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Date: April 29, 2024 Mon
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Results for financial crimes (africa)
2 results foundAuthor: Kar, Dev Title: Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2009 Summary: This report analyses the volume and pattern of recorded and unrecorded capital flows to and from Africa and its various regions and country groups over the period 1980-2009. It also provides the main trends of resource transfers; it does not provide an analysis of the reasons underlying the flows. Further analysis on the dynamics of the flows will need to be based on indepth, country-specific work. For the purposes of this study, recorded “capital flows” are financial and non-financial transactions recorded in the balance of payments, whereas unrecorded capital flows primarily involve the “flight” of capital. The report assumes that unrecorded capital flows are illicit in nature and involve the transfer of money earned through corruption, kickbacks, tax evasion, criminal activities, and transactions of certain contraband goods. Likewise, legal funds earned through legal business but transferred abroad in violation of exchange control regulations also become illicit. More specifically, net recorded transfers (NRecT) are based fully on recorded balance of payments items. The narrow version of this measure, NRecT Narrow, is simply equal to the Financial Account Balance, whereas the broad measure, NRecT Broad, is equal to the Financial Account Balance plus the sum of net current and net capital transfers. Net resource transfers (NRT) are calculated by the difference between NRecT and illicit financial flows (IFF), which also have two versions, normalized (conservative) and non-normalized (robust). Hence, there are four alternate measures of NRT, corresponding to the version of recorded transfers and outflows of illicit capital. These concepts are important as they enable a comparison of NRecT against unrecorded outflows of illicit capital. Results indicate that Africa was a net creditor to the world, as measured by the net resource transfers, to the tune of up to US$1.4 trillion over the period 1980-2009, adjusted for inflation. While there were brief periods in the early 1980s and the 1990s, when Africa received small net resource transfers from the rest of the world, the continent has been a net provider of resources to the world with estimates of real NRT ranging from US$597 billion to US$1.4 trillion, depending on the definition used for the transfers (NRecT, Narrow or Broad, and IFF, normalized or non-normalized). The most optimistic estimate of NRT (or lowest negative NRT of US$597 billion) involves broadly defined recorded transfers net of conservatively estimated illicit outflows (BroadNRTNorm), while the most pessimistic scenario (negative transfers amounting to US$1.4 trillion) involves narrowly defined recorded transfers net of robust estimates of illicit outflows (NarrowNRTNon-norm). If we focus on recorded transfers, that is, not taking account of illicit outflows, we find that, according to the NRecT Narrow measure, there were net inflows to Africa over the period 1980-1999 and a sharp reversal to net outflows in the period 2000-2009. The NRecT Narrow measure shows that African countries received resources amounting to 2.3 percent of GDP in the 1980s and just under 1.0 percent of GDP in the 1990s. However, the continent became a net lender of resources to the world over the decade ending 2009. This sharp reversal from net inflows over the earlier two decades to net outflows over the last decade was mainly due to outflows associated with reserve accumulation, reflecting African countries’ desire to self-insure against financial crisis. The recorded outflows from Africa in the past decade were not evenly distributed across regions. They were largely driven by outflows from North Africa. Considering the period 2000-2009 alone, some US$30.4 billion per annum flowed out of Africa with 83 percent of such outflows originating from North Africa. Within Sub-Saharan Africa, the results from the NRecT Narrow measure were mixed. West and Central Africa experienced considerable outflows, which swamped resource transfers into other regions over the decade ending 2009. NRecT Narrow losses from the West and Central regions were mainly driven by outflows related to repayment of loans and trade credits, rather than reserve accumulation. The distribution of gains and losses of transfers among African countries was asymmetrical, resulting in a net loss of transfers from Africa. The top five countries that gained transfers (NRecT Narrow) over the period 1980-2009 are South Africa, Sudan, Tunisia, Morocco, and Cote d’Ivoire, while Algeria, Libya, Nigeria, Botswana, and Egypt lost such transfers. The volume of transfers lost from the latter five countries far outstripped those gained by the former five. The broader measure of recorded transfers (NRecT Broad) alters the long-run developments in net recorded transfers owing to the impact of current and capital transfers (which principally include remittances and debt relief). Based on the broad measure, Africa’s transfers (NRecT Broad) increased from an average inflow of about US$27 billion per annum in the 1980s and 1990s before declining to US$8.7 billion in the last decade ending 2009. The broad measure does not show that Africa swung from net debtor to net creditor to the world in the 2000s mainly due to substantial current and capital transfers such as remittances, migrant transfers, debt forgiveness and write-offs, and other non-financial transfers which provided off-setting effects. Every region of Sub-Saharan Africa received resources on a net basis throughout the three decades, based on the broad measure of transfers, with the largest gains going to the West and Central Africa region. West and Central Africa received