HLP key messages
- To eradicate underdevelopment and poverty and address the Sustainable Development Goals (SDGs),
it is very important to address the issue of domestic resource mobilization. A critical element in the mobilization of these resources is the curtailment of IFFs from the continent. Failure to do this threatens the possibility of achieving the SDGs. The problem of IFF on the continent has been further compounded by the COVID-19 pandemic.
- Over a period of 50 years prior to 2015, it is estimated that Africa lost more than one trillion US dollars to illicit financial flows. This is roughly equivalent to the amount of the official development assistance that the continent received during the same period.
- The HLP has identified the three perpetrations of IFFs – illicit financial practices by commercial entities, organized crime, and looting of public funds. Cutting across these three channels is the important issue of corruption, and the HLP has delivered key recommendations to counter them in its report.
- The Assembly of the African Union Heads of State and Government has adopted this report, thus transforming the recommendations into policy positions that are binding on all Member States. This adoption represents a very important progress indicating that all African countries have an agreed framework for the interventions needed to curtail illicit financial outflows. The Third International Conference on Financing for Development (FfD3) also made a global commitment to combat these outflows.
- The African Union Heads of State and Government have requested the HLP to continue supporting Member States in the evaluation of their efforts to implement the recommendations. This support is important to ensure that the continent takes the necessary steps to combat IFFs and to highlight the capacity challenges faced by Member States in implementing the recommendations.
- In line with this and with the view to include non-governmental stakeholders in the IFF work, the African Union and the HLP established a consortium of institutions dedicated to combatting IFFs from Africa.
- IFFs is an African problem with a global solution, therefore, we need to establish a strong and inclusive global financial architecture to address the problem. It is the hope of the HLP that the Global FACTI Panel will help address the matters of policy coherence and the necessary international architecture.
- There are three principal requirements to address the challenges in stemming IFFs from Africa. The first is the need to strengthen the capacity of the African Union to support the initiative. Second is the need to establish a global coherence of what has been agreed by African and non-African countries on efforts to curtail IFFs. The third is the need to develop a global mechanism that will ensure complete adherence to the implementation of these agreements. Addressing these challenges is critical to the achievement of the SDGs and this is further emphasized by the negative impact of COVID-19.