Post-colonization Africa is estimated to have lost more than one trillion USD through illicit financial flows.
According to evidence, this figure is roughly corresponding to all of the development assistance obtained by the continent during those years. Now, the African continent is estimated to be failing close to fifty billion USD annually in illicit financial flows.
These estimates; however, maybe under the real situation since finding more accurate data of all African countries is difficult. In addition, these estimates often do not consider some forms of illicit financial flows that by its nature are secret and difficult to estimate properly. These situations may include the proceeds trafficking of drugs, bribery, and firearms transactions.
The amount lost annually by the continent through illicit financial flows is therefore most probably exceeds fifty billion USD by a considerable figure. As a result, these financial outflows are of significant concern, given insufficient growth, high degree of the poverty level, growing resource needs as well as the varying international landscape of what we call “development assistance”. While the economies in the continent, starting from the turn of this century, have been growing at an average of about five percent per year, the figure is considered hopeful although deficient.
In addition, the advantages of this progress have mostly been limited to those at the top of the income distribution then it has not been supported by an upsurge in jobs creation. Apart from the equity matters that this economic situation creates, it also means that this situation may not be maintainable due to possible social unrest. Since poverty is still a serious issue in the continent in comparative as well as absolute terms, the number of people existing on less than 1.25 USD per day is estimated to have increased from 290 million to 414 million in 1990 and 2010 respectively.
The contemporary developments situation happening internationally in fact makes the problem posed by illicit financial flows more acute. The resources that the African continent receives from other partners in the form of “development assistance” are stagnating due to attached preconditions and prerequisites of partners. Such situations shall push the African continent to look at self-fund mechanisms. This will assist its development agenda and reduce reliance on the so-called “development assistance”. Illicit financial flows are also of concern because of their impact on the system of the continent’s governance structure.
In order to effectively taking the resources out of the continent, it usually contains corrupting of high profile officials of the state and can maximize to undermining state structures, since the main doers of illicit financial flows may have the financial muscle to prevent the proper functioning of regulatory institutions. As a result, a serious continental-wide prevention mechanism should be considered.