This document discusses issues related to illicit financial flows from Africa. It defines illicit financial flows as unrecorded capital flows from criminal activities like corruption, drug trading, and tax evasion. It estimates that Africa has lost between $854 billion to $1.8 trillion to illicit financial flows since 1970. These outflows undermine development by reducing tax revenue and domestic resource mobilization. They also perpetuate external debt and aid dependence. The document examines how illicit flows relate to natural resources, governance, private sector activities, and conflicts. It argues that curbing these outflows could generate domestic resources to finance development and climate change adaptation.
Corruption, illicit financials flows and governance ethicsCosty Costantinos
This document provides an overview of a seminar on corruption, illicit financial flows, and governance ethics in Africa. It discusses definitions of corruption, its causes such as political, legal, bureaucratic, economic, and transnational factors. The consequences of corruption are outlined as political, economic, and social. While corruption is generally seen as harmful, some argue it can have short-term benefits by substituting for weak rule of law and inefficient bureaucracy. The document also examines illicit financial flows from Africa, including their origins, means such as trade mispricing and cash smuggling, channels, and methods for estimating flows.
Taxation for Domestic Resource Mobilization (DRM in KenyaSally A.
Kenya is heavily dependent on donor aid. As a middle income country there is concern of decrease in foreign aid and thus need for Domestic Resource Mobilization (DRM). My target audience are the citizens of Kenya as well policy makers and the donor community.
DRM is a reliable and sustainable source of development finance. Raising more revenue from internal sources helps countries devote needed resources to reduce poverty and hunger, bridge infrastructure gaps and provide public services. DRM fosters the social contract between people and government, facilitates a virtuous cycle of transparency, accountability, efficiency and strengthens democratic engagement and institutions.
Taxation for Domestic Resource Mobilization (DRM) in KenyaSally A.
Kenya is heavily dependent on donor aid. As a middle income country there is concern of decrease in foreign aid and thus need for Domestic Resource Mobilization (DRM). My target audience are the citizens of Kenya as well policy makers and the donor community.
DRM is a reliable and sustainable source of development finance. Raising more revenue from internal sources helps countries devote needed resources to reduce poverty and hunger, bridge infrastructure gaps and provide public services. DRM fosters the social contract between people and government, facilitates a virtuous cycle of transparency, accountability, efficiency and strengthens democratic engagement and institutions.
Illicit financial flows why africa needs to track it! stop it! get it! Dr Lendy Spires
This document discusses illicit financial flows from Africa. It defines illicit financial flows as money that is illegally earned, transferred or utilized. Estimates show that from 1970 to 2008, Africa lost between $854 billion and $1.8 trillion in illicit financial flows, draining the continent of important resources. Commercial illicit financial flows, such as tax evasion and trade mispricing, account for the largest proportion, followed by proceeds from criminal activities and corruption. Illicit financial flows have considerable negative impacts on Africa's development by reducing government revenues, deepening corruption, increasing debt burdens, and impeding growth. The document examines illicit financial flows in various sectors like natural resources and their impacts on governance, revenue collection,
Walk the talk on illicit financial flows the g20's responsibility in combatin...Dr Lendy Spires
1) Illicit financial flows, including tax evasion and avoidance, have cost African countries over $854 billion between 1970-2008, more than the continent's external debt. Multinational corporations use sophisticated transfer pricing and tax havens to avoid paying taxes.
2) South Africa loses over $1.4 billion annually due to trade mispricing with the EU and US. Companies like Mopani Copper Mines and SABMiller use mechanisms like transfer pricing and payments to subsidiaries in tax havens to reduce their tax bills in Africa.
3) The 2011 G20 summit in France is a key opportunity for countries to address these issues through measures like automatic tax information exchange and country-by-country financial
Investors, both local and international, prefer to invest in productive economies where they ultimately would have good returns for their money. A productive economy (competitive, if you like) which guarantees safe investments and promises good returns has some basic requirements that are inherent in the system of operation in those countries. Most times, the people have a say in who and how they are governed (Democracy).
Our next two papers consider two aspects of public sector audit. The first by Hussein Mohamed El-Nafabi considers the issue of corruption in Sudan and the important role of the Auditor General in the fight against it. The objective of this study is to address the perverse incentives for financial corruption and try to provide practical solutions. It is recognised that, as in many countries, financial corruption is deeply rooted and institutionalized and the fight against it is likely to be long and difficult. However, the paper ends with a series of recommendations to assist with this struggle.
Corruption, illicit financials flows and governance ethicsCosty Costantinos
This document provides an overview of a seminar on corruption, illicit financial flows, and governance ethics in Africa. It discusses definitions of corruption, its causes such as political, legal, bureaucratic, economic, and transnational factors. The consequences of corruption are outlined as political, economic, and social. While corruption is generally seen as harmful, some argue it can have short-term benefits by substituting for weak rule of law and inefficient bureaucracy. The document also examines illicit financial flows from Africa, including their origins, means such as trade mispricing and cash smuggling, channels, and methods for estimating flows.
Taxation for Domestic Resource Mobilization (DRM in KenyaSally A.
Kenya is heavily dependent on donor aid. As a middle income country there is concern of decrease in foreign aid and thus need for Domestic Resource Mobilization (DRM). My target audience are the citizens of Kenya as well policy makers and the donor community.
DRM is a reliable and sustainable source of development finance. Raising more revenue from internal sources helps countries devote needed resources to reduce poverty and hunger, bridge infrastructure gaps and provide public services. DRM fosters the social contract between people and government, facilitates a virtuous cycle of transparency, accountability, efficiency and strengthens democratic engagement and institutions.
Taxation for Domestic Resource Mobilization (DRM) in KenyaSally A.
Kenya is heavily dependent on donor aid. As a middle income country there is concern of decrease in foreign aid and thus need for Domestic Resource Mobilization (DRM). My target audience are the citizens of Kenya as well policy makers and the donor community.
