August 4, 2014
Clark Gascoigne, +1 202 293 0740 ext. 222
Illicit Financial Flows Draining US$55.6bn Annually from Continent
U.S. Must Address Its Role as a Major Facilitator of Such Outflows
WASHINGTON, DC – As African leaders descend on Washington this week for the historic U.S.-Africa Leaders Summit, Global Financial Integrity (GFI) called on the Obama Administration and Heads of State from across the continent to prioritize efforts to curtail illicit financial flows from Africa, which GFI estimates cost the continent roughly US$55.6 billion per year over the past decade.
“Illicit financial outflows are by far the most damaging economic problem facing Africa,” said GFI President Raymond Baker, who sits on the UN High Level Panel on Illicit Financial Flows from Africa. “In 2011 alone, US$76.9 billion flowed illegally out of Africa. That’s nearly US$77 billion that could have been invested in local businesses, in healthcare, in education, or in infrastructure. It’s money that could have been used to help pull people out of poverty and save lives. This Summit provides an historic opportunity for the United States and for leaders across Africa to focus their efforts on curtailing this hemorrhage of illicit capital.”
GFI research finds that US$555.8 billion flowed illicitly out of Africa between 2002 and 2011, fueling crime, corruption, and tax evasion, while simultaneously draining hundreds of billions of dollars from African economies. The problem is so severe that a May 2013 joint report from GFI and the African Development Bank found that, after adjusting all recorded flows of money to and from the continent (e.g. debt, investment, exports, imports, foreign aid, remittances, etc.) for illicit financial outflows, between 1980 and 2009, Africa was a net creditor to the rest of the world on the order of US$597 billion and US$1.4 trillion.
“The traditional thinking has always been that the West is pouring money into Africa through foreign aid and other private sector flows, without receiving much in return. Our research has turned that logic upside down – Africa has been a net creditor to the rest of the world for decades,” added Mr. Baker, a longtime authority on financial crime. “The implication of this finding is broad and profound: More money flows out of Africa than flows in. Without concrete action, the drain on the continent is only going to grow larger.”
U.S. A Major Facilitator of Illicit Money
GFI, the Washington-based the research and advocacy organization, highlighted the role of the United States as a major facilitator of such outflows.
“For every country losing money illicitly, there is another country absorbing it. Illicit financial outflows are facilitated by financial opacity in tax havens and in Western economies like the United States,” noted Heather Lowe, GFI’s legal counsel and director of government affairs. “Indeed, the United States is the second easiest country in the world—after Kenya—for a criminal, kleptocrat, or terrorist to incorporate an anonymous company to launder their ill-gotten-gains with impunity. It’s high time that the U.S. Government come to terms with this reality and lay out specific policies, which it intends to implement to curb its status as a dirty money haven.”
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Notes to Editors:
- GFI spokespersons are available to comment the U.S.-Africa Summit. To schedule an interview with Mr. Baker, Ms. Lowe or other GFI spokespersons, contact Clark Gascoigne at +1 202 293 0740 ext. 222 (office) / +1 202 815 4029 (mobile) / cgascoigne@gfintegrity.org.
- Click here to read an HTML version of this press release on our website.
- Click here for more information from the White House on the U.S.-Africa Summit.
- GFI is co-sponsoring a side-event to the Summit on Monday, August 4th from 12:30pm to 3:00pm EDT, titled “Resources for the Future: Partnering with Civil Society for Transparency and Accountability in Africa,” which will discuss natural resource governance and illicit financial flows. Click here to watch a live-stream of the event.
- Click here to read more on GFI’s May 2013 joint report with the AfDB, “Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2009.”
- Click here to download an Excel spreadsheet with GFI’s latest estimates on illicit financial outflows from each African country.
Journalist Contacts:
Clark Gascoigne
cgascoigne@gfintegrity.org
+1 202 293 0740, ext. 222 (Office)
+1 202 815 4029 (Mobile)
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Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization, which promotes transparency in the international financial system as a means to global development.
For additional information please visit www.gfintegrity.org.