Corruption and illicit financial flow cost Nigeria $88.6b yearly

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By Wole Oyebade

The value of corruption and illicit financial flow in Nigeria and other African countries was recently estimated at $88.6 billion yearly. The capital flight estimate, courtesy of the Director General, African Development Bank Group (Nigeria), Lamin Barrow, is a major drain on capital and revenues on the continent, undermining productive capacity and prospects for achieving the Sustainable Development Goals (SDGs) and the African Union’s Agenda 2063 Goals.
Barrow, at an executive training programme on ‘Enhancing Accountability, Transparency and Curbing Corruption and Illicit Financial Flows in Africa’ in Abuja, said the financial morass, made worse by the lack of accountability and transparency, creates a vicious cycle of a fiscal sinking hole in Africa’s public resources.
He recalled that the United Nations Conference on Trade and Development (UNCTAD), in its Economic Development in Africa Report 2020, noted that one-sixth of the continent’s aggregate government revenues derive from corporate tax and 10 per cent of that revenue ($6.7 billion) was lost to tax avoidance.
“The report estimated capital flight from Africa at $88.6 billion yearly for the period 2013 – 2015, representing 3.7 per cent of Africa’s GDP), whereas total official development assistance (ODA) and foreign direct investment (FDI) for the same period stood at $48 billion and $59 billion, respectively. “The report further suggests that between 2000 and 2015, the total illicit capital flight from Africa amounted to $836 billion, which is more than Africa’s total external debt estimated at $770 billion, in 2018. Africa is therefore a ‘net creditor to the world’,” Barrow said.
But as governments lose revenues through Illicit Financial Flows (IFFs) and corruption, he added, they are also forced to resort to more borrowing, which may also be stolen due to weak public financial management systems.

Lamin Barrow


“Corruption and IFFs, therefore, fuel the debt vulnerabilities witnessed in many African countries,” he said. Addressing in-training public finance managers under the Public Finance Management Academy for Africa (PFMA), Barrow, said sound public financial management and cooperation at all levels would be required to overcome these challenges.
He said governments must ensure that revenue mobilisation, accountability, transparency, anti-corruption and anti-IFFs institutions are adequately resourced to perform their functions effectively. To this end, the capacity and independence of the Supreme Audit Institutions and parliamentary oversight committees should be strengthened, while the voice and watchdog role of the media and civil society is protected.
The executive training, which is the last module before the graduation of the first cohort of the Public Finance Management Academy for Africa (PFMA) Public Finance Management Executive Training Series, is the initiative of the African Development Bank (AfDB)

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