The High-level Panel on Illicit Financial Flows from Africa was formed in February 2012 as a result of Resolution 896(XLIV) from a significant joint meeting of African finance ministers and the African Union. Under the leadership of former South African President Thabo Mbeki, the Panel unites esteemed experts from within Africa and around the world, all dedicated to tackling the issue of IFFs and their implications for the continent’s progress.
The Panel was tasked with exploring the scale and nature of illicit financial flows from Africa, evaluating their negative impacts on economic growth and sustainable development. Its efforts were based on thorough research, regional discussions, and an advocacy initiative called Track It Stop It Get It. The culmination of the Panel’s work was the final report presented in January 2015 at the Twenty-Fourth Ordinary Session of the AU Assembly, which received the approval of African Heads of State and Government. The Assembly subsequently issued a Special Declaration on illicit financial flows, emphasizing the need for ongoing advocacy and collaboration among African nations and their international partners to enhance awareness and encourage decisive action.
Despite the aforementioned initiatives by the African Union and African Heads of State and Government, the UN Conference on Trade and Development’s Economic Development in Africa Report 2020 highlights the profound economic and developmental repercussions of illicit financial flows on the African continent. Annually, Africa is estimated to lose around $88.6 billion, which represents 3.7% of its GDP, due to illicit capital flight driven by factors such as tax evasion, trade mis-invoicing, criminal activities, and corruption. This outflow is nearly equal to the total incoming funds from official development assistance and foreign direct investment, which significantly hampers Africa’s financial ability to achieve its Sustainable Development Goals. From 2000 to 2015, illicit capital flight reached a staggering $836 billion, surpassing Africa’s external debt and effectively positioning the continent as a “net creditor” to the global economy.