More than £1tn may have flowed out of Africa illegally over the last four decades, most of it to western financial institutions, according to a new report.
Even using conservative estimates, the continent lost about $1.8tn (£1.18tn) – meaning Africans living at the end of 2008 had each been deprived of an average of $989 (£649) since 1970, according to the US-based research body Global Financial Integrity (GFI).
More than £1tn may have flowed out of Africa illegally over the last four decades, most of it to western financial institutions, according to a new report.
Even using conservative estimates, the continent lost about $1.8tn (£1.18tn) – meaning Africans living at the end of 2008 had each been deprived of an average of $989 (£649) since 1970, according to the US-based research body Global Financial Integrity (GFI).
In recent years much attention has been focused on corruption – the proceeds of bribery and theft by government officials – and this only makes up about 3% of the cross-border flow of illicit money around the world. The proceeds of commercial tax evasion, mainly through trade mis-pricing, contribute 60% to 65% of the global total, while drug trafficking, racketeering and counterfeiting make up 30% to 35%. The report says Africa's percentages are likely to be roughly the same.
The scourge eats into Africa's total GDP, says the report, Illicit Financial Flows from Africa: Hidden Resource for Development. Losses rose from around 2% of GDP in 1970 to a peak of 11% in 1987, then dropped below 4% for much of the Nineties, only to increase again to 8% of GDP in 2007 and 7% in 2008.
The GFI says that existing research shows that most flows to western financial institutions, and calls on G20 members to crack down on international banks and offshore financial centres.
