Panel Member and GFI President Raymond Baker Commends Mbeki’s Leadership and Group’s Forward Progress
WASHINGTON, DC—Former President of South Africa Thabo Mbeki and members of the United Nations Economic Commission for Africa (UNECA) High Level Panel on Illicit Financial Flows from Africa (HLP) concluded their latest visit to the United States today. Chaired by Mr. Mbeki, the group met with government representatives, civil society experts, the business community, and journalists to continue promoting the HLP’s report and urging action to curtail illicit flows in Africa.
“Illicit outflows stemming from trade misinvoicing is the most damaging economic condition in Africa today,” said GFI President Raymond Baker, a member of the High Level Panel. “This is a key point in the HLP’s report, Track It; Stop It; Get It, and an argument that GFI has been making for years in our annual estimates of illicit outflows from all developing countries.”
According to the latest research from GFI, a Washington, DC-based research and advisory organization, Africa lost an annual average of $81.7 billion—a staggering 4.9% of GDP—in illicit financial outflows from 2004-2013 (the most recent year for which data is available), damaging economies all across the continent. Trade misinvoicing, the deliberate over- and under-invoicing of trade transactions, accounted for 70.9% of all outflows from the region over the decade. In a May 2014 study funded by the Danish Ministry of Foreign Affairs, GFI found that trade misinvoicing is undermining billions of dollars of investment and domestic resource mobilization in at least some West, East, and Southern African countries.
Meetings Sought to Generate Political Will, Key to Change
The High Level Panel met with numerous experts and officials in Washington, DC and in New York February 16-19 to continue mobilizing the political will that is necessary for enacting the transparency measures the HLP has recommended to curtail the illicit outflows. The group’s time in Washington saw them meeting with the U.S. government—Department of State, National Security Council, and Treasury Department, with the World Bank and the International Monetary Fund, and with civil society experts. In New York, representatives from Sweden, Italy, Zimbabwe, Iceland, and other governments engaged with President Mbeki and the HLP at a meeting of the UN’s Economic and Social Council (ECOSOC).
“These meetings come at an important time in the global effort to take action against illicit outflows,” noted GFI Managing Director Tom Cardamone. “Last year the international community adopted the Sustainable Development Goals, of which curtailing illicit flows is a part. Governments need the tax revenue and investment streams that these flows could be providing in order to achieve the other Goals.”
Source: Global Financial Integrity