DRM is a reliable and sustainable source of development finance. Raising more revenue from internal sources helps countries devote needed resources to reduce poverty and hunger, bridge infrastructure gaps and provide public services. DRM fosters the social contract between people and government, facilitates a virtuous cycle of transparency, accountability, efficiency and strengthens democratic engagement and institutions.
Illicit financial flows why africa needs to track it! stop it! get it! Dr Lendy Spires
This document discusses illicit financial flows from Africa. It defines illicit financial flows as money that is illegally earned, transferred or utilized. Estimates show that from 1970 to 2008, Africa lost between $854 billion and $1.8 trillion in illicit financial flows, draining the continent of important resources. Commercial illicit financial flows, such as tax evasion and trade mispricing, account for the largest proportion, followed by proceeds from criminal activities and corruption. Illicit financial flows have considerable negative impacts on Africa's development by reducing government revenues, deepening corruption, increasing debt burdens, and impeding growth. The document examines illicit financial flows in various sectors like natural resources and their impacts on governance, revenue collection,
Walk the talk on illicit financial flows the g20's responsibility in combatin...Dr Lendy Spires
1) Illicit financial flows, including tax evasion and avoidance, have cost African countries over $854 billion between 1970-2008, more than the continent's external debt. Multinational corporations use sophisticated transfer pricing and tax havens to avoid paying taxes.
2) South Africa loses over $1.4 billion annually due to trade mispricing with the EU and US. Companies like Mopani Copper Mines and SABMiller use mechanisms like transfer pricing and payments to subsidiaries in tax havens to reduce their tax bills in Africa.
3) The 2011 G20 summit in France is a key opportunity for countries to address these issues through measures like automatic tax information exchange and country-by-country financial
Investors, both local and international, prefer to invest in productive economies where they ultimately would have good returns for their money. A productive economy (competitive, if you like) which guarantees safe investments and promises good returns has some basic requirements that are inherent in the system of operation in those countries. Most times, the people have a say in who and how they are governed (Democracy).
Our next two papers consider two aspects of public sector audit. The first by Hussein Mohamed El-Nafabi considers the issue of corruption in Sudan and the important role of the Auditor General in the fight against it. The objective of this study is to address the perverse incentives for financial corruption and try to provide practical solutions. It is recognised that, as in many countries, financial corruption is deeply rooted and institutionalized and the fight against it is likely to be long and difficult. However, the paper ends with a series of recommendations to assist with this struggle.
Important issues in public finance and revenue mobilizationZainab Khurshied
The document discusses several important issues in public finance and revenue mobilization in Pakistan. It outlines key topics like finance, public finance, government revenue sources, expenditures, and challenges around revenue mobilization. Some key issues discussed include corruption, nepotism, lack of accountability, currency devaluation, educational issues, rising government debt, and deficits in Pakistan's balance of payments. Suggestions are provided around strengthening anti-corruption efforts, increasing education spending, boosting local production to reduce imports, and ensuring an independent judiciary.
The effeect of illicit financial flows on time to reach the fouth mdg in sub ...Dr Lendy Spires
1. The document analyzes how illicit financial flows (IFF) impact the ability of countries in Sub-Saharan Africa to achieve the fourth Millennium Development Goal of reducing child mortality.
2. It estimates that curbing IFF could reduce the time needed for 16 countries in Sub-Saharan Africa to reach their MDG4 targets of reducing child mortality, with 6 countries achieving the target by 2015 with IFF reductions.
3. IFF drain capital from countries in Sub-Saharan Africa through practices like tax evasion and avoidance. This reduces funds available for public spending on healthcare, education and other services that influence child mortality rates.
This document discusses issues around domestic resource mobilization in Africa. It notes that while Africa has experienced strong economic growth, mobilizing domestic resources is important for sustainability and reducing volatility. Key challenges to domestic resource mobilization include low tax collection rates, an informal sector that is difficult to tax, and illicit financial flows estimated to cost Africa $854 billion between 1970-2008. The document examines specific issues around domestic savings, financial markets, taxation, and governance and planning challenges that have hindered fully exploiting domestic resources for development.
This document discusses the relationship between bad governance, corruption, and leadership failures in African countries. It provides empirical evidence that leadership changes are either frequent or infrequent, allowing leaders to govern without accountability for corrupt behavior. Weak institutions have been unable to control corruption, and many African countries have become highly corrupt. The document examines the historical leadership and corruption levels in 53 African countries since independence to argue that corruption stems from weak governance, undemocratic leaders, and institutional failures after countries gained independence.
