Illicit Financial Flow: Report of the High Level Panel on Illicit Financial Flows from Africa
Commissioned by the AU/ECA Conference of Ministers of Finance, Planning and Economic Development
February 2015 :: 126 pages
Report pdf: Illicit Financial Flow
[Excerpts from Overview and Report]

The 4th Joint African Union Commission/United Nations Economic Commission for Africa (AUC/ECA) Conference of African Ministers of Finance, Planning and Economic Development was held in 2011. This Conference mandated ECA to establish the High Level Panel on Illicit Financial Flows from Africa. Underlying this decision was the determination to ensure Africa’s accelerated and sustained development, relying as much as possible on its own resources.
This Report reflects the work that the High Level Panel on Illicit Financial Flows has carried out since it was established in February 2012, particularly to:
:: Develop a realistic and accurate assessment of the volumes and sources of these outflows;
:: Gain concrete understanding of how these outflows occur in Africa, based on case studies of a sample of African countries and;
:: Ensure that we make specific recommendations of practical, realistic, short- to medium-term actions that should be taken both by Africa and by the rest of the world to

1.1.1 Illicit financial flows as a development challenge for Africa
Over the last 50 years, Africa is estimated to have lost in excess of $1 trillion in illicit financial flows (IFFs) (Kar and Cartwright-Smith 2010; Kar and Leblanc 2013). This sum is roughly equivalent to all of the official development assistance received by Africa during the same timeframe.2 Currently, Africa is estimated to be losing more than $50 billion annually in IFFs.
But these estimates may well fall short of reality because accurate data do not exist for all African countries, and these estimates often exclude some forms of IFFs that by nature are secret and cannot be properly estimated, such as proceeds of bribery and trafficking of drugs, people and firearms. The amount lost annually by Africa through IFFs is therefore likely to exceed $50 billion by a significant amount…
…The resource needs of African countries for social services, infrastructure and investment also underscore the importance of stemming IFFs from the continent. At current population trends, Africa is set to have the largest youth population in the world. By 2050 the median age for Africa will be 25 years, while the average for the world as whole will be about 36 years (United Nations Population Division, 2012). Infrastructure constraints also act as a brake on growth, just as do the low savings and investment rates of the continent. In 2012 gross capital formation rates in Nigeria and South Africa were 13 per cent and 19 per cent, respectively, as compared to a rate of 49 per cent in China and 35 per cent in India (United Nations Statistics Division, 2014; World Bank, 2014). Yet Africa is estimated to need an additional $30–$50 billion annually to fund infrastructure projects (Foster and Briceño-Garmendia, 2010; African Development Bank, 2014).

Findings of the HLP Report on IFFs
:: Finding 1: Illicit financial flows from Africa are large and increasing
:: Finding 2: Ending illicit financial flows is a political issue
:: Finding 3: Transparency is key across all aspects of illicit financial flows
:: Finding 4: Commercial routes of illicit financial flows need closer monitoring
:: Finding 5: The dependence of African countries on natural resources extraction makes them vulnerable to illicit financial flows
:: Finding 6: New and innovative means of generating illicit financial flows are emerging
:: Finding 7: Tax incentives are not usually guided by cost-benefit analyses
:: Finding 8: Corruption and abuse of entrusted power remains a continuing concern
:: Finding 9: More effort needed in asset recovery and repatriation
:: Finding 10: Money laundering continues to require attention
:: Finding 11: Weak national and regional capacities impede efforts to curb illicit financial flows
:: Finding 12: Incomplete global architecture for tackling illicit financial flows
:: Finding 13: Financial secrecy jurisdictions must come under closer scrutiny
:: Finding 14: Development partners have an important role in curbing illicit financial flows from Africa
:: Finding 15: Illicit financial flow issues should be incorporated and better coordinated across United Nations processes and frameworks