||Khadija Sharife and Shauna Mottiar testify at UN conference on illicit capital flight, 18 June
|Former President Mbeki to chair high level talks on illicit financial flows
Addis Ababa, 14 June 2013 (ECA) - The former President of South Africa, Mr. Thabo Mbeki will chair a two day High Level Meeting on illicit financial flows in Lusaka, Zambia on 17th and 18th June, 2013.
The High Level Panel (HLP) on Illicit Financial Flows from Africa, established by the Economic Commission for Africa (ECA) and the African Union (AU) was inaugurated in February 2012 to address the debilitating problem of illicit financial outflows from Africa estimated at $50 billion a year. The Panel is chaired by President Mbeki, former president of South Africa, and composed of nine other distinguished personalities from within and outside Africa
Illicit financial flows constitute, among others, undocumented commercial transactions and criminal activities characterized by over pricing, tax evasion and false declarations facilitated by some 60 international tax havens and secrecy jurisdictions that enable creating and operating of millions of disguised corporations, shell companies, anonymous trust accounts, and fake charitable foundations. Other techniques used include money laundering, transfer pricing and corruption.
While illicit financial flows are a global problem, their impact on the continent is monumental thereby representing a significant threat to Africa’s governance and economic development. Current evidence shows that Africa lost over US$ 854 billion in illicit financial flows between 1970 and 2008 corresponding to a yearly average of about US$ 22 billion. The trend has been increasing over time and especially in the last decade, with an annual average illicit financial flow of US$ 50 billion between 2000 and 2008. However, these estimates may well be short of reality as they exclude such other forms of illicit financial flows as proceeds from smuggling and mispricing of services. The level of illicit financial outflows from Africa exceeds the official development assistance to the continent, which stood at US$46.1 billion in 2012.
Some of the effects of illicit financial outflows are the draining of foreign exchange reserves, reduced tax collection, canceling out of investment inflows and a worsening of poverty. Such outflows also undermine the rule of law, stifle trade and worsen macroeconomic conditions.
Meanwhile, President Mbeki will hold talks with H.E. President Michael Sata to enhance dialogue and policy discourse on the matter. Preliminary evidence shows that taking prompt action to curtail illicit financial outflows from Africa will provide a major source of funds for development programmes on the continent in the near future.
Over 60 delegates comprising key stakeholders from East and Southern Africa are expected to attend the regional consultation on the issue. Similar consultations have taken place in Kenya, Tunisia, Liberia and Nigeria.
ECA External Communications and Media Relations Section
PO Box 3001
251 11 551 5826
ECONOMIC COMMISSION FOR AFRICA
Regional Consultation on Illicit Financial Flows from Africa, Eastern and Southern Africa
Tuesday 18 June 2013
09.30 – 10.00 Tea/Coffee on arrival
10:00 – 10.20 Welcoming Remarks
Mr. Abdalla Hamdok, Deputy Executive
Secretary, United Nations Economic Commission for Africa, Chair, Technical Committee of HLP on IFF
10.20 – 10.40 Statement by H.E. Thabo Mbeki, Former President of Republic of South Africa and Chair, HLP on IFF
10.40 – 11.00 Tea/Coffee Break
11.00 - 11.30 Presentation on “Illicit Financial Flows from Africa: Scale and Development Challenges”, Ambassador Olusegun Apata, Member of the HLP on IFF
11.30 – 13.00 Questions and Comments
13.00 – 14.00 Lunch
14.00 – 16.00 Reflections on Country Experiences
16.00 – 16.30 Closing Remarks
16.30 – 17.00 Press Conference