Former South African President Thabo Mbeki said multinational corporations were responsible for much of the illegal flow of money out of Africa
Mbeki, who is the chairman of an UN-mandated panel on Illicit Financial Flows from Africa, added that the group has begun investigating illegal export of capital from the continent.
“It’s clear that a huge part of this illicit flow comes from activities that are carried out by multi-national corporations,” Mbeki remarked.
According to panel estimates, up to US$50bn was lost annually to illicit activities such as drug smuggling, tax evasion, over-invoicing and under-pricing, which was roughly twice the total amount of development assistance the entire continent receives each year.
A recent report by a US-based research organisation Global Financial Integrity (GFI) found the most common way that illicit money was moved across borders was through international trade and money laundering, which accounted for about 60 per cent of this illicit activity.
According to GFI’s study, corruption by government officials only amounted to about three percent of illegal transfers.
The UN panel met with Kenyan President Mwai Kibaki and top officials from the finance ministry on 14 August 2012 to discuss ways to engage the government in an effort to stop the money flows.
Mbeki said he had faith that African governments would take action to stop the illegal flow of money.
“I'm sure that we’ll be able to sort this matter out because, in the end, the problem is of such a size and such a nature that it has to be dealt with,” Mbeki added.
