United Nations Economic Commission for Africa - IFF

Forthcoming African Governance Report to tackle Institutional Architecture to address IFFs from Africa

Minilik.Demissie — Tue, 13 Nov 2018 08:01:26 +0000

Addis Ababa, 12 November 2018 (ECA) - The Economic Commission for Africa will assemble a group of experts this week in Addis Ababa for a discussion on how to enrich and shape the forthcoming sixth edition of the African Governance Report (AGR VI ) themed: ‘Institutional Architecture to Address Illicit Financial Flows from Africa’.

Expected at the meeting are experts from governments, research and academic institutions, think tanks from within and outside Africa, as well as staff from ECA and other UN entities.

AGR is a biennial publication, which assesses and monitors progress towards effective governance in African countries. Each edition discusses a different topic relevant to governance in Africa.

“The Addis Ababa Action Agenda, the 2030 Agenda and Agenda 2063 all highlight the importance of tackling IFFs. Indeed, stopping illicit financial flows from Africa is a key policy priority for the continent, and for the world,” says Adam Elhiraika, Director, Macroeconomic Division at the ECA.

Mr Elhiraika adds that this is reflected in the African Union Special Declaration on Illicit Financial Flows adopted by African Heads of State and Government in 2015, as well as the adoption of target 16.4 of the United Nations’ Sustainable Development Goals to reduce illicit financial flows worldwide.

“Yet available estimates indicate that Africa continues to lose up to $100 billion annually through illicit financial flows. As such, there are clearly gaps in the institutional and policy architecture to prevent IFFs in Africa,” he says.

The report will draw on insights from ECA’s previous work on illicit financial flows to provide a more systematic, comprehensive and in-depth treatment of how African countries can best develop and use institutions to tackle IFFs.

The meeting will review, discuss and provide feedback and inputs, which will validate and enrich the content and structure of the concept note and lay the groundwork for the preparation of the report. Experts will also contribute to on-going dialogue on increasing the knowledge of African countries on existing and new institutions and policies to effectively help tackle illicit financial flows at national level. In addition, experts will make proposals for strengthening and clearly articulating measures based on African interests that can help curtail IFFs at the regional and global levels.

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org

“Fighting Corruption and Illicit Financial Flows (IFFs) in Nigeria is non-Negotiable” - President Buhari

Minilik.Demissie — Sat, 13 Oct 2018 08:57:33 +0000

Language English

Featured Image:

Focus Group:

IFF

Linked Content:

“Fighting Corruption and Illicit Financial Flows (IFFs) in Nigeria is non-Negotiable” - President Buhari

Minilik.Demissie — Sat, 13 Oct 2018 08:42:54 +0000

Abuja, Nigeria, October 11, 2018 (ECA) – “For my administration, fighting corruption and Illicit Financial Flows (IFFs) in Nigeria is non-gegotiable’, This was the statement by Muhammadu Buhari, President of the Federal Republic of Nigeria to Thabo Mbeki, former President of the Republic of South Africa and Chair of the AU/ECA High-Level Panel on Illicit Financial Flows from Africa.

The Chair visited the President who is also the current Champion of AU Anti-Corruption Campaign, to follow up on the efforts of AU Member States to implement the recommendations of the High-Level Panel Report (endorsed by the AU in 2015) and ultimately tackle IFFs nationally. The visit also saw the Chair call upon the President in his capacity as the AU Anti-Corruption Champion to lead the efforts to engage action from other AU Member States towards tackling IFFs at the national, regional and continental level.

Prior to the Presidential visit, Mr. Mbeki met with representatives of the Ministries, Departments and Agencies (MDAs) of the Federal Government of Nigeria which deal with Financial and legislative matters to gain an understanding of the country’s ongoing efforts to tackle Illicit Financial Flows.

In his remarks to the MDAs, the Mbeki recalled the 2015 Special Declaration to address IFFs, which was a realization by African leaders of the excessive losses due to illicit outflows. “The view was that the continent was losing resources which should have been available for its development to these illicit outflows,” he said. He emphasized the level of losses from IFFs, which at the time of the Panel’s Report was 50bn USD annually, but has now grown to about 80bn annually. He also indicated on a more positive note that, “Africa has led this agenda and brought it to global attention. This was evident when the African Heads of States asked our Panel to help address this issue”.

Mr. Mbeki highlighted some of the recommended actions to address these IFFs saying that Nigeria and in turn, all other AU member states need legislation to deal with money laundering, financial intelligence and tax evasion. He underlined that this issue also requires action from global partners stressing, “since these funds leave the continent to destination countries, this problem cannot be solved by Africa alone. He acknowledged the capacity constraints nationally and continentally, saying, “As Africans, we must say that having identified the nature and size of the problem, we must work to address the issue. We need to act on this matter in any capacity necessary.”

The Deputy Executive Secretary and Chief Economist of the United Nations Economic Commission for Africa (ECA), Abdalla Hamdok for his part said that as a result of the Chair’s leadership, Africa was able to put the challenge of illicit finance on the global map. He referred to the Panel’s work and Report, whose impact has led to several important continental and global frameworks, including the Addis Ababa Action Agenda, as well as its inclusion in the Sustainable Development Goals.

As the Chair is required to report back to the AU Assembly of Heads of States and Government annually on the progress of implementing the recommendations of his Panel’s Report, Mr. Hamdok said, “Several actions are being carried out, including this visit to Nigeria to determine the state of reaction to this issue, as well as “a technical project which is being worked on by the ECA to help capacitate AU member states against IFFs. Mr. Hamdok also stressed that all these efforts and those not yet mentioned are still, however, based on political will, which is crucial to reducing IFFs from the continent.

Abubakar Malami, Attorney General of the Federation (AGF) for his part elaborated on Nigeria’s efforts to implement strategies to curb corruption and reduce IFFs. “We have taken major multi-dimensional policy decisions relating to institutions, legislations…and above all, recognizing the need for international collaboration as it relates to the fight against corruption and the minimization of illicit financial flows”. He noted that through legislative processes, Nigeria has “succeeded in establishing and capacitating institutions which are mandated with the statutory role of working to enforce financial regulations as well as tackle various misconducts including corruption and IFFs.”

He also detailed the efforts of the country in fighting corruption and IFFs through the deployment of relevant technology and international collaboration. Additionally, he highlighted the need for collaboration to make it more difficult for IFF perpetrators to move freely, invest in businesses and benefit from the proceeds of crime. He stressed that “we must work to repatriate these funds from the external perpetrators while working to detain them.

The Permanent Secretary of Finance, Mahmoud Isa-Dutse delivered remarks on behalf of the Minister of Finance for Nigeria. In the speech, he commended the Chair and Panel for fighting this plague saying that IFFs have robbed Africa of the required wealth to help build schools, hospitals, roads and other necessary infrastructure. He added that the quest for Africa’s financial development will be accelerated if the efforts to recover these lost funds are successful and the continent’s development will no doubt receive a necessitated boost. In this regard, he spoke about the work of the Nigerian Extractive Industry Transparency Initiative (NEITI), which is being led by the Minister of Finance. This effort has helped the country recover lost assets from taxes because of the increased transparency.

The two-day event culminated with a technical workshop with Thabo Mbeki. Raymond Baker, President, Global Financial Integrity and Member of the High-Level Panel as well as the Secretariat of the Panel meet with the representatives of the financial agencies and departments. Part of the objectives of the workshop was to discuss the ECA’s proposed Development Assistance Project which aims to support Nigeria and other member states in the fight against IFFs. Following this visit, the Secretariat is expected to further engage the government of Nigeria and foster collaboration to build its capacity to stem IFFs from the country.

