24 September 2013

Civil Society Critical in Monitoring Illicit Financial Flows, Mbeki

press release

Addis Ababa — Former President of South Africa Thabo Mbeki says civil society has an important role to play in dealing with illicit financialflows.

Speaking to the media after a two-day consultative meeting in Maputo, Mozambique on Illicit Financial Flows from Africa, Mr. Mbeki who is also Chair of the 10 member High Level Panel on Illicit financial flows called for greater involvement of civil society in curbing illegal capital leaving Africa. "The role of civil society has never been more critical as Africa faces one of the single most economic issues affecting the continents development." He said.

During the two day high level meetings, the Panel held separate meetings with President Armando Guebuza, high ranking government officials, state enterprises and members of civil society.

President Guebuza welcomed and commended the work of the panel which was established and inaugurated in February 2012 by the Economic Commission for Africa and the African Union to address the debilitating problem of illicit financial flows estimated at USD50Billion a year.

Addis Ababa, 24 September 2013 (ECA) - Among concerns raised by both government and other stakeholders was the capacity to monitor and verify what a country produces and exports to other countries. "Government officials often rely on what companies declare as the quantity and value of products being exported or imported, there is no mechanism to verify the quantity and value of exports with the destination country and in the case of imports the countries of origin" said an official from a state enterprise."

Civil society participants called for greater transparency and access to information from governments particularly on contracts entered into with foreign and multi-national corporations who account for 60percent of global illicit financial flows through undocumented commercial transactions, tax evasion, mispricing, corruption, transfer pricing, money laundering and other criminal activities.

Current evidence shows that Africa lost over US$ 854 billion in illicit financial flows between 1970 and 2008 corresponding to a yearly average of about US$ 22 billion a year facilitated by some 60 international tax havens and secrecy jurisdictions that enable creating and operating of millions of disguised corporations, shell companies, anonymous trust accounts and fake charitable foundations.

The meeting in Mozambique marks a near end to continent-wide consultations that have taken place including in Algeria, Democratic Republic of Congo, Kenya, Nigeria, Tunisia and Zambia.

Consultations are scheduled for South Africa, Europe, United Statesand a follow up visit to Kenya before the panel compiles its findings and recommendations which will be presented to the Conference of Ministers in March 2014.

Issued by:

ECA External Communications and Media Relations Section

PO Box 3001

Addis Ababa


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