The 2015 report on Illicit Financial Flows, revealed that sub-Saharan Africa lost 528.9 billion dollars through illicit outflows from 2003 to 2012.
The report also revealed that the developing world lost 6.6 trillion dollars through illicit outflows, adding that foreign direct investment increased from 2.89 billion dollars in 2009 to 3.23 billion dollars in 2003 with more than half of the total inflows going to the extractive sector.
Mr Abdallah Ali-Nakyea, a Tax Consultant, disclosed this at a presentation in Accra at a civil society Anti-Corruption dialogue on extractive sector organized by the Africa Centre for Energy Policy (ACEP).
He explained that illicit financial flows are the money’s that are illegally earned, transferred or utilised, saying such money are moved across borders from three sources; corruption, criminal activity and cross border.
He said key sources of illicit financial flows include money laundering, tax invasion as a result of weak tax administration system.
He said the oil sector corruption is high because of confidentiality and concentration of decision making and monitoring.
Mr Ali-Nakyea noted that some of the challenges in illicit financial flows are poor resource governance models and weak tax administrations coupled with multinational tax avoidance schemes.
He urged African countries to strengthen the capacity of their financial institutions as well as the need to reshape the global financial architecture as mechanism in addressing illicit financial flows.
Dr Mohammed Amin Adam, Executive Director of ACEP, said the extractive industry provides enormous opportunity for addressing development challenges in many resource-rich countries.
Dr Adam said failure of many states to transform their natural resources to development benefits for their people has been attributed to poor governance.
He called on government to commit to the implementation of an open and competitive process for awarding oil, gas and mining concessions and a mandatory requirement for the disclosure of oil, gas and mining contracts.
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