Illicit financial flows: the reason Africa is debtor to the rest of the world.
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Date
2021
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Abstract
Multinational companies engaging in commercial transactions or activities are
responsible for 60% to 65% of illicit financial flows that leave Africa. Although on
average Africa experienced a 5% annual economic growth for the last decade, the
problem is, Africa experiences huge challenges to use domestic resources for
investments. GFI estimated that trade mis-invoicing makes up the largest portion of
illicit financial flows. The problem is that the global legal system aimed at tackling illicit
financial flows is based on the idea that the issue should be addressed by the domestic
courts. This idea is not practical since illicit financial flows consist of the acquisition
and the cross-border transfer of funds. The objective of this study is to explore the
magnitude and manner in which trade mis-invoicing contributes to illicit financial flows
and provide a solution to such problem. The study objectives will be achieved by
researching the most recent data from domestic and international sources. The
findings of this study indicates that the Malabo Protocol, which is a regional instrument
offers the most practical solution for the illicit financial flows from Africa.
Description
Masters Degree. University of KwaZulu-Natal, Durban.