News / Africa

Lawyers Discuss Illicit Flow of Money from Africa

FILE - Money is seen piled in the back of a car in the Democratic Republic of Congo's capital Kinshasa.
FILE - Money is seen piled in the back of a car in the Democratic Republic of Congo's capital Kinshasa.
— African lawyers say they are committed to bringing back money illegally taken out of the continent. During a meeting in Cameroon's capital Yaounde, former South African President Thabo Mbeki said the hemorrhage of money from Africa makes the continent heavily indebted and highly underdeveloped.

The lawyers say illicit financial flows, amounting to an estimated $50 to $60 billion per year, are carried out through theft and bribery by public officials, corporate transactions, criminal activities, international trade, public procurement and contracting, poorly enforced financial regulations and multi-national financial networks.  The African lawyers also say much of the loss cannot be traced.
 
The president of the Pan-African Lawyers Union, Elijah Banda, told VOA that illegal outflows are no longer only carried out by corrupt African leaders.
 
"The way we understand financial flows is not people taking boxes of cash across the borders. It is being undertaken in a very serious way in multi-national transactions, transfer pricing between corporations and their sister corporations overseas. Copper based countries that have an extractive industry are very prone to these activities. In Zambia we know that money is leaving the country which should not in form of proper declaration of taxes in form of proper declaration of profits by these multi-nationals. All these become illegal flows," said Banda.
 
A Nigerian human rights lawyer, Femi Falana, who has been instrumental in trying to bring back money taken out of his country, told VOA that multi-national companies work in collaboration with his country's political elite to loot the peoples' wealth.
 
"The Nigerian government out of sheer irresponsibility, after 54 years [of oil exportation] does not know how much oil is produced in Nigeria daily. They rely on what Shell, Mobil and the rest [of the oil companies] tell us. This is what we have lifted from the ground. We lose in some years like 2011, $16 billion in one year," said Falana, adding that bad legislation also facilitates the illegal outflow of money.
 
"In 2011, the [Nigerian] national assembly amended the money laundry act to allow anybody travelling out of the country to declare it.  That was primitive. What used to happen before then was that nobody could go out of the country with more than $10 thousand cash.  Any other amount beyond that had to go through a banking process, but when you say I can just make millions of dollars, get to the airport, declare it and take it out, that is primitive," said Felana.
 
Stopping the flow

A joint report by the African Development Bank and the United States advocacy group Global Financial Integrity, presented during the conference, indicated that between $1.2 trillion and $1.4 trillion left Africa in illicit financial flows between 1980 and 2009, an amount which is almost equal to Africa's current gross domestic product.
 
Cameroonian born lawyer Akere Muna told VOA they are working with the World Bank to trace the money.
 
"The World Bank calls this initiative about money that has been taken out: 'stolen assets recovery initiative.' So the World Bank is calling the money that has been taken out stolen assets. It means therefore that if any bank deals with that money it is dealing with stolen assets," said Muna.
 
It will not be an easy thing to trace and bring back the money.
 
Anna Gardner of the London-based NGO "International Lawyers for Africa" told VOA that the process is often long and cumbersome.
 
"Firstly, there has to be due diligence in the victims country to identify how much money is missing. Then there is a process once that is identified to get court orders to say that those assets have been identified, they need to be frozen and then the real process now starts. It is a long and convoluted process, the burden of proof is too great," said Gardner.
 
Elijah Banda, however, says the lawyers resolved to bring the matter to the attention of the wider African public and the world through targeted messaging and the building of strong coalitions and partnerships.  
 
As Thabo Mbeki said, the massive illicit loss of money continues to hurt Africa's financial condition, development, and its future.

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