World Economy

$50b in Illicit Outflows Hurting Africa

$50b in Illicit Outflows Hurting Africa
$50b in Illicit Outflows Hurting Africa

President Jacob Zuma has warned that illicit financial flows out of Africa of about $50 billion a year are depriving the continent of much needed resources for development.

In a statement on Wednesday, the presidency quoted Zuma as saying: “Illicit financial flows deprive developing countries of the much-needed economic resources to uplift their economies in order to provide infrastructure and basic services such as education and health care,” ANA reported.

Zuma made the remarks during his address at the United Nations General Assembly meeting in New York on Tuesday.

“The successful implementation of Africa’s development plans depends on the availability of resources. We are therefore seriously concerned about the loss of resources of the continent through illicit financial flows.”

The Joint African Union and UN Economic Commission for Africa’s High-level Panel on Illicit Financial Flows from Africa estimates that illicit flows from Africa could be about $50 billion a year. This is money that leaks across borders unofficially and does not contribute to aspects such as tax.

Zuma said: “We committed ourselves to an ambitious and transformative global development program that seeks to address the triple challenge of this century, which is poverty, unemployment and inequality.”

He said to a great extent, the Millennium Development Goals played a critical role in galvanizing governments and communities all over the world to put in place programs and policies aimed at poverty eradication and in addressing socio-economic development, particularly in Africa.

 Goals Not Met

“It is a well-known reality that our continent, particularly sub-Saharan Africa, did not achieve the targets that were set in the MDGs. It was for this reason that we insisted that the Sustainable Development Goals should continue the unfinished business of the MDGs,” said Zuma.

Zuma said, if Africa was to develop faster, “we need to address certain constraints”. He said these constraints included inadequate infrastructure, high dependency on primary products, high exposure to commodity price volatility, limited investment in research and development, science, innovation and technology, low private sector investment and skills inadequacy.

“Our National Development Plan is also in line with the drive for industrialization of Africa. This will contribute to the eradication of poverty, reduce inequality and unemployment, and will also contribute positively to global growth and prosperity. “It is therefore imperative that Africa and the least developed countries, which were left behind in previous industrialization processes, must not be excluded from the 4th or new industrial revolution.”