the most resources over the 30-year period, in terms of GDP, increasing from 5.2 percent of GDP per annum in the 1980s to 5.7 percent in the 1990s, before declining to 2.3 percent in the last decade. Recorded transfers were mainly driven by remittances and debt forgiveness, rather than net foreign direct investments. Country resource endowment matters when transfers are measured on a broad basis. For instance, non-fuel exporters came out ahead of fuel-exporters in attracting net recorded transfers measured on a broad basis. Debt-relief also helped low-income countries to recapture some of the resources. Heavily Indebted Poor Countries (HIPC) experienced a modest increase in transfers over the three decades. On an average per annum inflation-adjusted basis, resource inflows to HIPC countries increased from US$14.0 billion in the 1980s to US$14.3 billion in the 1990s, before jumping to US$20.8 billion over the last decade ending 2009. North African countries dominated the top gainers over the 30-year period, based on broad categorization of net recorded transfers. Egypt, Morocco, Tunisia, Kenya, and Ghana were the top five gainers of broad-based recorded resource transfers over the 30-year period 1980-2009; Libya, Algeria, Gabon, Botswana, and Angola were the top five losers of recorded transfers. Illicit financial flows (IFFs) were the main driving force behind the net drain of resources from Africa of US$1.2 - 1.3 trillion on an inflation-adjusted basis. IFFs grew at a much faster pace over the 30-year period 1980-2009 than net recorded transfers, even accounting for the net inflows arising from the broad net recorded transfers. Illicit outflows were dominated by outflows from Sub-Saharan Africa, especially from West and Central Africa. Illicit outflows from Sub-Saharan Africa outstripped those from North Africa by over two times in nominal terms while in real terms, three African regions—West and Central Africa at US$494.0 billion (37 percent), North Africa at US$415.6 billion (31 percent), and Southern Africa at US$370.0 billion (27 percent)—account for 95 percent of total cumulative illicit outflows from Africa over the 30-year period. (See Chart 4 and Table 1). In terms of the volume of illicit financial flows, Nigeria, Egypt, and South Africa led the regional outflows. In West and Central Africa, outflows were largely driven by Nigeria, the Republic of Congo, and Cote d’Ivoire in that order of magnitude while North Africa outflows were dominated by Egypt, Algeria, and Libya respectively. Outflows from Southern Africa were mainly driven by South Africa, Mauritius, and Angola. The study concludes by offering policy recommendations with respect to (i) initiatives to restrict the absorption of illicit financial flows, (ii) policies to curtail illicit financial outflows from Africa, and (iii) policies to boost net recorded transfers by improving the business climate. To ensure greater effectiveness, it is imperative that there is policy alignment between African countries and “absorbing” countries in addressing the issue of illicit financial flows. Details: Tunis-Belvedère, Tunisia; African Development Bank: Washington, DC: Global Financial Integrity, 2013. 84p. Source: Internet Resource: Accessed June 21, 2013 at: http://www.gfintegrity.org/storage/gfip/documents/reports/AfricaNetResources/gfi_afdb_iffs_and_the_problem_of_net_resource_transfers_from_africa_1980-2009-web.pdf Year: 2013 Country: Africa URL: http://www.gfintegrity.org/storage/gfip/documents/reports/AfricaNetResources/gfi_afdb_iffs_and_the_problem_of_net_resource_transfers_from_africa_1980-2009-web.pdf Shelf Number: 129037 Keywords: Financial Crimes (Africa)Illicit Financial FlowsMoney Laundering |
Author: United Nations Economic Commission for Africa Title: Illicit Financial Flow Summary: The 4th Joint African Union Commission/United Nations Economic Commission for Africa (AUC/ECA) Conference of African Ministers of Finance, Planning and Economic Development was held in 2011. This Conference mandated ECA to establish the High Level Panel on Illicit Financial Flows from Africa. Underlying this decision was the determination to ensure Africa's accelerated and sustained development, relying as much as possible on its own resources. The decision was immediately informed by concern that many of our countries would fail to meet the Millennium Development Goals during the target period ending in 2015. There was also concern that our continent had to take all possible measures to ensure respect for the development priorities it had set itself, as reflected for instance in the New Partnership for Africa's Development. Progress on this agenda could not be guaranteed if Africa remained over-dependent on resources supplied by development partners. In the light of this analysis, it became clear that Africa was a net creditor to the rest of the world, even though, despite the inflow of official development assistance, the continent had suffered and was continuing to suffer from a crisis of insufficient resources for development. Very correctly, these considerations led to the decision to focus on the matter of illicit financial outflows from Africa, and specifically on the steps that must be taken to radically reduce these outflows to ensure that these development resources remain within the continent. The importance of this decision is emphasized by the fact that our continent is annually losing more than $50 billion through illicit financial outflows. Details: Addis Ababa, Ethiopia: The Commission, 2015. 126p. Source: Internet Resource: Accessed February 4, 2015 at: http://www.uneca.org/sites/default/files/publications/iff_main_report_english.pdf Year: 2015 Country: Africa URL: http://www.uneca.org/sites/default/files/publications/iff_main_report_english.pdf Shelf Number: 134532 Keywords: Financial Crimes (Africa)Money LaunderingTax FraudTerrorism FinancingWhite Collar Crime |