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org

Illicit financial flows continue to impede Africa’s development, says ECA’s Boko at HLPD 2018

eskinder.tsegaye — Wed, 11 Jul 2018 11:26:40 +0000

Language English

Featured Image:

Focus Group:

IFF

Linked Content:

Illicit financial flows continue to impede Africa’s development, says ECA’s Boko at HLPD 2018

eskinder.tsegaye — Wed, 11 Jul 2018 11:22:42 +0000

Cairo, Egypt, 11 July 2018 (ECA) – African countries are committed to mobilizing adequate and predictable resources to finance the sustainable development goals agenda but they continue to be impeded by a number of factors, chief among them the loss of more than $50 billion annually through illicit financial flows, says Economic Commission for Africa’s (ECA) Sylvain Boko.

Speaking at the on-going three-day High-Level Policy Dialogue on Development Planning in Africa, which is underway in Cairo, Egypt, Mr. Boko, Principal Regional Advisor and Head of Development Planning and Statistics at the ECA, said it was unacceptable that Africa’s development agenda continued to be hampered by such illegal actions.

“It is estimated that $100 billion a year, about four percent of Africa’s GDP, have been illegally earned, transferred, or used, much of it due to mis-invoicing. This retards Africa’s growth; weakens public institutions and rule of law; discourages the culture of paying taxes and value-addition to natural resources; and results in countries over relying on official development assistance,” said Mr. Boko.

He said addressing IFFs on the continent requires hard data on the scope of IFFs, removing legal loopholes that facilitate IFFs, designing cohesive international agreements to address IFFs; and developing local and national capacity to address IFFs, among others.

Mr. Boko said challenges to SDG financing on the continent include own-source revenue generation, access to ODAs and foreign direct investments, and new or innovative long-term financing; and international capital markets; global economic downturns, natural disasters, geopolitical tensions or conflicts; institutional and administrative capacities and insufficient or inefficient intra-continental and international trade.

The ECA Principal Regional Advisor said while national development planning processes embodied resource mobilization, many countries were yet to effectively link the two.

Overall, he said, the scale and diversity of SGDs financing available was growing across the region.

“This offers significant potential to drive regional progress toward realizing the SDGs,” said Mr. Boko, adding domestic resource mobilization improved substantially in recent decades in Africa, but tax-to-GDP ratios were still below the 25 percent threshold deemed sufficient.

“The challenges are many and varied, but not insurmountable. In this regard, countries must build technical, legal and administrative capacity for effective public financial management,” he said.

He added that accurate and robust data was necessary for robust SDGs financing frameworks and monitoring resource flows, including IFFs.

The High-Level Policy Dialogue on Development in Africa is being held under the theme; Financing the Sustainable Development Goals in Africa: Strategies for Planning and Resource Mobilization. The meeting is being attended by high level participants from member States, including Ministers of Planning and Finance, Director Generals of Planning Commissions and others.

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org

CoDA Launches Office at The African Union Headquarters in A Strategic Move to Strengthen the Fight Against Illicit Financial Flows

eskinder.tsegaye — Thu, 24 May 2018 07:25:17 +0000

30 January 2018, Addis Ababa, Ethiopia; The African Union Commission officially opened the Coalition for Dialogue on Africa (CoDA) office at the African Union Headquarters in Addis Ababa, Ethiopia. The launch was officiated by the African Union Commission Deputy Chairperson Amb. Kwesi Quartey, H.E Olusegun Obasanjo, Former President of the Federal Republic of Nigeria and the Chair of the CoDA Executive Board and H.E Thabo Mbeki, Former President of the Republic of South Africa and Chair of the High Level Panel on Illicit Financial Flows (IFFs) from Africa, an indication of renewed efforts towards stemming the Illicit Financial Flows from Africa.

H.E Obasanjo described the launch as an important step in the efforts to elevate the debate and dialogue on matters of relevance to Africa. “This now gives us the benefit of being in the most strategic and engaging location for the realization of the objectives we seek, to address the key issues that Africa continues to grapple with”, he observed. He added that the CoDA office would primarily raise awareness and advocacy, across Africa and globally, on the magnitude of Illicit Financial Flows, particularly given the hidden nature of these illicit financial practices, as well as the deliberate and systematic steps taken to hide such outflows. H.E Obasanjo stressed that stemming IFFs is a shared responsibility of both the source (Africa) and destination countries, to assist in the prevention and recovery of these illicit outflows as well as the prosecution of the concerned perpetrators.

