African Countries Lose $90 Billion Annually to Illicit Financial Flows, Says AfDB Chief Economist”
Kevin Chika Urama, Chief Economist and Vice President at the African Development Bank, has raised alarm over the staggering loss of $90 billion annually to illicit financial flows in African countries. Speaking at the graduation ceremony of the first cohort of the Public Finance Management Academy for Africa (PFMA) in Abuja, Urama emphasized the urgent need for collective action to address this critical issue. The PFMA, a comprehensive initiative by the African Development Bank, focuses on capacity development in Public Financial Management (PFM) to enhance economic governance and knowledge management.
Key Points:
- Illicit Financial Flows Concern: Urama expressed deep concern about African countries losing $90 billion each year due to illicit financial flows. He called for collaborative efforts to rectify this situation, emphasizing the strategic importance of effective Public Financial Management (PFM) in promoting wealth creation and prudent management of public finances.
- Public Finance Management Academy: The PFMA, approved by the Board of Directors of the African Development Bank in June 2022, aims to address challenges in the PFM cycle. The academy covers thematic areas such as domestic revenue mobilization, macro-fiscal modeling, sustainable debt management, and efforts to curb illicit financial flows.
- Urgency in Tackling PFM Challenges: Urama stressed the urgency of addressing challenges within the PFM ecosystems, stating that despite Africa’s natural resource richness, financial challenges often arise due to mismanagement. He called for a concerted effort to enhance transparency and accountability.
- Graduation and Certification: The first cohort of the PFMA, consisting of 145 public officials from 45 African countries, graduated from the 18-month program. Fifty-two officials from 26 countries successfully completed the program, earning certification as PFM experts in their respective nations.
- Collaboration with Institutional Partners: Urama acknowledged the collaboration of institutional partners, including the International Monetary Fund, World Bank, and other key organizations, for their commitment to the success of the PFMA program.
- Call for Advocacy: Graduates were urged to be torchbearers in promoting transparency and accountability in their respective countries. They were encouraged to champion Africa’s efforts to efficiently manage resources and enhance productivity.
- Support from Nigerian Government: Tope Fasua, Special Adviser to the President on Economic Affairs in the Office of the Vice President, commended the PFMA’s comprehensive curriculum and efforts to respond to the urgent need for enhanced knowledge among public officials. He highlighted Nigeria’s support for such initiatives and encouraged their expansion to other areas of capacity development.
- Valedictory Speech: Isaac Kurasha, a PFMA graduate from the National Treasury of South Africa, shared his experience and knowledge gained during the 18-month program. He emphasized the transformative impact on his approach to public finance, calling for graduates to become advocates for change and implementation of learned principles in their respective jurisdictions.
Conclusion: The graduation ceremony of the PFMA highlights the pressing issue of illicit financial flows in African countries and underscores the importance of effective Public Financial Management. Urama’s call for collective action emphasizes the need for African nations to address financial challenges and promote responsible governance. The PFMA stands as a key initiative to empower public officials with the skills needed to navigate the complexities of financial management.
