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Illicit Financial Flows a Drain on Development in Sub-Saharan Africa

by Spanjers ,Joseph
Published by : Global Financial Intergrity (Washington ) Physical details: 2p. Year: 2015
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As a Percent of GDP, Sub-Saharan Africa Suffers the Largest Illicit Outflows of Any Region in the World. The article presents estimates of the volumes of illicit financial outflows from the developing world from 2003 to 2012. Curbing these illicit flows is a hidden resource for development. In the case of Sub-Saharan Africa, the impact of cutting illicit outflows would be substantial. As such, GFI has proposed a Sustainable Development Goal that calls for countries to: “by 2030, reduce illicit financial flows related to trade misinvoicing by 50%.” Even just this, cutting one component of illicit financial flows (albeit the largest component) in half, would provide a significant boost to Sub-Saharan African economies. A back-of-the-envelope calculation reveals that had illicit outflows due to trade misinvoicing been at half of their actual level from 2003-2012, total illicit outflows from Sub-Saharan Africa would have averaged just 3.64% of GDP, less than the developing world average of 3.87%. It is time to start making progress towards a world where illicit financial flows are no longer a reality; the case of Sub-Saharan Africa demonstrates that this Sustainable Development Goal could be a concrete step in that direction.

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