H.E Mbeki, while asserting the urgent need for Africa to implement the recommendations of the High Level Panel on Illicit Financial Flows from Africa, noted the need for the continent to address the root causes of IFFs which include weak tax administration, trade mispricing, money laundering, drugs and arms trafficking, among other causes. He further underscored the need for coordinated action by all players to curb IFFs from Africa saying “IFFs puts an enormous strain on our domestic resources, foreign exchange reserves and affects our international development cooperation. We acknowledge that this is an African problem with global solutions”.

On his part, Amb. Kwesi indicated that the launch of the office and the special focus on IFFs was timely, particularly at a time Africa is keen on domestic resource mobilization and also, in line with African Union theme of the 2018 “Winning the fight against corruption, a sustainable path to Africa’s transformation”. The Deputy Chairperson stated, “Every year, at least 50 billion dollars is lost to illegal financial activities while our people continue to suffer from poverty, hunger, diseases, poor education and infrastructure and other unmet basic needs. This closer and strengthened

collaboration provides us an opportunity to consolidate the gains in the fight against illicit financial flows over the years, and to seek greater impact for the benefit of our citizenry.”

In his remarks, Mr. Abdoulie Janneh, the Alternate Chair of the CoDA Executive Board, expressed appreciation to both former Heads of States for their unwavering commitment and efforts towards Africa’s development. He further recognized the continuous support of the African Union Commission to CoDA, stating that the new office represents Africa’s stronger stamp of ownership of the platform. He emphasized the challenge of Africa’s financing, aggravated by illicit financial flows from the continent, and which continue to impact negatively on development. In this regard, he indicated that CoDA will focus, mainly, on the implementation of the recommendations of the Report of the High Level Panel on Illicit Financial Flows as part of its mandate to stem the outflows from the continent.

The occasion was also attended by the Deputy Executive Secretary of the United Nations Economic Commission for Africa, Dr. Abdalla Hamdok, AU Commissioner for Economic Affairs Mr. Victor Harrison, Dr. Ibrahim Mayaki, the Chief Executive Officer of the New Partnership for Africa’s Development (NEPAD), Mr. Erastus Mwecha, the immediate Former Deputy Chairperson the African Union Commission, the African Capacity Building Foundation Executive Secretary Prof. Emmanuel Nnadozie, Dr Aida Opoku-Mensah, the UNECA Executive Director’s Special Advisor on Post 2015 Development Agenda, Executive Director of the CoDA Secretariat, Ms. Souad Aden-Osman among other dignitaries.

African Union Commission and The Coalition for Dialogue on Africa Deepen Collaboration on Curbing Illicit Financial Flows

eskinder.tsegaye — Thu, 24 May 2018 07:21:15 +0000

24 January 2018, Addis Ababa, Ethiopia; The Deputy Chairperson of the African Union Commission, H.E. Amb. Kwesi Quartey, held a bilateral meeting with the Alternate Chair of the Coalition for Dialogue on Africa (CoDA), Mr. Abdoulie Janneh to discuss, among other issues, the illicit Financial Flows and the relocation of the CoDA office from the UNECA to the AU Headquarters. The Deputy Chairperson noted the relevance of having CoDA at the AU Commission, observing its role as an alternative platform for dialogue and debate on key issues related to Africa’s development agenda.

Mr. Janneh, accompanied by the Executive Director of the CoDA Secretariat, Ms. Souad Aden-Osman, briefed the Deputy Chairperson on the progress on stemming the Illicit Financial Flows from Africa through the implementation of the recommendations of the “AU/UNECA High Level Panel on Illicit Financial Flows from Africa”, led by H.E Thabo Mbeki, former President of the Republic of South Africa.

