Nigeria and Other African Countries Lose $1.6bn Daily to Illicit Financial Flows – AfDB

The African Development Bank (AfDB) has revealed that African countries, including Nigeria, are losing an estimated $1.6 billion daily due to illicit financial flows (IFFs). These outflows, which include illegal tax evasion, corrupt practices, and the movement of illicit funds across borders, have detrimental effects on the continent’s economic stability, development prospects, and efforts to combat poverty.

According to the AfDB, these illicit flows are primarily driven by activities in sectors such as mining, oil, and gas, where companies and individuals often exploit loopholes in financial systems and evade taxes. The report highlights that Nigeria, as Africa’s largest economy, bears a significant portion of these losses, which has contributed to the country’s ongoing challenges in financing infrastructure, healthcare, and education.

The AfDB emphasized that these illicit flows not only deprive African nations of much-needed resources but also undermine efforts to improve governance, transparency, and the rule of law. The funds lost to IFFs could have been used to finance vital social programs, infrastructure projects, and other key sectors that could drive economic growth and development across the continent.

The bank called for stronger enforcement of anti-money laundering laws, improved financial transparency, and regional cooperation to curb these outflows. It also urged African governments to adopt stricter regulatory frameworks to prevent corporate tax evasion and strengthen the monitoring of cross-border financial transactions.

Experts have underscored the need for Africa to address the root causes of illicit financial flows, including corruption, weak governance, and inadequate financial regulations. Many suggest that by implementing better systems for tracking and managing financial transactions, African countries could significantly reduce IFFs and retain a larger share of their economic resources.

The report also pointed to the role of international financial institutions and foreign governments in curbing illicit flows. The AfDB called for greater collaboration between African nations and the global community to tackle issues like money laundering, tax havens, and the lack of financial transparency in multinational corporations.

As Nigeria and other African nations continue to lose billions to illicit financial flows, the AfDB’s findings serve as a stark reminder of the need for comprehensive, coordinated action to protect the continent’s financial integrity and ensure that resources are used for the benefit of the people.