Illicit financial flows and their impact in developing nationsDr Lendy Spires
Developing countries lost nearly $5.9 trillion over the past decade to illicit financial flows, draining funds for development. Illicit flows include illegally earned money being hidden or transferred abroad, as well as legally earned money being moved through aggressive tax avoidance schemes. Common tactics include mispricing assets in international trade to shift profits to tax havens, round-tripping investments to exploit tax breaks, and hiding ownership through shell companies. These illicit flows significantly reduce developing countries' tax revenues and foreign investment, inhibiting growth, infrastructure investment, and provision of public services. International organizations are working to curb illicit flows through automatic exchange of tax information, public disclosure of beneficial ownership, country-by-country reporting, and enforcing arms
Corporate Capital of Domestic and Foreign Firms in Africa – An Empirical ReviewIOSRJBM
The study evaluated the existence and nature of systematic competition for corporate capital between local and foreign firms operating in major African economies. The study is motivated by the debate that foreign firms have easier access to corporate capital than domestic firms, and that the problem in the global financial market might push foreign firms to rely more on domestic financial markets for funds. To achieve the goal of this study, both microeconomic and macroeconomic data were sourced from diverse sources – including the World Bank's Global Development Indicators' database and the individual annual financial reports of firms. The data generated a total of 351 firms based in 11 African countries over a period 2009 to 2014. The results show that the average ratio of total liabilities to total assets is slightly higher among the listed foreign firms (at 48.8 percent) than among the listed domestic firms (47.9 percent), although the differences does not appear significant at conventional levels (t-statistic = 0.601; prob.>t = 0.548). For the whole sample also, it is shown that foreign firms have higher long-term liabilities to total asset ratio than domestic firms, and that the difference is significant at 10 percent level. Whereas the average long-term debt ratio among foreign firms stands at 12.1 percent, for domestic firms, the level is 10.7 percent (t-statistic = 1.751; prob.>t = 0.080). In none of the four sub regions, though, does the difference in the long-term debts ratio significantly differ between domestic and foreign firms. Consistent with the statistical evidence, the descriptive results seem to suggest that the survey evidence reported by the World Bank that in Africa, foreign firms are more profitable, larger, more valued in terms of investments in fixed assets, and older than domestic firms is not true. However, as shown in this report, such differences, with the exception of asset tangibility and age, are not very significant at conventional levels. This suggests that the major source of competition for corporate finance in Africa may be on the extent of collateral value and the reputation that arises from firm age
Analysis of the effects of capital flight on economic growth evidence from ni...Alexander Decker
This document analyzes the effects of capital flight on economic growth in Nigeria from 1980 to 2011. It finds that large capital outflows from Nigeria are due to political instability, high fiscal deficits, high interest rates, and high external debt servicing costs. It recommends policies to alleviate capital flight such as good governance, fiscal discipline, and enacting laws to encourage repatriation of illegally moved funds for investment in Nigeria's real economy.
Proceeds of Crime and the Havoc it is Causing to Legitimate Business in Cameroonijtsrd
The business arena in Cameroon is facing a lot of challenges. Amongst them is the influx of illicit money. The attendant consequence, being a high probability of chasing out legitimate businesses and their proprietors from the Cameroonian market. This problem is made worst by the fact that those involved are politically exposed persons whom because of the corrupt nature of the country and a highly centralised government wield a lot of power thus weakening the existing legal framework put in place to check embezzlement and money laundering.This paper is meant to create awareness on the damaging effects of these illegal practices on our economy. This will enable law makers to design a legal framework with measures capable of preventing the flow of such illegitimate funds into the country's economy. Only such a move can create a conducive and healthy arena for doing business in Cameroon. One where there can be positive competition that can boost growth in an economy. Businesses run for the purpose of laundering money are unstable and do not help the economy in any way. Akuhfa Harriette | Prof. Galega Samgena D "Proceeds of Crime and the Havoc it is Causing to Legitimate Business in Cameroon" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29758.pdf Paper URL: https://www.ijtsrd.com/other-scientific-research-area/other/29758/proceeds-of-crime-and-the-havoc-it-is-causing-to-legitimate-business-in-cameroon/akuhfa-harriette
This document discusses corruption and its negative impacts. It argues that corruption is stealing and impoverishes people, as leaders in Africa steal over $148 billion annually from their people. It advocates for biblical principles of honesty, integrity, and justice to combat corruption, including electing godly leaders, swift punishment of wrongdoers, and full restitution for victims of crimes. Corruption increases when criminals are not punished quickly, so governments must serve as agents of wrath against evil.
This document discusses the relationship between corruption and development in less developed countries. It argues that widespread corruption prevents public funds from being used effectively for development goals. Countries that have successfully curtailed corruption through the rule of law have seen more rapid economic progress. While all countries face some level of corruption, developed nations have minimized it more successfully. The document analyzes corruption and competitiveness indices for various countries and finds that those with high corruption tend to be less developed. It concludes corruption must be addressed for goals like the SDGs to be achieved in the developing world.
Emerging Market Study – Top 3 for business in South America. This presentation gives a brief information about the top 3 emerging markets in South America.
The survey aimed to evaluate stakeholder satisfaction with the Youth Employment Network's (YEN) services and identify areas for improvement. 55% of survey recipients responded. Respondents were generally positive, though suggested improving definitions of services, support for lead countries, and youth participation. Highest response rates came from NGOs in Sub-Saharan Africa involved with YEN's Youth-to-Youth Fund, indicating this is an important stakeholder group that relies on YEN's financial and technical support. The survey results will help YEN enhance effectiveness and better serve stakeholders.
This editorial summarizes the key points from the World of Work Report 2009. It discusses that while the global economy is showing signs of recovery, the global jobs crisis is far from over and could worsen without adequate action. It estimates that at least 20 million jobs have been lost and about 5 million more workers are at risk of job losses. Nearly 43 million workers are also at risk of long-term labor market exclusion. Premature withdrawal of stimulus measures could prolong the crisis and undermine recovery. Continued job-centered stimulus in line with the Global Jobs Pact, along with financial sector reforms, are needed to address the crisis and make recovery sustainable.
This document is a report by the United Nations Environment Programme (UNEP) about reducing nitrous oxide (N2O) emissions to protect the climate and ozone layer. It acknowledges that N2O concentrations in the atmosphere are rising and that N2O is a powerful greenhouse gas and depletes stratospheric ozone. The report was produced by an international group of scientists and experts and provides a synthesis of the challenges posed by N2O emissions and potential solutions to reduce those emissions from key sources such as agriculture, industry and transport.
This document provides guidance on conducting a Country-Level Savings Assessment (CLSA) to evaluate opportunities for improving poor people's access to deposit services. It outlines a methodology involving analysis at four levels: clients, micro-institutions, the financial sector meso-level (infrastructure and support services), and the macro-level policy environment. At each level, key questions are identified to assess demand for savings services among poor clients and the ability of the financial sector supply to meet that demand. The goal is to understand constraints and formulate recommendations to strengthen supply. The document also provides examples of indicators to collect and potential data sources.
