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Nigeria, others lose over $1.7 trillion to illicit financial flows in 50 years

Africa as a continent has lost well over $1.7trillion to illegal remittances and illicit financial outflows in the last 50 years.

The Minister of Finance and Economic Planning of Rwanda, Claver Gatete, said illicit financial flows is a source of concern to the continent, especially as access to finance and capital was a key constraint to growth and economic development. He traced the sweeping recession facing some big African nations to the cumulative effects of the illicit act over the years.

Here in Nigeria, it would be recalled that illicit movement of public funds and overseas diversion have been the bane of the federal government as the treasury seems to be in reds.

Besides, President Muhammadu Buhari recently revealed that he would have ran away when he took over last year after observing that the national treasury was apparently empty, but remained because of his love for changing Nigeria for good.

In a press release sighted by Business Hilights.com.ng, Gatete noted that over the last 50 years, Africa had lost in excess of $1.7 trillion to illicit financial flows, adding that the amount roughly equalled all the official development assistance the continent received during the same period.

He decried that the menace of illicit financial flows from Africa in general is a major source of leakage of funds. The continent is losing an estimated $50 to $60 billion a year, making the need to initiate a more purposeful effort at curbing the flows more urgent than ever.

Speaking at the opening of the third Annual Customer Due Diligence and Corporate Governance Forum of the African Export-Import Bank (Afreximbank), he revealed that the illicit activities have significant implications for growth and economic development of Africa.

According to him, African commercial banks have been turned into momentary useless transit ventures for the illicit deals.

While nothing that the act over the years has reduced financial soundness of banks and corporate bodies, moving funds illegally from Africa by banks undercut legitimate economic activities, discourage investment, bred suspicion and undermine government legitimacy.

He therefore, urged African financial institutions, regulatory bodies and governments to work together to establish mechanisms that would ensure a healthier financial landscape and help prevent financial crimes as well as strengthen investors’ confidence on the continent.

Earlier in his welcome address, Dr. George Elombi, Afreximbank Executive Vice-President in charge of Corporate Governance and Legal Services, announced that Afreximbank was preparing to launch an online African Customer Due Diligence Repository Platform to provide a centralized source of primary data required to conduct customer due diligence checks on African counterparties.

“That platform would allow subscribers to conduct due diligences at a low cost, thereby decreasing the cost of trade finance in Africa.