Report blames multinationals for illicitly transferring most of the $1.5 trillion made in Africa each year

Abstract

A report has chastised multinational corporations for the illicit transfer of most of the $ 1.5 trillion they make in Africa each year back to the developed countries, draining hard currency reserves from the continent, stimulating inflation, reducing tax collection and deepening income gaps. The report on Illicit Financial Flows from Africa: Scale and Developmental Challenges is adamant about the role of multinational corporations in what some call Africa’s greatest economic sabotage, because it “perpetuates Africa’s economic dependence on other regions”, it says. The report makes a useful distinction between illicit financial flows and capital flight quoting the United Nations, Global Financial Integrity, the World Bank and others institutions which have defined “IFF as money that is illegally earned, transferred, or utilized.” “The focus on hidden resources and their potential impact on development places the issue of capital flight firmly in the broader realm of international political economy which emphasizes the role of governance at both the origin as well as at the destinations.