G20: WRONG INTERNATIONAL FORUM FOR DEVELOPMENTDr Lendy Spires
On September 18-19, 2011, the “Development Working Group” of the Group of 20 met in Paris and sought to finalize its proposals for policies that the leaders of the 20 would likely adopt at their summit meeting on November 3-4 in France. It is “small beer.”Had the countries in the Group forged development-oriented compromises to end the stalemates in the main global trade, financial and environmental forums, they might have made a more convincing case for appointing themselves the leaders of global economic policy making.
They have not, but have nevertheless begun directing the international institutions to follow the G20’s own development agenda. This note is offered to help understand the actions the Group is taking, which are quite detailed, but little discussed publicly. The Group of 20 (G20), originally an intergovernmental but technical financial forum at ministerial level, was transformed into a summit of G20 leaders in November 2008, as the global financial crisis spread fear in usually confident quarters while the world plunged into economic recession.
The primary objective of the upgraded forum was to agree and act upon a coordinated economic rescue strategy. The leaders also agreed to work together to revise the international consensus on regulation of finance, whose laxness had been a prime cause of one of the worst financial crises in western history.
While the issues of macroeconomic coordination and financial regulatory reform remain at the heart of its agenda, the G20 decided in 2010 to add promotion of development of developing countries to its agenda. Its Toronto Summit of June 26-27 thus created a Development Working Group (DWG), which it asked to draft a development agenda and multi-year action plan.
This document is the final report of the African Commission's Working Group on Indigenous Populations in Africa. It summarizes the Working Group's mandate to examine the concept of indigenous peoples in Africa, study implications of the African Charter, and make recommendations to protect indigenous communities' rights. The report finds that indigenous peoples face significant human rights issues regarding lands, discrimination, justice, culture, political participation, and access to services. It analyzes how the African Charter and the Commission's jurisprudence can be interpreted to better protect collective rights and the concept of 'peoples'. The report concludes by recommending the Commission adopt the report and maintain the Working Group's mandate.
Emergent global patterns_of_ecosystem_structure_and_function_form_a_mechanist...Dr Lendy Spires
This document summarizes a new mechanistic general ecosystem model (GEM) called the Madingley Model. The model simulates ecological processes like primary production, eating, growth, reproduction and dispersal for individual organisms ranging in size from 10 mg to 150,000 kg across terrestrial and marine environments globally. Emergent properties observed at individual, community, ecosystem and global scales, such as trophic structure and body size distributions, generally agree with empirical data without direct constraints. The model provides novel predictions about relationships between net primary productivity, trophic chain length and herbivore pressure. It indicates ecologists now have sufficient information to build realistic global models of ecosystem structure and function to predict impacts of human pressures.
This document provides an overview of indigenous peoples in Africa from the perspective of the African Commission on Human and Peoples' Rights (ACHPR). It discusses the characteristics of indigenous peoples in Africa, examples of indigenous groups, and the human rights issues they face, such as discrimination, lack of land rights, and poor access to representation, health and education. It also describes the ACHPR's Working Group on Indigenous Populations/Communities, which was established to address these issues and draft a report on protecting indigenous peoples' rights.
This document is a report on transitioning from the informal to the formal economy prepared by the International Labour Office for the 103rd International Labour Conference in 2014. It provides an overview of the informal economy and issues related to facilitating transitions to formality. The report notes that work in the informal economy is characterized by decent work deficits and vulnerability. While policies need to account for the diversity of informal work, inclusive development requires extending rights and opportunities to informal workers. The report examines trends in informal employment globally and regionally and the ILO's approach to supporting transitions to formality through integrated policy frameworks.
Important issues in public finance and revenue mobilizationZainab Khurshied
The document discusses several important issues in public finance and revenue mobilization in Pakistan. It outlines key topics like finance, public finance, government revenue sources, expenditures, and challenges around revenue mobilization. Some key issues discussed include corruption, nepotism, lack of accountability, currency devaluation, educational issues, rising government debt, and deficits in Pakistan's balance of payments. Suggestions are provided around strengthening anti-corruption efforts, increasing education spending, boosting local production to reduce imports, and ensuring an independent judiciary.
The effeect of illicit financial flows on time to reach the fouth mdg in sub ...Dr Lendy Spires
1. The document analyzes how illicit financial flows (IFF) impact the ability of countries in Sub-Saharan Africa to achieve the fourth Millennium Development Goal of reducing child mortality.
2. It estimates that curbing IFF could reduce the time needed for 16 countries in Sub-Saharan Africa to reach their MDG4 targets of reducing child mortality, with 6 countries achieving the target by 2015 with IFF reductions.
3. IFF drain capital from countries in Sub-Saharan Africa through practices like tax evasion and avoidance. This reduces funds available for public spending on healthcare, education and other services that influence child mortality rates.
This document discusses issues around domestic resource mobilization in Africa. It notes that while Africa has experienced strong economic growth, mobilizing domestic resources is important for sustainability and reducing volatility. Key challenges to domestic resource mobilization include low tax collection rates, an informal sector that is difficult to tax, and illicit financial flows estimated to cost Africa $854 billion between 1970-2008. The document examines specific issues around domestic savings, financial markets, taxation, and governance and planning challenges that have hindered fully exploiting domestic resources for development.
This document discusses the relationship between bad governance, corruption, and leadership failures in African countries. It provides empirical evidence that leadership changes are either frequent or infrequent, allowing leaders to govern without accountability for corrupt behavior. Weak institutions have been unable to control corruption, and many African countries have become highly corrupt. The document examines the historical leadership and corruption levels in 53 African countries since independence to argue that corruption stems from weak governance, undemocratic leaders, and institutional failures after countries gained independence.
