The Economic Community of West African States (ECOWAS) loses some $268 billion to illicit financial flows (IFFs) within a 10 year period from 2004 to 2014, computation of figures published by the Global Financial Integrity (GFI) shows.
The region with a population of about 335 million people, which is about one-third of the population of sub-Saharan Africa, has an estimated GDP of around $345 billion. The loss is therefore, approximately a colossal 78 per cent.
Nigeria suffers the biggest hit, with a loss of over $178 billion within that period.
The menace of illicit financial flows from Africa in general is a major source of leakage of much needed funds for development. With the continent losing an estimated $50 to $60 billion a year, the need to initiate a more purposeful effort at curbing the flows is more urgent than ever – more importantly, as the countries in the region are aiming at meeting the Sustainable Development Goals, while grappling with growing debts.
While many African countries are party to several sub-regional, continental and global conventions, the region has the highest illicit financial outflows to GDP ratio, with transactions by multinational companies believed to account for 60 per cent, criminal activities 35 per cent, and corruption, five per cent.
The High Level Panel on Illicit Financial Flows from Africa of the Economic Commission for Africa (ECA) and the African Union (AU) chaired by former South African President, Thabo Mbeki is already at work galvanizing interest and proposing strategies and actions to stop the bleeding.
ECOWAS as a very important region can piggyback on the Panel’s work and figure out specific strategies to deal with the peculiar circumstances within the region that leads to the losses, chief among the industries with high losses to IFFs is the petroleum industry. Politicians are said to be involved in the complicated web of the dealings that lead to the losses as confirmed by the Panama Papers.
The Financial Action Task Force (FATF) styled unit of ECOWAS, the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) should be strengthen and empowered to do its work without fear or favour, as its effectiveness can to a large extent reduce the flow of illicit finance from the region.