Illicit financial flows cost Nigeria, other African countries $90bn annually-AfDB

Nigeria, South Africa and other African countries have been projected to be losing as much as $90 billion to illicit financial flows annually.

This is according to the Chief Economist and Vice President, African Development Bank (AfDB), Prof. Kevin Urama who noted that much more is lost in illicit resource flows and resource theft, poorly implemented fiscal policy incentives, and excessive dependence on commodity exports for foreign exchange earnings.

This is even as he stated that the leakage exposes countries to highly volatile global market prices and highly vulnerable supply chains.

Urama stated this on Thursday in Abuja at the graduation ceremony of the first cohort of the Public Finance Management Academy for Africa (PFMA).

He revealed that in 2021, the bank approved a capacity development strategy, a strategy for economic governance in Africa, a framework for the management of illicit financial flows, and a multi-dimensional action plan for the mitigation of debt distress in Africa.

The AFDB Group vice president remarked that the bank launched a programme to produce a Public Service Delivery Index (PSDI) to provide an independent and standardised index for assessing the delivery of public services by public servants.

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He added that the goal is to work with partners to establish a prize to incentivise improvements in the management of public resources and deliver improved quality of public services to countries.

Speaking on the PFMA, Urama averred that the programme was approved in June 2022 by the board of directors of the bank, stating that the PFMA is designed to deliver high-level structured capacity development to African countries on public financial management.

In his remarks, the Special Adviser to the President on Economic Affairs, Dr. Tope Fasua, stated that public financial and debt management remains on the front burner of the federal government’s agenda.

He disclosed that key economic policy objectives of the government include optimisation of revenue mobilisation and tax reforms, blocking of leakages in public finances, improving public procurement and spending efficiency, and supporting the ease of doing business environment for private sector investments and job creation.

“The PFMA is an implementation activity of the African Development Bank Group’s programmes to strengthen the capacity of African countries in economic governance and knowledge management to enhance wealth creation, prudential management of public finances to improve the quality of lives for Africans. The rationale for focusing on the PFM is obvious. Africa is natural resource rich and often cash poor”.

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