Illicit financial flows and their impact in developing nationsDr Lendy Spires
Developing countries lost nearly $5.9 trillion over the past decade to illicit financial flows, draining funds for development. Illicit flows include illegally earned money being hidden or transferred abroad, as well as legally earned money being moved through aggressive tax avoidance schemes. Common tactics include mispricing assets in international trade to shift profits to tax havens, round-tripping investments to exploit tax breaks, and hiding ownership through shell companies. These illicit flows significantly reduce developing countries' tax revenues and foreign investment, inhibiting growth, infrastructure investment, and provision of public services. International organizations are working to curb illicit flows through automatic exchange of tax information, public disclosure of beneficial ownership, country-by-country reporting, and enforcing arms
Corporate Capital of Domestic and Foreign Firms in Africa – An Empirical ReviewIOSRJBM
The study evaluated the existence and nature of systematic competition for corporate capital between local and foreign firms operating in major African economies. The study is motivated by the debate that foreign firms have easier access to corporate capital than domestic firms, and that the problem in the global financial market might push foreign firms to rely more on domestic financial markets for funds. To achieve the goal of this study, both microeconomic and macroeconomic data were sourced from diverse sources – including the World Bank's Global Development Indicators' database and the individual annual financial reports of firms. The data generated a total of 351 firms based in 11 African countries over a period 2009 to 2014. The results show that the average ratio of total liabilities to total assets is slightly higher among the listed foreign firms (at 48.8 percent) than among the listed domestic firms (47.9 percent), although the differences does not appear significant at conventional levels (t-statistic = 0.601; prob.>t = 0.548). For the whole sample also, it is shown that foreign firms have higher long-term liabilities to total asset ratio than domestic firms, and that the difference is significant at 10 percent level. Whereas the average long-term debt ratio among foreign firms stands at 12.1 percent, for domestic firms, the level is 10.7 percent (t-statistic = 1.751; prob.>t = 0.080). In none of the four sub regions, though, does the difference in the long-term debts ratio significantly differ between domestic and foreign firms. Consistent with the statistical evidence, the descriptive results seem to suggest that the survey evidence reported by the World Bank that in Africa, foreign firms are more profitable, larger, more valued in terms of investments in fixed assets, and older than domestic firms is not true. However, as shown in this report, such differences, with the exception of asset tangibility and age, are not very significant at conventional levels. This suggests that the major source of competition for corporate finance in Africa may be on the extent of collateral value and the reputation that arises from firm age
Analysis of the effects of capital flight on economic growth evidence from ni...Alexander Decker
This document analyzes the effects of capital flight on economic growth in Nigeria from 1980 to 2011. It finds that large capital outflows from Nigeria are due to political instability, high fiscal deficits, high interest rates, and high external debt servicing costs. It recommends policies to alleviate capital flight such as good governance, fiscal discipline, and enacting laws to encourage repatriation of illegally moved funds for investment in Nigeria's real economy.
Proceeds of Crime and the Havoc it is Causing to Legitimate Business in Cameroonijtsrd
The business arena in Cameroon is facing a lot of challenges. Amongst them is the influx of illicit money. The attendant consequence, being a high probability of chasing out legitimate businesses and their proprietors from the Cameroonian market. This problem is made worst by the fact that those involved are politically exposed persons whom because of the corrupt nature of the country and a highly centralised government wield a lot of power thus weakening the existing legal framework put in place to check embezzlement and money laundering.This paper is meant to create awareness on the damaging effects of these illegal practices on our economy. This will enable law makers to design a legal framework with measures capable of preventing the flow of such illegitimate funds into the country's economy. Only such a move can create a conducive and healthy arena for doing business in Cameroon. One where there can be positive competition that can boost growth in an economy. Businesses run for the purpose of laundering money are unstable and do not help the economy in any way. Akuhfa Harriette | Prof. Galega Samgena D "Proceeds of Crime and the Havoc it is Causing to Legitimate Business in Cameroon" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29758.pdf Paper URL: https://www.ijtsrd.com/other-scientific-research-area/other/29758/proceeds-of-crime-and-the-havoc-it-is-causing-to-legitimate-business-in-cameroon/akuhfa-harriette
This document discusses corruption and its negative impacts. It argues that corruption is stealing and impoverishes people, as leaders in Africa steal over $148 billion annually from their people. It advocates for biblical principles of honesty, integrity, and justice to combat corruption, including electing godly leaders, swift punishment of wrongdoers, and full restitution for victims of crimes. Corruption increases when criminals are not punished quickly, so governments must serve as agents of wrath against evil.
This document discusses the relationship between corruption and development in less developed countries. It argues that widespread corruption prevents public funds from being used effectively for development goals. Countries that have successfully curtailed corruption through the rule of law have seen more rapid economic progress. While all countries face some level of corruption, developed nations have minimized it more successfully. The document analyzes corruption and competitiveness indices for various countries and finds that those with high corruption tend to be less developed. It concludes corruption must be addressed for goals like the SDGs to be achieved in the developing world.
Emerging Market Study – Top 3 for business in South America. This presentation gives a brief information about the top 3 emerging markets in South America.
The survey aimed to evaluate stakeholder satisfaction with the Youth Employment Network's (YEN) services and identify areas for improvement. 55% of survey recipients responded. Respondents were generally positive, though suggested improving definitions of services, support for lead countries, and youth participation. Highest response rates came from NGOs in Sub-Saharan Africa involved with YEN's Youth-to-Youth Fund, indicating this is an important stakeholder group that relies on YEN's financial and technical support. The survey results will help YEN enhance effectiveness and better serve stakeholders.
This editorial summarizes the key points from the World of Work Report 2009. It discusses that while the global economy is showing signs of recovery, the global jobs crisis is far from over and could worsen without adequate action. It estimates that at least 20 million jobs have been lost and about 5 million more workers are at risk of job losses. Nearly 43 million workers are also at risk of long-term labor market exclusion. Premature withdrawal of stimulus measures could prolong the crisis and undermine recovery. Continued job-centered stimulus in line with the Global Jobs Pact, along with financial sector reforms, are needed to address the crisis and make recovery sustainable.
