'Large sums of money leaving Africa illegally, in different ways'

Thabo Mbeki says the money is taken out of Africa by companies & wealthy individuals, without paying tax.

Former South African President Thabo Mbeki. Picture: Facebook.

JOHANNESBURG - Former President Thabo Mbeki says new trade data by the International Monetary Fund (IMF) shows that the amount of money leaving the African continent illegally every year has risen from $50 billion to $80 billion.

He says the money is taken out of African countries by companies and wealthy individuals without paying tax or following proper procedure.

But the former president says the new figure is also an underestimate.

Mbeki was tasked with formulating the illicit financial outflows report for the African Union (AU) and has just returned from a world tour.

During the tour, Mbeki met with world governments' banks and parliaments.

Mbeki says large sums of money are being taken out of Africa illegally in different ways, by multi-national companies.

"It may reflect, there's more thorough work being done, or it may reflect as an increase. It is based on the trade statistics, it's trade-mispricing and it's actually therefore an underestimate."

He says when the scale of transfer pricing is properly considered, it becomes clear that the new figure of $80 billion being stolen is an underestimation.

"It's an underestimate of the volume of the outflows; if you add it, for instance, what happens to the transfer pricing, the figure would go up."

Mbeki says their global tour was aimed at ensuring practical steps are being taken to stop the phenomenon and recover the money.