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Mbeki: Illegal financial flows crippling Africa

Thabo Mbeki told the Pan African Parliament that the illicit flows cost Africa $1 trillion over 50 years.

FILE: Thabo Mbeki. Picture: EWN.

JOHANNESBURG - Former President, Thabo Mbeki has told the Pan African Parliament that illegal financial flows have cost the continent $1 trillion over the past 50 years.

Mbeki, who's also the chairperson of the African Union's (AU) panel on illicit financial flows, today presented its report to the Parliament sitting in Midrand.

He says multinational corporations are the prime suspects and illegal drug trafficking accounts for about 30 percent of the money.

Mbeki first started investigating illicit financial flows for the AU in 2012 and says since then they've uncovered wide-ranging abuses of financial laws.

"The figure of 50 billion is an underestimate, as it excludes such elements as trading services and intangibles, process of bribery, and trafficking drugs, people and firearms."

He says the failure of African states to prevent the outflow of capital and tax evasion has had a serious impact on Africa's growth.

"You know that many of our African countries did not achieve all these MDGs because of insufficient capital to finance the required actions."

The amount of money leaving the continent every year is estimated to be enough to finance the African Development Bank's infrastructure requirements.