Globalizing African Voices On Illicit Financial Flows, Asset Recovery

For over two decades, the issue of Illicit Financial Flows (IFFs) has been a major concern for the Africa continent as assets and funds running into billions of dollars continue to find its way out of the continent as a result of corrupt public servants and multinational corporations. Their destination is the Western and European countries.

Though stakeholders including the African Union Member-States have played significant roles in the international efforts to combat these opaque and destabilizing transfers of capital, such efforts have not yielded the desired goal.

Tackling corruption, particularly IFFs, has become a matter of survival for Africa’s development and must be treated with urgency. There is broad consensus that the funds being bled out of Africa, could be channeled towards the continent’s development if successfully retained.

Former President of South Africa and the Chairman of the African Union High Level Panel on IFFs, Thabo Mbeki, had stated that the African Continent suffered an annual loss of over $50 billion as at 2015 through IFFs, which has grown to $80 billion yearly.

Mbeki had in 2022 made a spirited call for a United Nations Tax Convention to halt illicit financial flows from Africa and multinational and corporate tax abuse.

He had also called for the establishment of a globally inclusive intergovernmental tax body to strengthen global efforts against IFFs.

As part of measures towards addressing the IFFs in the Extractive Industries, the African Union (AU) High-Level Panel on Illicit Financial Flows (AU HLP on IFF) and the Working Group on the Common African Position on Asset Recovery (CAPAR) in collaboration with the African Union Advisory Board Against Corruption, Coalition for Dialogue on Africa (CoDA), Forum Civil, the Pan-African Lawyers Union (PALU) and TrustAfrica, held a conference in Dakar, Senegal.

The Conference, which has as theme “Addressing Illicit Financial Flows and Asset Recovery in the Extractive Industries”, was attended by policymakers, regulators, civil society organizations, industry stakeholders and the media. It was held on the margins of the 2023 Global Conference of the Extractive Industries Transparency Initiative (EITI) in Dakar, Senegal, which is the first ever EITI global conference to be held in Africa despite African countries being the majority among the EITI’s fifty-seven member states.

The conference was organized in line with African Union Decisions and Instruments adopted by African Heads of State and Government. These include the AU Special Declaration Assembly/AU/Decl.5 (XXIV) of January 2015, the Nouakchott Declaration on the African Anti-Corruption Year (June 2018) and the Common African Position on Asset Recovery (CAPAR) adopted by the AU Summit in February 2020.

The Head of Secretariat of the African Union High Level Panel on IFFs and the Working Group on Common Africa Position on Asset Recovery (CAPAR), Mrs. Souad Aden-Osman, emphasised the need for African Voices on IFFs and asset recovery to be heard at the global level.

Speaking at one of the plenary sessions of the 2023 Global EITI Conference, Aden-Osman said it had become necessary to strengthen African Voices on stemming IFFs and recovery of assets at the international level.

“The problem with corruption is that the proceeds of corruption are stored somewhere and it is important to put the issue of IFF in the front burner to check this menace,” she stated.

She added, “African Voices and feelings on Illicit Financial Flows and Asset Recovery need to be heard at the global level. We need to strengthen the African voices at the global level.

“Stopping the IFFs and the recovery of African assets in foreign jurisdictions will help the development of African countries Our focus is to improve and develop the capacity of African Union Member-States and find ways of increasing domestic resource mobilization,” said Aden-Osman, who is the Executive Director of Coalition of Dialogue on Africa (CoDA).

In her presentation at the Conference on addressing IFFs and Asset Recovery titled “Tracing the Journey Towards CAPAR and Progress, Aden-Osman, urged African countries to halt the increasing rate of corruption and IFFs in order to achieve the Sustainable Development Goal targets.

She noted that CAPAR was a policy advocacy tool and bedrock for negotiating the return of African Assets consigned in foreign jurisdiction including tracing, identifying, repatriating and effectively managing the continent’s assets as well as cultural heritage assets.

Aden-Osman stated that the African Union High Level Panel (AU HLP) had facilitated the mobilisation and bringing together various African governmental and intergovernmental agencies, civil society organizations, and advocacy groups to implement the directives of the Assembly incorporating the recommendations of the Panel

“The AU HLP on IFF and Coalition for Dialogue on Africa (CoDA) will continue to advocate for more inclusive and transparent international financial and trade governance systems that are fairer for African countries, established the necessary platforms for presenting a unified African voice in this regard, and strengthen partnerships with continental and regional organizations, think tanks and research institutions

“The AU HLP on IFFs from Africa began implementing Phase II of its work, which focuses on national level actions by African Member States. Ongoing effort to assess the status of implementation of the HLP on IFFs recommendations cover the following African Union Member States – Algeria, Burkina Faso, Democratic Republic of Congo, Ghana, Lesotho, Malawi, Mauritius, Namibia, Nigeria, South Africa, Sudan, Tanzania and Tunisia,” said Aden-Osman, who is also the Executive Director of CoDA.

The Chairperson of the AU Advisory Board Against Corruption (AUABAC), Seynabou Ndiaye Diakhate, called for unity among Member-States of the African Union in the realisation of stemming IFFs.

“Most of the IFFs are from the extractive industries and you will feel like crying if you see the impact of IFFs and corruption on the continent. Fighting corruption and IFFs are not a task for any institution. We need to be united and coordinate our activities in order to have impact and achieve our goal,” said Diakhate, who was represented by the Executive Secretary of the AU Advisory Board Against Corruption, Mrs. Charity Nchimunya.

In his submission at the IFFs and Asset Recovery Conference, a member of the African Union High Level Panel on IFFs and the Working Group on Common Africa Position on Asset Recovery (CAPAR), Barrister Akere Muna, called on the African governments to flush corruption and IFFs out of the continent.

He said Africa needs to strengthen and make its judicial system stronger in the fight against corruption and Illicit Financial Flows

According to him, African countries should make it hard for the multinational corporations to take money from the continent and hide in foreign jurisdictions.

He said, “The poorest and weakest suffer most anywhere corruption and IFFs thrive. At EITI, we have seen the complicity between government officials and extractive companies, multinational corporations, to the detriment of the citizens.”

He queried, “How is it possible that a private jet is loaded with cash and flown to some countries in Africa just to pay bribes?”

During the two-day exchanges, participants discussed CAPAR, the need for enhanced transparency and accountability, stricter regulations and increased international cooperation in the extractive industry.

In addition, they also discussed issues relating to the impact of illicit financial flows and the common occurrence of corruption in commodities trading.

Participants reflected on how best to engage national authorities, the judiciary and the citizenry to hold the perpetrators and accomplices accountable.

It is worth noting that CAPAR is a policy advocacy instrument aimed at assisting AU Member-States to trace, identify, repatriate and subsequently effectively manage their assets, including items of cultural heritage, in a manner that respects their sovereignty and for the benefit of African peoples who are ultimately victims of illicit financial flows.

CAPAR now stands as the best tool for Africa’s legal and technical framework in structuring the managing of the return of Africa’s stolen assets from the foreign jurisdictions in which they may be held into the rightful source countries.

That is why it is imperative that Africa’s assets, including financial resources lost through illicit flows, be returned to finance the continent’s development agenda as underlined in the AU High Level Panel Report on Illicit Financial Flows, adopted by African Heads of State and Government in January 2015.

ENDS