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.