Amb. Kwesi and Mr. Janneh underscored the magnitude of the Illicit Financial Flows, which continues to impact negatively on development, similarly contributing to the challenges of mass migration and terrorism in the continent. Key findings of the High Level Panel on Illicit Financial Flows reveal Africa is losing approximately 50 billion US dollars each year. This amount exceeds what Africa receives in financial aid. The continent has over the last 50 years, lost in excesses of one trillion US dollars in Illicit Financial Flows, an equivalent of the Official Development Assistance (ODA) that the continent has received during this period. The trend has been linked to commercial activities which account for 65% of the IFFs mainly through multinational companies, criminal activities accounting for 30% through cross-border trade and corruption leading to 5% of the IFFs.

Mr. Janneh expressed CoDA’s gratitude to the African Union Commission for its continued support, underscoring the nexus between curbing IFFs as a means of enhancing the ongoing efforts on domestic resource mobilization.

The Deputy Chairperson, on his part, similarly conveyed his appreciation to both the current Chair of the CoDA Executive Board, H.E Olusegun Obasanjo, former President of the Federal Republic of Nigeria and Mr. Janneh, for their commitment and continuous efforts towards Africa’s development.

Note to Editors

Founded in 2009, CoDA exists as a special initiative of its three convening organizations – AUC, ECA and AfDB. It has successfully worked as a platform for the ongoing engagement in rigorous and candid dialogue on crucial questions of vital interest to the future of the continent. It is policy-oriented, working in collaboration with other African and international organizations to address the issues of Africa’s security, peace, governance and development through inclusive dialogue between diverse and influential groups of stakeholders drawn from government leaders, policy makers, civil society, the private sector and the media. It also advocates their recommendations effectively to influence policy. In addition, the institution aims to build strong partnerships and synergies with leading African research institutions with the objective of grounding its work on solid scientific findings. It aims to place particular attention on bridging the gap between the research and policy making communities in Africa.

Experts call for combined forces to stem illicit financial flows

eskinder.tsegaye — Mon, 14 May 2018 20:21:21 +0000

Addis Ababa, 13 May 2018: Experts have called for combined forces to stem the illicit movement of money and capital from one country to another amid revelations that illicit financial flows from Africa were stifling the continent’s development progress.

Speaking at a high-level discussion during the UN Economic Commission for Africa’s (ECA) Conference of Ministers, Abdalla Hamdok, the organisation’s Deputy Executive Secretary, said money illegally transferred across borders in addition to aggressive tax avoidance now amounted to a loss of $100 billion annually for African states. He remarked, ‘I think the debate is not about the seriousness of the issue. The challenge is how we can arrest it,’ and added, ‘This is an African problem. The only way we can resolve together is by working together with our partners.’

Nara Monkam, Research Director at the Africa Tax Administration Forum, shone a spotlight on the destination of funds and profile of those engaged in the transferring the money: ‘Some multi-national corporations employ tax evasion, trade mis-invoicing and abusive transfer pricing.’ According to the Director, inter-country cooperation at a continental level was required to tackle such practices. In addition, given that illicit financial flows from Africa involve actors from across the globe, and that the laws and policies of non-African jurisdictions have a serious impact on illicit flows from Africa, it has become a priority to review the adequacy of global frameworks in tackling illicit financial flows. Ms. Monkam also added there was also a need for greater funding for technical assistance on tax matters and improvements in tax administrations.

A call was also made to amplify advocacy for the return of illicit financial assets by Akingbolahan Adeniran, Rule of Law Advisor to the Vice President of Nigeria. He argued, ‘In the domestic setting, receiving a stolen asset is a crime. Why is receiving stolen asset from a victim country not a crime?’ In addition to the loss of finances for affected states, flows have a number of other negative effects, such as undermining governance, contributing to environmental degradation, skewing income distribution, deepening inequality, and exacerbating conflicts, particularly in resource-rich countries.

