By Sonja Harnau and Otsile Malebaco
Illicit Financial Flows (IFFs), Money Laundering and Corruption hinder the achievement of the Sustainable Development Goals(SDGs) and African development by draining foreign exchange, reducing domestic resources, stifling trade, destabilizing macroeconomic conditions and worsening poverty and inequality. Effective anti-money laundering (AML) systems are key to prevent IFFs from circulating through the financial system. While many countries have AML systems in place, the question of how well these systems actually perform and prevent money laundering often remains unanswered.
To answer this question, a regional cooperation was launched by the African Organisation of English-Speaking Supreme Audit Institutions (AFROSAI-E), the pilot Supreme Audit Institutions from Kenya, Sierra Leone, Uganda and Zambia, the Netherlands Court of Audit (NCA) and the GIZ Good Financial Governance in Africa Programme on September 9th 2024 during a high level meeting in Nairobi, Kenya.
Supreme Audit Institutions can identify which adjustments are needed to ensure successful detection, investigation and prosecution of money laundering. And, as Thomas Ansorg pointed out “What would be a better way to strengthen state finances and state institutions as we have committed to in SDG 16 than through a solid auditing system?” The participating African pilot SAIs will play a crucial role in developing the coordinated AML auditing process and assessing the performance of the financial intelligence unit as a crucial institution in in the AML chain. This will also enhance audit institutions’ role in improving transparency, accountability and good governance.
This regional cooperation is supported by the German Federal Ministry of Economic Cooperation and Development (BMZ), co-funded by the European Union and Ministry for Foreign Affairs of Finland and contributes to the Multi Donor Action on Fighting Tax Related Illicit Financial Flows in Africa, implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
Collaboration Framework Between AML partners:
The four African pilot SAIs, AFROSAI-E, NCA and the GIZ GFG programme signed a collaboration framework for this joined initiative aiming at contributing to fighting IFFs and Money Laundering and strengthening regional cooperation.
They recognized that a key factor in this process is the involvement of the Supreme Audit Institutions which play a pivotal role in ensuring transparency, accountability and good governance in managing public funds, and monitoring if AML policies and strategies are working.
Meisie Nkau CEO-AFROSAI-E validated this collaboration, stating that “the decision for our SAIs to join forces in a collaborative performance audit on AML is both timely and strategic. This initiative underscores the importance of regional cooperation in tackling complex, transnational issues. By pooling our expertise, resources, and insights, we can achieve a comprehensive understanding of the effectiveness of AML measures across our nations.”
Enhancing the role of SAIs in anti-money laundering processes
By the end of the project, each country will have published its own AML audit report, and will consolidate the findings, drawing key lessons and recurring issues across the four nations. This regional approach represents a bold step towards enhancing financial transparency and tackling IFFs and Money Laundering in Africa. With the collaboration of the 4 African pilot SAIs and the support of GIZ GFG in Africa, AFROSAI-E and the Netherlands Court of Audit, the project is well-positioned to make meaningful progress in the fight against money laundering.