This document is a report by the United Nations Environment Programme (UNEP) about reducing nitrous oxide (N2O) emissions to protect the climate and ozone layer. It acknowledges that N2O concentrations in the atmosphere are rising and that N2O is a powerful greenhouse gas and depletes stratospheric ozone. The report was produced by an international group of scientists and experts and provides a synthesis of the challenges posed by N2O emissions and potential solutions to reduce those emissions from key sources such as agriculture, industry and transport.
This document provides guidance on conducting a Country-Level Savings Assessment (CLSA) to evaluate opportunities for improving poor people's access to deposit services. It outlines a methodology involving analysis at four levels: clients, micro-institutions, the financial sector meso-level (infrastructure and support services), and the macro-level policy environment. At each level, key questions are identified to assess demand for savings services among poor clients and the ability of the financial sector supply to meet that demand. The goal is to understand constraints and formulate recommendations to strengthen supply. The document also provides examples of indicators to collect and potential data sources.
G20: WRONG INTERNATIONAL FORUM FOR DEVELOPMENTDr Lendy Spires
On September 18-19, 2011, the “Development Working Group” of the Group of 20 met in Paris and sought to finalize its proposals for policies that the leaders of the 20 would likely adopt at their summit meeting on November 3-4 in France. It is “small beer.”Had the countries in the Group forged development-oriented compromises to end the stalemates in the main global trade, financial and environmental forums, they might have made a more convincing case for appointing themselves the leaders of global economic policy making.
They have not, but have nevertheless begun directing the international institutions to follow the G20’s own development agenda. This note is offered to help understand the actions the Group is taking, which are quite detailed, but little discussed publicly. The Group of 20 (G20), originally an intergovernmental but technical financial forum at ministerial level, was transformed into a summit of G20 leaders in November 2008, as the global financial crisis spread fear in usually confident quarters while the world plunged into economic recession.
The primary objective of the upgraded forum was to agree and act upon a coordinated economic rescue strategy. The leaders also agreed to work together to revise the international consensus on regulation of finance, whose laxness had been a prime cause of one of the worst financial crises in western history.
While the issues of macroeconomic coordination and financial regulatory reform remain at the heart of its agenda, the G20 decided in 2010 to add promotion of development of developing countries to its agenda. Its Toronto Summit of June 26-27 thus created a Development Working Group (DWG), which it asked to draft a development agenda and multi-year action plan.
This document is the final report of the African Commission's Working Group on Indigenous Populations in Africa. It summarizes the Working Group's mandate to examine the concept of indigenous peoples in Africa, study implications of the African Charter, and make recommendations to protect indigenous communities' rights. The report finds that indigenous peoples face significant human rights issues regarding lands, discrimination, justice, culture, political participation, and access to services. It analyzes how the African Charter and the Commission's jurisprudence can be interpreted to better protect collective rights and the concept of 'peoples'. The report concludes by recommending the Commission adopt the report and maintain the Working Group's mandate.
Emergent global patterns_of_ecosystem_structure_and_function_form_a_mechanist...Dr Lendy Spires
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3. Distr.: General
ECA/ADF/9/3
19 September 2014
Original: English
Illicit financial flows
Issues paper
Marrakech, Morocco
12-16 October 2014
4.
5. 1
Illicit financial flows
Introduction
1. Financing developmental efforts in Africa has proved to be costly in the past, compelling
the continent to rely on external sources known as overseas development assistance. This type
of assistance is often unevenly distributed, unsustainable, and in some cases, damaging to the
national economies in the long run. Lessons learned from the Millennium Development Goals
have prompted a fresh wave of thinking towards a post-2015 transformative developmental
framework designed to ensure self-reliance for Africa. However, a structural transformation
agenda will require an adequate, predictable, sustainable and integrated financing mechanism
geared towards financing developmental goals (Abugre and Ndomo, 2014). Also, the continent
must embark on reforms to capture currently unexplored or poorly managed resources. This
includes curtailing illicit financial flows and rather transforming those funds into a powerful
tool for enhancing domestic resource mobilization, as a way of furthering the continent’s
development.
2. Illicit financial flows are unrecorded capital flows derived from: (a) proceeds of theft,
bribery and other forms of corruption by Government officials; (b) proceeds of criminal activities,
including drug trading, racketeering, counterfeiting, contraband and terrorist financing; and (c)
proceeds of tax evasion and laundered commercial transactions. Estimates from various recent
studies including “Financing Africa’s post-2015 development agenda” reveal that, from 1970 to
2008, Africa lost $854 billion to $1.8 trillion in illicit financial flows. The latest progress report of
the High-level Panel on Illicit Financial Flows from Africa revealed that the annual average was
between $50 billion and $148 billion a year (ECA, 2013). Commercial money (tax evasion and
trade and services mispricing) through multinational companies constitute the largest component
of illicit financial flows, followed by proceeds from criminal activities and corruption. The loss of
funds through illicit financial flows undermines revenue generation and reduces the benefits
from economic activities, particularly in the extractive sector (ECA, 2013). It also undermines
Africa’s ability to mobilize resources generated by such sectors to fund developmental goals.
This has had an adverse welfare and distributional effect on the poor, whose income prospects
for employment have dwindled (Kar and Cartwright-Smith, 2010).
Objective
3. The present issues paper aims to:
• Identify, examine and raise awareness about the development challenges that illicit
financial flows pose to Africa’s transformation
• Identify important mechanisms, the dynamics and the main challenges to curtailing
and redirecting illicit financial flows and their implications for Africa’s economic
transformation
• Establish knowledge for anchoring policy change to control and curb illicit financial
flows from the continent, as part of structural transformation
• Establish appropriate policy modalities, including the mobilization support for practices
that reverse such illicit financial outflows at national, regional and global levels
• Propose policies which promote a better global understanding of the scale of the
problem for African economies and encourage the adoption of relevant national,
regional and international guidelines and instruments, including safeguards and
agreements to redress the situation
6. 2
Illicit financial flows
• Draw on country experiences and case studies to examine the nature of illicit financial
flows and their effect on development, and tackle the challenges to efforts being made
to curb their magnitude and impact.
