The African Tax Network in collaboration with the United Nation Economic commission for Africa (UNECA) recently hosted the 5th Pan African conference on tax and illicit financial flows on 11th & 12th October at the Crowne Plaza Hotel in Upper Hill Nairobi.
The meeting attracted a number of interested organizations and individuals who subscribed and participated in large numbers.
According to the main speakers at the conference, Africa is losing USD$50 billion every year (equivalent to Ksh. 5 trillion) every year to illicit financial flows.
At the national level, Kenya is losing Ksh. 40 billion every year to the same loopholes since 2011.
To put things in perspective, Africa lost USD$511 billion in terms of domestic revenues between the year 2000 and 2010. This amount is higher than $317 billion Africa received as Foreign Direct Investment (FDI) and official development financial aid combined.
Many experts agree that if these lost financial resources can be tracked and reinvested, Africa will bide bye to poverty (2.5%) faster than it is the case now.
Africa has always lost its resources in a myriad of ways including transfer pricing and trade mis-pricing among others.
The African countries rich with minerals resources are more vulnerable to illicit financial flows. These countries are: Zambia, Nigeria, Congo and South Africa among others. The problem is due to irregularities transactions supported by weak policies governing mining.
The rot in illicit financial flows in Africa was exposed in May 2016 when leading African figures were alleged to be part of a larger scheme aimed at defrauding mother Africa of her financial resources through the help of one infamous firm called Mossack Fonseca.
A law firm based in Panama that allegedly colludes with fraudulent African economy holders through off shore secretive companies which run bank accounts that have proved hard to trace. It either creates or administers these companies in order to hide them from scrutiny.
