GFI Urges Obama, African Leaders to Prioritize Curbing Illicit Financial Flows at U.S.-Africa Summit
August 5th, 2014
August 5th, 2014
FOR IMMEDIATE RELEASE
August 4, 2014
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.”
Notes to Editors: