Africa Loses $88 Billion Annually to Illicit Financial Flows – Edun Highlights Urgent Need for Fiscal Reforms
Africa loses an estimated $88 billion each year to illicit financial flows (IFFs), Finance Minister and Coordinating Minister of the Economy, Wale Edun, revealed. Speaking at the fifth session of the African Union Specialised Technical Subcommittee on Tax and IFFs, hosted alongside the Nigeria Revenue Service in Abuja, Edun emphasized that these funds, if retained, could significantly boost investment in infrastructure, healthcare, education, and other productive sectors.
Edun highlighted that Africa faces persistent challenges, including tax evasion, base erosion, limited economic diversification, and weak institutional capacity. “Addressing these challenges is not optional; it is essential,” he stressed, noting that relying solely on debt, foreign aid, or external investment is unsustainable due to their uncertainty and vulnerability to external pressures.
The minister outlined Africa’s vision for self-reliant development under Agenda 2063, aiming to finance up to 90% of the continent’s development needs through domestic resources. He called for systemic reforms to achieve this goal, including strengthening tax systems, maximizing returns from natural resources, enhancing domestic savings, and developing robust capital markets. Combating illicit financial flows and improving governance, he said, are critical levers for transformation.
The meeting brought together experts and policymakers focused on broadening Africa’s tax base, improving compliance, reducing financial leakages, and enhancing public financial management. Edun also stressed the importance of digital infrastructure, accountable institutions, regional cooperation, and active citizen engagement as essential enablers of sustainable reform.
Dr Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service, emphasized that Africa’s fiscal reforms are vital as countries face widening development financing gaps. He said governments must mobilize domestic revenue to finance infrastructure, social protection, industrialization, and climate resilience, while addressing the substantial losses caused by illicit financial flows and aggressive tax avoidance.
source: The Guardain