This archive report was first published on 30 June 2020.
Published on June 30, 2020, the Tax Justice Network Africa (TJNA) has sounded the alarm on increased illicit financial flows from Kenya and Africa to other countries in the wake of the Covid-19 pandemic.
According to TJNA, the scale and scope of illicit financial flows (IFFs) facilitated by unscrupulous government officials and other non-state actors could be increasing, despite the global focus on the pandemic.
“While authorities focus on the pandemic, other actors should not be distracted. For African countries to stand on their feet economically and finance their own development, they need to seal the loopholes facilitating outflow of resources, at the same time encourage creative and innovative ways to finance the development agenda,” said Alvin Mosioma, the Executive Director TJNA.
With Africa endowed with significant natural resource wealth, TJNA argues that the continent has the potential to finance its own development. However, illegal cross-border movement of money and capital threatens Kenya's and the continent's sustainable development and has been growing every year.
“It is the role of the civil society to advocate for increased transparency around public revenues and expenditures. The media should also invest in improving their skills for in-depth investigations and expose abuses for action to be taken,” Mosioma added.
Despite achieving independence over 50 years ago, the global financial and tax systems are rigged against the interest of African countries, severely affecting the sovereignty of African nations by undermining domestic revenue mobilisation in Africa.
“Trade unions should take advantage of their regional presence and explore possibilities of collaborating with non-state actors to combat IFFs in Africa,” said Mosioma.
Rachel Etter-Phoya of Tax Justice Network noted that Africa is home to the world's largest arable landmass, second-largest and longest rivers, and its second-largest tropical forest. The total value added of its fisheries and aquaculture sector alone is estimated at USD 24 billion (Sh2.4Trn).
“These flows out of the continent and associated revenue losses dwarf finance that flows inward in the form of overseas development assistance, remittances and loans,” she said.
