The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who represented President Goodluck Jonathan at the forum called for a halt in illicit funds transfer from Africa.
According to a recent report of the African Union and the UN Commission for Africa, the continent is losing more than $50bn every year in illicit financial outflows as governments and multinational companies engage in fraudulent schemes aimed at avoiding tax payments to some of the world’s poorest countries, impeding development projects and denying poor people access to crucial services.
The report was praised by civil society groups as the first African initiative to address illicit outflows from the continent. In total, the continent lost about $850bn between 1970 and 2008, the report said. An estimated $217.7bn was illegally transferred out of Nigeria over that period, while Egypt lost $105.2bn and South Africa more than $81.8bn.
Trade mispricing, payments between parent companies and their subsidiaries, and profit-shifting mechanisms designed to hide revenues are all common practices by companies hoping to maximise profits, the study said. Nigeria’s crude oil exports, mineral production in the Democratic Republic of the Congo and South Africa, and timber sales from Liberia and Mozambique are all sectors where trade mispricing occurs.
Criminal networks engaged in drugs and human trafficking, animal poaching, and theft of oil and minerals also contributed to money leaving the continent.
In her presentation, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi okonjo-Iweala, who suggested what she described as “innovative financing”, in the quest to mobilise more public funds, on the African continent, insisted that every step must be taken to halt illicit funds outflow from Africa.
Dr. Okonjo-Iweala also called for innovating the remittances of Africans in the Diaspora by creating instruments to enable Africans outside the region to play greater roles in the development efforts of their home countries.