The broader issues
4. The issue of illicit financial flows is complex and technical in terms of factors relating to
origin, destination, scale, modalities, drivers, actors and regulatory responses. The concept of
illicit financial flows must be defined clearly, using the right terminology. Indeed, it has often
been used interchangeably with capital flight. Capital flight has a legal component, which is
registered in the books of the institution making the outward transfer, and an illegal one which
is not recorded anywhere. These hidden resources merit the term illicit as they may include
unrecorded capital flows that derive from criminal, corrupt (bribery and theft by Government
officials) and commercial activities.
5. Money laundering, drug trafficking, racketeering, counterfeiting, dealing in contraband
goods and terrorist financing account for 35 per cent of illicit financial flows globally (ECA,
2014). Money laundering was estimated at $1.6 trillion, the illicit drug trade $320 billion and
counterfeiting $250 billion. Also, commercial transactions by multinationals, tax evasion,
laundered commercial transactions, aggressive tax avoidance through harmful tax holidays, duty
waivers and mis-invoicing account for 60 per cent of global illicit financial flows. The remaining
5 per cent of these flows is driven by corruption (theft, bribery and other forms); although the
figure could be much higher. This is because corruption is cross-cutting and relates to other illicit
financial flows components such as organized crime, drug trafficking, money laundering, tax
evasion, trade mis-invoicing, lobbying and transfer pricing by private sector businesses, which are
often overlooked. Total annual illicit financial flows, according to the Economic Commission for
Africa and others, is estimated at $50 billion. This amount exceeds Africa’s official development
assistance. This estimate may well fall short of the actual figure, as accurate data are lacking for
all transactions and for all African countries (ECA, 2012).
6. These illicit financial flows have huge repercussions in Africa and pose multiple threats.
First, they drain resources and tax revenues by eroding the much-needed tax base for domestic
resource mobilization. They also curb domestic savings needed to reduce the continent’s annual
$31 billion infrastructure financing gap and tackle climate change and youth employment.
Secondly, illicit financial flows lead to governance issues such as resource distribution, which are
fraught with rent seeking rather than productivity maximization. This practice can be damaging
to the State as it undermines institutions such as banks, financial intelligence units and other
legal mechanisms for detecting and prosecuting perpetrators of illicit financial flows. Thirdly,
these flows perpetuate Africa’s economic dependence on external aid. This is reflected by the
level of official development assistance in Government budget. Indeed, the official development
assistance for some countries amounts to 70 per cent of total Government revenue. Lastly, the
lack of political will and leadership have helped illicit financial flows to thrive in Africa. The
greatest victims are the poor and the vulnerable, as resources which could have been used on
poverty reduction and economic growth measures are diverted elsewhere.
7. 3
Illicit financial flows
Specific issues
Illicit financial flows and natural resources
7. In the area of natural resources, illicit financial flows occur mainly through corruption, illegal
resource exploitation and tax evasion. Acts of corruption include bribes paid by companies and
money embezzled from tax collection and budgetary allocations. Illegal resource exploitation
has to do with undeclared corporate revenues from illegal resource exploitation and tax
evasion (including smuggling and transfer pricing). These forms of illicit financial flows have
dire consequences for the revenue streams of the extractive industry. Payment of bonuses, for
instance, is hindered by bribes and payments outside central budget accounts. Royalties are
affected by volume underreporting, value underestimation, price discount benchmarking or
indexation, extortion and avoidance of fee payment. Also, corporate income taxes are declining
because of transfer mispricing or over-invoicing, undue tax exemptions or rebates and company
misreporting on volume or quality, inflating of operational costs and embezzlement. This
situation affects development, as most countries are unable to maximize their gains from natural
resource wealth, with corrupt Government officials and companies benefiting at the expense of
the wider population (Le Billon, 2011).
Illicit financial flows and governance
8. Illicit financial flows and governance are strongly interrelated, with linkages at the domestic
and international levels. For instance, governance challenges caused by kleptocratic regimes,
political instability, weak tax administration, unfavourable exchange rates and the absence of the
rule of law are opportunities for illicit financial flows to thrive (Abugre and Ndomo, 2014). These
outflows are facilitated by the establishment of shadow financial systems such as tax havens,
secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade
mispricing and money laundering techniques, which enrich developed countries and other
developing regions. At the national level, illicit financial flows are undermining the dynamics of
macroeconomic components such as domestic savings, hard currency reserves and tax collection
in African countries. This has crippled their economies and reduced them to a cycle of external
borrowing and debt service payments. It has also perpetuated their dependence on external
aid. In 2011, for instance, total official development assistance inflows to Africa amounted to
$50 billion, compared to $17.4 billion in 2002. Indeed, illicit financial flows are a catalyst for
increased external borrowing, creating more scope for further debt, thereby limiting public
expenditure (NEPAD, 2013). They also threaten stability and security, as criminal activities such
as trafficking of people, weapons and drugs take place within and across borders (ECA, 2014).
Illicit financial flows and the private sector
9. Illicit financial flows affect the private sector in two ways. First, 60 per cent of such flows occur
through mispricing or invoice manipulation by multinational and private companies to channel
money abroad or launder money by bribing regulators or inspectors. These companies have a
strong global presence and influence and are therefore able to do transfer pricing and evade tax
through corrupt practices such as buying off national authorities. They even go as far as lobbying
for the introduction of low taxes or laxer regulations during contract negotiations. The inability
of African Governments to check and control such illicit acts has given free rein to multinationals
to engage in mispricing of exports and imports, under-declaration of the quantities of natural
8. 4
Illicit financial flows
resources extracted and generous tax holidays, sold out just before the expiry period of the
concessions, which actually re-emerge as an entirely different company. Secondly, illicit financial
flows undermine the private sector by stifling business and entrepreneurship, and significantly
reducing structural transformation and economic diversification (ECA, 2012).
