that logic upside down, adding that Africa has been a net creditor to the rest of the world for decades. Professor Mthuli Ncube, Chief Economist and Vice-President of the AfDB, agrees: “The African continent is resource-rich. With good resource husbandry, Africa could be in a position to finance much of its own development.”

Read more at Ghana Business News