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Illicit money flows pose Africa development dilemma

Friday, March 13, 2015


Illicit money flows from Africa.


Illicit financial flows (IFFs) could cost sub-Saharan African (SSA) states up to 50 billion dollars per year in lost revenues, according to a high-level UN panel. The new report, commissioned by the African Union and SSA finance ministers, highlights the detrimental development consequences of IFFs -- in a context where many states are battling with declining commodity export revenues and rising debt burdens.


  • In SSA states with weak macroeconomic fundamentals and rising debt servicing costs will exacerbate fiscal losses caused by IFFs.
  • Nevertheless, the attractiveness of bond issuances as a form of cheap capital (with minimal conditions) means further issuances are likely.
  • Yet buyers of SSA paper are likely to become more discerning, making it harder for issuers to borrow on favourable terms.
  • Efforts to curtail poaching will be assisted by drone technology in Southern Africa, but their effective use risks community-level blowback.
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