Report: Africa Loses $60 Billion A Year Illegally
By Patrick McGroarty | From Wall Street Journal
Companies and government officials are illegally moving as much as $60 billion out of Africa each year, according to a report released Sunday, depriving the world’s poorest continent of capital and tax revenue that could spur faster economic growth.
A joint panel run by the United Nations and the African Union and led by former South African President Thabo Mbeki released a report describing the methods some companies use to send money out of the continent illicitly. The losses are staggering not only in terms of dollars but development opportunities lost, Mr. Mbeki said.
“We are talking about large volumes of capital that could play a great role in addressing Africa’s development challenges,” he said in an interview.
The scams range from loggers in Mozambique understating the value of the timber to Nigerian officials who send abroad suitcases of illegally earned cash.
The panel estimated illicit outflows in part by adding up discrepancies between the reported value of African exports and the higher value those same goods sometimes receive when they arrive as imports to Africa’s trading partners. That investigation showed that most African governments were victims of companies or officials secreting profits and cash out of countries.
Mr. Mbeki said he couldn’t name particular companies that may be at fault because their dealings with tax authorities are confidential. But he did say “large commercial corporations are by far the biggest culprits of illicit outflows, followed by organized crime.”
Read more at Wall Street Journal