‘Africa’s illicit financial flow difficult to detect’
Thabo Mbeki says issues such as tax avoidance & incentives make it hard to detect illicit financial flow.
JOHANNESBURG - Former President Thabo Mbeki says the complexity of transfer pricing, tax avoidance and incentives, and the expert lawyers hired by multinational companies have made the illicit financial flow out of Africa difficult to detect and prosecute.
On Thursday, Mbeki presented the report by the African Union's panel on illicit finance flows at the Pan African Parliament sitting in Midrand.
Mbeki says around $1 trillion has left the continent illegally over the last 50 years.
The former president says the commercial sector is the main culprit.
"The panel report says that the commercial sector is the major source of illicit financial outflows in Africa. That it is least understood. And this is due to the range of methods by which illicit financial flows take place in the commercial sector as well as a technicality of issues."
Earlier Mbeki said illegal drug trafficking accounts for about 30 percent of the $1 trillion lost.
The amount of money leaving the continent every year is estimated to be enough to finance the African Development Bank's infrastructure requirements.