Wayne Lumbasi
Africa is losing billions of dollars every year through illicit financial flows, tax evasion, and corruption. The African Union (AU) estimates that the continent loses around $89 billion annually, roughly 3.7% of its GDP. This money, which could fund schools, hospitals, roads, and other essential services, instead leaves the continent, weakening its economies and slowing development.
A large portion of these outflows comes from Africa’s mineral and extractive industries. High-value, low-weight resources such as gold, diamonds, platinum, and rare minerals are particularly vulnerable.
Companies involved in mining often undervalue exports or overstate costs, a practice known as trade mispricing, allowing profits to be shifted out of African countries with minimal taxes paid locally. In addition, some mineral resources are illegally exported or smuggled, bypassing official channels and denying governments the revenue they need.
Studies show that nearly half of all illicit financial flows from Africa originate from these extractive sectors, making the wealth that could transform communities disappear into offshore accounts.
The impact on everyday life is significant. Funds that could improve healthcare, education, and infrastructure instead disappear. According to the United Nations Conference on Trade and Development (UNCTAD), reducing illicit financial flows could help African countries close a major part of the financing gap needed to achieve the Sustainable Development Goals (SDGs).
Governments are taking steps to address the problem. Around 41 African countries now share tax information with each other to track hidden money and recover lost revenue. Reforms, stronger enforcement, and better financial oversight have already reclaimed billions of dollars in unpaid taxes and penalties.
Still, challenges remain. Much of the illicit money moves through foreign financial centers, making it difficult to trace. Greater transparency, stronger institutions, and cross-border cooperation are essential to stop these outflows and ensure that Africa’s wealth benefits its people.
Losing $89 billion every year slows Africa’s growth and limits opportunities for its citizens. Capturing even a portion of this money could provide governments with the resources to invest in schools, hospitals, infrastructure, and other projects that improve living standards and secure a stronger future for the continent.
CORRUPTION REPORTS IN AFRICA
MAURITANIA JAILS EX-PRESIDENT AZIZ FOR 15 YEARS IN LANDMARK CORRUPTION VERDICT
EX-MINISTER SENTENCED TO FIVE YEARS FOR CORRUPTION IN GUINEA
UGANDAN WOMEN STAGE NAKED PROTEST AGAINST CORRUPTION
