By Otsile Malebaco
Illicit Financial Flows (IFFs) constitute a significant barrier to sustainable development and the implementation of the SDGs. IFFs refer to the movement of money across borders that is illegal in its source (e.g. corruption, smuggling), its transfer (e.g. tax evasion), or its use (e.g. terrorist financing). They also include flows that are not strictly illegal but are associated with tax avoidance. Therefore, IFFs have a direct impact on a country’s ability to raise, retain and mobilise its own resources to finance sustainable development. This is especially important in the African context.
Against this background, the African Union Pan-African Conference on Illicit Financial Flows (IFFs) and Taxation brought together more than 250 delegates, a broad combination of stakeholders to address the critical issue of IFFs in Africa. The conference was held from 26-27 June 2024 in Tunis, Tunisia under the theme “Africa’s Tax Agenda in Combatting Illicit Financial Flows: From Words to Action.” The conference highlighted substantial strides African nations have made in combating IFFs while also focusing on the persistent challenges that remain. To successfully address IFFs that are complex and cross-border in nature, strengthening collaboration on combatting IFFs across sectors and countries as well as establishing a united approach both globally and regionally for effective design and implementation of policies, laws and tools to combating IFFs is essential.
The opening ceremony featured keynote speeches from notable figures, including Ambassador Albert Muchanga, African Union Commissioner for AUC-ETTIM, who stated that “Africa’s potential and positive growth path is severely hampered by the substantial drain of resources through IFFs (USD 89 billion annually) and domestic tax incentive regimes (USD 220 billion annually).” He also underpinned the relevance of public debt, which almost tripled since 2009, for which African countries pay significantly higher interest rates compared to other regions. These factors undermine the continent`s economic, social and political progress, depriving African countries of the critical resources needed to invest in its people and future.
Birgit Pickel, Director-General for Africa at BMZ, in her opening statement emphasized the serious cross-border challenges posed by illicit financial flows and the importance of a holistic approach to combating IFFs. She praised the collaborative efforts of the AUC-ETTIM and the Pan-African partners in addressing this issue, highlighting Germany’s commitment to supporting these initiatives through various programmes and initiatives.
Part of the conference was the launch of Team Europe Initiative (TEI) to combat IFFs and related Transnational Organised Crime in Africa. This joint initiative of the European Commission and four EU Member States – Germany, Finland, France and Sweden – aims to serve as a platform for coordinating efforts, fostering political dialogue, and ensuring mutual accountability to drive change. In his speech on behalf of the EU, Mr. Gianfranco Bochicc, International Relations Officer for European External Action Service stated that “this joint initiative demonstrates our commitment to forging stronger and more effective partnerships with our African counterparts to combat illicit financial flows.” The TEI on IFFs takes a comprehensive approach spanning the entire illicit financial flows value chain – from trade and tax-motivated IFFs to money laundering and terrorism financing – emphasizing a systematic “follow-the-money” strategy and highlighting the nexus between illicit financial flows and transnational organized crime.
One key objective of the conference was to take stock of best practices and relevant continental-wide initiatives undertaken by countries as well as regional institutions in response to the African Union Heads of State and Government decisions and commitments to curb IFFs, meeting the financing gap for Africa’s development. Bringing together the various stakeholders and actors in the fight against IFFs also serves another key objective of the conference, namely, to facilitate and engage multi-stakeholder partnerships to ensure meaningful inclusivity, and broad-based support.
Finally, participants during the three-day event critically examined and discussed the effectiveness of different measures implemented in response to the findings of key reports in Africa on combating IFFs as well as the contributions of the African Union and other stakeholders in addressing IFFs at different levels. The conference included various sessions, keynote speeches, panel discussions and side events. The GIZ side-event explored the role of investigative journalism in the fight against IFFs and discussed what “good” investigative journalism means in times of fake news on the one hand and an increasingly dangerous environment for investigative reporting on the other. The side event also discussed how to deepen collaboration between different political stakeholders and journalist networks on the continent.
"The last years have shown that to be effective, stakeholders from outside and inside the state need to come together. Civil society and the private sector are important actors in this regard. They have long been special partners for the German government in its approach to fighting IFF - be it at home in Germany or together with our partners in development cooperation" Mrs. Birgit Pickel, Director for Africa in the Federal Ministry for Economic Cooperation and Development (BMZ)
"Let us recognize that combating IFFs is not an isolated task but a collective responsibility. By working together, Supreme Audit Institutions can contribute significantly to a more transparent, accountable and Equitable global financial system." Ms Meisie Nkau, CEO: The African Organization of English-speaking Supreme Audit Institution (AFROSAI-E)
One of the main outcomes of the conference is the adoption of the Tunis Declaration, which will be presented to relevant AUC policy organs. The conference also succeeded in establishing a sustainable forum for ongoing dialogue and information exchange between stakeholders, enhancing collective understanding and strategic approaches to combating IFFs in Africa.
The Pan-African conference was organised by African Union – Economic Development, Trade, Tourism, Industry, Minerals (AUC-ETTIM) in partnership with the African Tax Administration Forum (ATAF), and the Tax Justice Network Africa (TJNA) in collaboration with the African Organisation of Supreme Audit Institutions (AFROSAI), the African Organisation of English-speaking Supreme Audit Institutions (AFROSAI-E) and the African Organization of Public Accounts Committees (AFROPAC) with the support from the European Commission (EU), the Federal Ministry for Economic Cooperation and Development (BMZ) and the Ministry for Foreign Affairs of Finland for the “Tackling Tax Related Illicit Financial Flows in Africa Project” implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
As Africa continues to push towards the goals of Agenda 2063 and the United Nations Sustainable Development Goals (SDGs), the fight against illicit financial flows remains crucial. The 12th Pan-African Conference on Illicit Financial Flows and Taxation presented a significant step in the ongoing effort to put words to action in the development of Africa.
Pan African Conference participant attendees
