Global Financial Affairs released a shocking report last month detailing that billions of dollars have been illegally removed from Africa in the past few decades.  The funds, which were given in good faith from various sources, were meant to be used to alleviate the extreme hunger and poverty that permeate a large part of the continent.

The report  stated that an approximate $854 billion U.S. has been lost from Africa through illicit outflows between the years 1970-2008. This builds upon GFI’s 2008 report that created great waves when it declared that developing countries lost almost $1 trillion a year between 2002-2006.

Illegal capitol outflows harm the growth of developing economies as well as diverting much-needed funds from poverty-stricken populations.  The report asserts, very correctly, that this outflow undermined donor-driven efforts to end poverty and boost economic growth and was the main stumbling-block to development.  The syphoning of money away from its source, makes donors hesitant to donate to any causes administrated by government or government-affiliated organizations.

The new report is expected to be highly visible in the 3^rd Annual Conference of African finance ministers in Malawi, which is currently underway.

“The amount of money that has been drained out of Africa—hundreds of billions decade after decade—is far in excess of the official development assistance going into African countries,” said GFI director Raymond Baker. “Staunching this devastating outflow of much-needed capital is essential to achieving economic development and poverty alleviation goals in these countries.”

“This report breaks new ground in the fight to end global poverty with analyses and measurements of illicit financial outflows never before undertaken,” said Mr. Baker. “As long as these countries are losing massive amounts of money to illicit financial outflows, economic development and prosperity will remain elusive.”

The concern is that conomic growth without credible reform could lead to more capital flight.

Mr. Baker is an outspoken advocate of transparency in government and backs the ‘Transparency’ campaign to enable people around the world to take action on the problem of illicit financial flows. Hopefully this report, the first of its kind, will push people into demanding transparency within governments and demand economic accountability.

This report is unique as it brings actual numbers into conversation with the very real problem of money leaving Africa and being siphoned away from aid programmes and poverty-stricken populations.  Formerly, there were fears of this practice being prominent, but no real data to back up the claims.

Mr. Baker adds that when the G20 meets in Canada this summer, the problem of illicit financial flows must be at the top of the agenda

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