Redirecting illicit financial flows to increase domestic resource mobilization
10. Increasing domestic revenue mobilization is a challenge for many Governments, particularly
in low-income countries.
11. According to several studies, illicit financial flows are a potential source of domestic
resource mobilization for the continent.
12. They undermine Africa’s fiscal policy space and deny its financial systems and Governments
the opportunity to use domestic resource mobilization schemes. Tax evasion is a significant
component of illicit financial flows. For example, double taxation treaties usually reduce or
eliminate tax avoidance (tax payable where the business takes place) and withholding taxes
(tax payable as the money crosses borders), allowing the financial transaction to go ahead
unchecked. Multinational companies take advantage of different double taxation treaties to
shift profits from country to country, exploiting the treaties with the lowest withholding tax rates.
13. Such staggering sums of illicit outflows have a significant economic impact on the ability
of African countries to mobilize domestic resources. The proceeds of such flows undermine the
continent’s potential for economic transformation as they drain tax revenues and scarce foreign
exchange resources, stifle growth and socioeconomic development and weaken governance. As
a result, African countries become trapped in a cycle of external borrowing and debt repayment,
thus limiting them to external aid dependency (NEPAD, 2013).
Curbing illicit financial flows to finance the adaptation costs of climate change
14. Illicit financial flows are a major challenge to the development of Africa, which is the most
vulnerable continent to the impact of climate change and the least able to cope with this change,
due, in part, to its low level of economic development. Adaptation to the impact of climate change
will cost African countries billions of dollars a year, increasing pressure on development budgets.
15. The continent is expected to experience increased drought and flood episodes, frequent
extreme events such as hurricanes, cyclones and rising sea levels. These changes will have
serious adverse consequences for many development sectors, and threaten the economies
and livelihoods of many African countries. Recent research further highlights these risks and
the urgency to seek solutions, considering that the current dynamic growth of the continent is
mainly attributed to increased natural resource use and climate-sensitive rain-fed agriculture,
vulnerable to seasonal variability and climate change (IPCC, 2013).
16. Given the potentially devastating implications of climate change on the lives and livelihoods
of people, adaptation measures are being implemented throughout Africa at all levels. These,
however, are not far-reaching, due to the limited budget. Adaptation costs for sub-Saharan
Africa are projected to be between $14 billion and $15 billion per year and expected to reach
9. 5
Illicit financial flows
$70 billion by 2045, if no additional mitigation action is taken (UNEP, Adaptation Gap Report).
Innovative domestic climate finance opportunities such as resource savings from curbing illicit
financial flows could help in financing climate change.
Understanding illicit financial flows and conflict in Africa
17. According to the Inter-Governmental Action Group against Money Laundering in West
Africa, extremists in the Sahel and insurgency in some African countries are obstacles to tackling
the problem of illicit funds related to terrorism (Sahadath, 2014).
18. Many of the violent conflicts in the forest regions of Africa are tied to “lootable” commodities
such as precious metals and rough diamonds that can be used to fuel conflict (CIFOR, 2010).
Revenue from forestry is used by belligerents to purchase arms and other materials. Logging
operators participate in the conflict by trafficking weapons and trading timber for arms. The
sector facilitates money laundering and other financial crimes.
19. Illicit financial flows pose a threat to the stability and security of African countries,
undermine institutions and democracy, and jeopardize sustainable development and the rule
of law. Clearly, to deal with the problems of conflict in Africa, it is important to understand the
nature and patterns of illicit financial flows.
Cross-cutting issues
Corruption
20. While corruption cuts across all categories of illicit financial flows, it is clear that the term
is mostly associated with public sector corruption such as bribery and abuse of office (ECA,
2014). It has the potential to facilitate criminal activities such as drug trading, racketeering,
counterfeiting, terrorism financing, tax evasion, trade in contraband goods and laundered
commercial transactions. Private sector businesses also perpetuate these vices by bribing public
officials and using their personal connections to influence administrative processes (ECA, 2013).
Tax havens and financial secrecy jurisdictions
21. Tax havens and financial secrecy jurisdictions serve as destination points for illicit financial
flows through tax evasion and money laundering. Their nature allows for secrecy and ease of
registration, which is often taken advantage of by business owners who use fake corporations as
fronts. By serving as a destination point for funds, these tax havens undermine efforts to stem
illicit financial flows from Africa and may encourage some African countries to also become
havens and financial secrecy jurisdictions (ECA, 2013).
Capacity issues
22. Capacity constraints have made it difficult to tackle the issue of illicit financial flows. One
clear example is the customs and revenue service, which is unable to deal with the issue of
mispricing in the trade of goods, services and intangibles. Another area is the extractive sector,
which lacks the capacity to negotiate contracts or ensure that Africa’s views are reflected in the
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Illicit financial flows
emerging global architecture to stem illicit financial flows. There is capacity imbalance between
prosecuting authorities and multinationals, which are always able to hire the best legal and
accounting experts to fight their case (ECA, 2014).
Conclusion
23. It is imperative to curtail illicit financial flows and fight corruption and the institution of
tax havens, so as to ensure the efficient and effective use of resources and domestic long-term
financing. Illicit financial flows should be retained on the continent; they could be invested,
saved or consumed. Much of this could be appropriately taxed to provide additional tax revenue
to fund Government budget, which is often in deficit; it would also help boost domestic resource
mobilization efforts. In line with this, Africa needs strong findings on mechanisms, strategies, and
peer research to distinctly show the impacts of illicit financial flows on the different sectors of
economic activity. Indeed, curtailing illicit financial flows could become a key delivery mechanism
for sustainable development.
24. Tackling the issue of illicit financial flows requires concerted efforts by countries of origin
and destination countries alike. The legal and financial approach must be transparent and the
international asset recovery regime integrated, in an effort to curb these outflows and unlock the
much-needed resources.
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