The commitment of governments was deemed crucial by Professor Annet Wanyana Oguttu, a tax law expert at the University of South Africa, called for political to combat illicit financial flows. She said, ‘It all bogs down to political will,’ and added, ‘many African countries have been dragging their feet.’

The event also saw the launch of two ECA publications, A Study on the Global Governance Architecture for Combating Illicit Financial Flows and Base Erosion and Profit Shifting in Africa: Reforms to Facilitate Improved Taxation of Multinational Enterprises. During the event, Abdalla Hamdok thanked the Government of Norway for funding the ECA High Level Panel on Illicit Financial Flows from Africa chaired by former South African President Thabo Mbeki and noted the country stood out as an ‘extremely progressive partner’. African countries have committed themselves to tackling these flows through target 16.4 of the UN Sustainable Development Goals and the 2015 Special Declaration of the Assembly of the African Union on Illicit Financial Flows.

For details about the conference, related videos and information for participants, visit:
https://www.uneca.org/cfm2018

For more on the Side Events:
https://www.uneca.org/cfm2018/pages/side-events-and-other-meetings

For details on the Regional Coordination Mechanism:
https://www.uneca.org/rcm19

Join the conversation at @ECA_Official: #2018COM ; #AfCFTA

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org

Tax base protection workshop ends with call for more support to strengthen Africa’s capacity

eskinder.tsegaye — Mon, 13 Nov 2017 08:28:11 +0000

Addis Ababa, Ethiopia, November 13, 2017 (ECA) – A four-day workshop on protecting the tax base of developing countries ended in Addis Ababa Friday with participants being urged to use the new skills and knowledge they gained through the Italian government-sponsored program in implementing more effective and efficient tax systems that will ensure more resources are harvested for Africa’s development.

Speaking at the end of the technical workshop attended by revenue and tax experts from 23 African countries, Aida Opoku-Mensah, ECA’s Special Adviser on the Post-2015 Development Agenda, thanked Italy saying it was one of the very few developmental partners willing to support programmes that can give capacity to African governments to broaden and protect their tax bases.

She said it was crucial for Africa to have the necessary support so countries can continue to strengthen their potential and by extension improve their domestic resource mobilization which in turn aids the continent to fund their development, in particular the African Union’s Agenda 2063 and the United Nations 2030 Sustainable Development Agenda.

“SDGs and taxation, when you look at them you think they are poles apart but if we can support African countries to better manage their tax administration and to be able to increase their domestic resource mobilization, with the right governance strategy, it can lead to the implementation of the SDGs and lead to the reduction of dependency on aid and also put African countries in the driving seat in terms of their development priorities,” said Ms. Opoku-Mensah.

She told participants, who received certificates at the end of the workshop, of a Memorandum of Understanding that will be signed by the UN Secretary General and the African Union Chairperson in January next year on the implementation of the SDGs and Agenda 2063.

“It is an important step because we are going to embed into this framework the work that has already started with you in these workshops to protect the continent’s tax base, going forward,” said Ms. Opoku-Mensah.

Participants also discussed Illicit financial flows (IFFs) through which Africa is losing an estimated $50 billion annually.

Curbing Illicit financial flows, they agreed, would strongly bolster the continent’s efforts to fund her own development.

Support

Giuseppe Sean Coppola, the Deputy Head of Mission at the Italian Embassy in Ethiopia, said his government will continue to support efforts to strengthen capacity in Africa for governments to broaden and protect their tax bases.

He said the availability of more resources to African governments can also improve their quest for regional integration, adding he hoped the training had been useful for participants so they can help protect their respective countries tax bases.

“Italy looks forward to continuing to engage with countries in the region and providing support to further strengthen their potential for domestic resource mobilization,” said Mr. Coppola.

“This is one step towards achieving Agenda 2030 and it’s also instrumental to achieving the AU’s Agenda 2063 and we are very pleased to be contributing to that.”

