Illicit Financial Flows (IFFs) are funds transferred across an international border using financial mechanisms that are either clearly illegal or illegitimate (even if possibly legal) because of the harm they cause to society. The United Nations Conference on Trade Development (UNCTAD) estimates that Africa loses 88.6 billion dollars each year, a figure that exceeds development funds and foreign direct investment. In addition to robbing African development resources, IFFs also undermine public trust, push people into poverty and hobble countries’ ability to manage a global crisis like COVID-19 and the climate crisis.
Further, IFFs reduce public resources in ways that disproportionately affect women. Countries frequently increase sales and related taxes to recoup lost revenue while reducing money for gender programs and health and education infrastructure programs. Primary caregivers – women – shoulder the burden.
Ending IFFs requires worldwide action. Unfortunately, the US is a large part of the problem. The US is the largest shareholder in the international financial institutions that forced developing countries to adopt structural adjustment programs in the 1980s and 1990s. Adjustment programs required countries to open their economies to an influx of multinational companies. In addition, the US is a destination for flows out of Africa because laws here facilitate tax evasion and tax avoidance. Ironically, the US would spend less on foreign aid if African countries could use their resources for development.
In 2021, Ghana-based international affairs analyst, Audrey Donkor, wrote in Foreign Policy Magazine:
“Supporting Africa’s fight against illicit financial flows is also a moral question… Defending the economic rights of Africans (through support for Africa’s fight against illicit financial flows) must go hand in hand with efforts to address discrimination against African Americans. As long as Africa remains underdeveloped, people of African origin everywhere around the world will face discrimination.”
The Time for Collective Action is Now!
Worldwide, governments and international institutions understand that IFFs are a threat, but many, including the US, lack the political will to act. Africa’s leaders and peoples call for the end to IFFs and the unconditional repatriation of stolen assets. Please join them in their efforts to end IFFs!
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Learn more aspects of illicit financial flows:
The US-Africa Bridge Building Project links economic inequality activists and social movements to strengthen collective efforts for tax justice at all levels of the global economy. Ending IFFs is a critical element in that fight. Please see these Fact Sheets below and visit this page periodically for key updates.
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