The 2019 Annual Meetings of the African Development Bank Group will be held from 11-14 June 2019, in Malabo, Republic of Equatorial Guinea. Find out more
More African countries should sign-up to the ‘Partnership on Illicit Finance’ (PIF), an initiative formed in July 2014 during the US-Africa leaders’ summit. That was the call made Thursday by Marisa Lago, Assistant Secretary for International Markets and Development in the US Treasury, while speaking as a panelist in a session at the ongoing African Development Bank Annual Meetings in Lusaka.
Since its establishment almost two years ago, just eight African countries have joined as members; these include Burkina Faso, Kenya, Liberia, Mauritius, Niger, Senegal, Sierra Leone and the United States.
At a side event on the fourth day of the ongoing AfDB meetings, representatives of the eight member countries sat on a panel whose purpose was to launch their respective national plans on what they intend to do to combat illicit financial flows.
However, there was no launch as it emerged that only two of the eight members, Senegal and the United States, had completed drafting their national plans.
Rotich Henry Kiplagat, Kenya’s Minister of Finance, when asked by the session moderator about the progress of his country’s national plan against illicit financial flows, said it would be ready, ‘very soon.’
A representative from Liberia informed the panel that her country had finalized preparing the framework for the national plan; however, she noted that her government needed help to address serious ‘capacity challenges especially in the national revenue body.’
Without any plans to launch, the session was spent by panelists discussing their respective efforts in combatting corruption and general illicit trade in their countries.
Concluding remarks were provided by Lago, who underscored the need for African countries to unite and coordinate their efforts in the fight against illicit financial flows.
“This is a partnership of the willing. While we encourage more countries to join the partnership, it is important for current members to finalize their national plans so that we embark on implementation,” she said.
AfDB pledges firm support
The President of the AfDB, Akinwumi Adesina, who delivered the opening remarks, pledged the Bank’s support to African efforts in combating illicit financial flows out of the continent and called for more accountability and transparency in the management of public resources.
“We are talking about development, but development needs resources. Whether its health, education or infrastructure, it doesn’t matter what you are talking about; it all requires money,” said President Adesina.
President Adesina noted that although the money to finance development is available, it is literally stolen and ends up in individual pockets.
He commended the support from the US Treasury noting that international cooperation is important in helping African countries to counter the deep pockets of multi-nationals that get away with committing tax injustice because they have the best legal brains in the world as their tax-lawyers.
Adesina wants to see more support going to people engaged in exposing illicit trade operations and finances such as whistle blowers, civil society, parliaments, tax administration and the press.
“Africa may have a lot of poor people, but we are by no chance a poor continent. In terms of the value of the discovered natural resources that Africa has, it is about US $82 trillion,” he said, adding that with proper management and exclusive usage of the resources, poverty can be defeated.
He said the African Development Bank is currently developing its own strategy in how it can provide technical support and capacity building to support in the fight against illicit flows and said he is looking forward to working with the US Treasury in these efforts.
Through its African Natural Resources Centre, the AfDB, Adesina said, is already providing technical support and expertise to African countries on how to sustainably manage their natural resources in inclusive ways that benefit the countries’ citizens.
“We also have the Africa Legal Support Facility, which has smart lawyers that help countries review agreements and advise on how to negotiate,” he said.
The session heard that tax fraud and evasion account for the vast majority of illicit financial flows from Africa and that these flows deprive governments of essential revenues needed for development.
A joint study conducted by the Bank Group and the Global Financial Integrity (GFI) found that between 2000 and 2009, some US $30.4 billion per annum flowed out of Africa, mostly in the form of IFFs.
According to GFI, Africa loses more to illicit flows than what it gets in donor aid. The statistics indicate that for every US $1, poor nations receive in development aid, an estimated US $10 flows illicitly abroad.
During the U.S.-Africa Leaders’ Summit in July 2014, African leaders and President Obama agreed to establish the Partnership on Illicit Finance to combat illicit finance and the damage it causes to the people of Africa. The commitment to this partnership was re-affirmed during the Financing for Development conference in July 2015.
Earlier this year, in February, PIF members met in Dakar, Senegal, for a workshop to discuss and refine draft action plans a head of a Sub-Ministerial Meeting in Washington in the margins of the World Bank-IMF Spring Meetings.
The aim of the session at the AfDB meetings on Thursday was to review the progress made thus far in the development of those action plans and to share experiences with countries that are yet to subscribe to the partnership.