Elene Belleti of the United Nations Department of Economic and Social Affairs (UNDESA), which ran the workshop, said the training was part of efforts to implement the Addis Ababa Action Agenda (AAAA).

“We need to tackle Illicit financial flows because we cannot allow the leaking of resources from these countries to continue,” said Ms. Belleti.

“We want to tackle tax evasion but on the other hand we cannot only focus on the illicit component. We also have to focus on how to tackle tax avoidance and how to create more transparent tax systems; how to protect the tax base from erosion; how to prevent profit shifting and this I hope is part of the knowledge you gained during the past few days.”

Participants during the four days discussed cross-cutting subjects looking at specific issues related to tax base erosion, how to draft legislation to prevent that, international practices, environmental and extraction industry taxation.

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org

Africa needs to build capacity to curb illicit financial flows, says ECA's Opoku-Mensah

eskinder.tsegaye — Tue, 07 Nov 2017 14:04:43 +0000

Addis Ababa, Ethiopia, 7 November 2017 (ECA) – A four-day workshop on protecting the tax base of developing countries opened here Tuesday with Aida Opoku-Mensah, ECA’s Special Adviser on the Post-2015 Development Agenda, emphasizing the need to build the capacity of African nations so they can track, stop and repatriate funds lost through illicit financial flows (IFFs).

In opening remarks to the workshop that was organized by the United Nations Department of Economic and Social Affairs (UNDESA) with the support of the Italian Agency for Development Corporation, Ms. Opoku-Mensah said most developing countries do not have enough highly trained experts to prevent or punish perpetrators of tax avoidance and evasion.

“Financial outflows through illicit tax practices from developing nations can be reduced and stemmed only by enhancing and improving relevant capacities across the board,” she told participants, including representatives of member States working in their respective tax and revenue authorities.

International corporations remain some of the major culprits eroding tax bases in developing nations through a range of methods, including transfer pricing, tax evasion, aggressive tax avoidance and badly negotiated tax incentives.

“The impact of these illicit financial flows on the tax revenues and investment capital of developing countries is enormous,” said Ms. Opoku-Mensah.

“Regrettably, most developing countries lack the legislation and guidelines on proper taxation or effective units to address the problem.”

Africa is estimated to be losing at least $50 billion through illicit financial outflows every year, according to ECA’s report of the High-Level Panel on Illicit Financial Flows from Africa.

Ms. Opoku-Mensah said some countries on the continent were taking important steps in the right direction as they try to stem IFFs and protect their tax base.

Curbing illicit financial flows out of Africa, she said, would strongly bolster the continent’s desire to improve and rely more on domestic resource mobilization rather than aid to fund its development.

Ms. Opoku-Mensah said domestic resource mobilization would also help ensure Africa successfully delivers on the sustainable development goals agenda.

The ECA Special Advisor said the current spotlight on taxation of multinational corporations may help reduce conflict and increase cooperation between countries without the presence of binding and enforceable legal commitments.

UNDESA’s Harry Tonino said the workshop was part of a project to strengthen the capacity of developing countries to increase their potential for domestic revenue mobilization through enhancing their ability to effectively protect and broaden their tax base.

He said Agenda 2030’s call that no-one should be left behind requires each country to have lots of financial resources, which he said can be mobilized through taxation.

“In that regard it’s critically important for developing countries to adopt effective and efficient policies regarding tax matters,” said Mr. Tonino, adding these should be coordinated with international tax notes to be effective.

For her part, Ms. Ginevra Letizia, the Head of the Italian Agency for Development Cooperation, said taxes represent a stable source of finance that is critical to financing the implementation of the 2030 Agenda for sustainable development.

She said her country fully supports Africa’s quest to protect her tax base and strengthen her potential for domestic resource mobilization.

“The broad participation in this meeting shows the relevance and importance of this work for the region. This is also a great opportunity to have a broad-based discussion about how best to protect and broaden the tax base of countries in the region,” Ms. Letizia said.

Participants will in the next four days discuss practical ways on how to protect and broaden Africa’s tax base.

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org