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African parliamentarians have committed to continue leveraging their role as legislators to exercise oversight and legislative responsibilities to combat illicit financial flows in the continent. They made this commitment at the African Parliamentary Network on Illicit Financial Flows and Taxation (APNIFFT)2023 Continental Conference that was held in Nairobi, Kenya from 25th to 26th October 2023.
APNIFFT 2023 Continental Conference brought together over 200 members of parliament from 34 countries and provided a platform for its members, African legislators, to draw synergies, learn from each other and boost their capacities in tackling illicit financial flows (IFFs) and tax injustices in the continent.
The conference was graced by the Deputy Speaker of Kenya National Assembly Hon. Gladys Sholei, who stated that Africa's ability to raise sufficient resources to achieve its development objectives is critical. Hon Sholei further noted that the continent is currently grappling with a funding gap of over $ 200 billion annually and increased challenges in accessing private finance and overseas development assistance.
“African countries must improve their domestic resource mobilisation efforts, which currently are at a median of 13 per cent tax-to-GDP. This tax-to-GDP ratio is the lowest as compared to other regions. This can be attributed to the perversive issue occasioned by IFFs. The United Nations, CTDA and the UN EACA report of 2020 showed that Africa could stand to regain $89 billion annually, which is approximately 4% of the continent's GDP if IFFs are adequately addressed.” Hon. Sholei noted.
In his remarks, Hon. Kuria Kimani, MP and Chair, of the Departmental Committee on Finance and National Planning, Kenya National Assembly noted that Africa has been relying on the Britton Woods Institutions for budget funding. Therefore, the conversation on profit shifting and tax avoidance is a matter of Africa's sovereignty. He stated that the Nairobi and Kigali International Finance Reporting Centres are critical institutions that will help curb IFFs.
In his keynote speech during a panel discussion themed “Unpacking the Theme: Africa's Leadership in Combatting IFFs – A Legislative Lens,” Dr. Patrick Ndzana Olomo, Ag. Head Economic Policy and Sustainable Development, Department of Economic Affairs at the African Union Commission stated that Africa showed leadership in combatting IFFs by drafting the High-Level Panel Report on IFFs (Mbeki Report, 2015).
The Mbeki report highlights that the continent loses an estimated $50 billion to $80 billion annually through illicit financial flows. This staggering figure significantly surpasses the amounts lost in other regions. These diverted funds that could otherwise be directed towards infrastructure development, social programs, and job creation are instead siphoned off from the continent, perpetuating a cycle of economic stagnation and limited opportunities.
In his remarks, Hon. Fred Ikana, MP and APNIFFT Kenya Caucus Chair said that IFFs have negatively affected Africa's development efforts, undermined its state institutions, and thus led to the weakening of the rule of law.
“Stopping this financial vice, cannot be gainsaid for the stake of the stability of African countries economies. In Africa, IFFs constitute undeclared profits by Multinational Corporations and proceeds from corruption, drugs, and human trafficking. We need actionable resolutions that will lead to implementing programmes across the African continent that will build a united, peaceful, and prosperous Africa.” He added.
In her remarks, TJNA Executive Director Ms Chenai Mukumba noted that part of the reason Africa finds itself in a debt crisis is because it has not been able to harness its resources and utilise them for development.
"Africa is in a debt crisis because it has not been able to harness its resources and put it where it needs to go. If we are not doing people-centred and people-driven work, then why are we in these positions?” She noted.
At the end of the conference, the MPs committed themselves through a joint outcome statement, to combat IFFs in Africa in their respective countries. The outcome statement highlights the actions they will undertake in their various governments.
APNIFFT is a flagship program coordinated by TJNA that was first conceptualised in 2015 and eventually launched in 2017. APNIFFT’s operational strategy has focused on national-level legislative interventions to combat the continent’s IFFs and domestic resource mobilisation issues. The network currently boasts of a membership of over 1,500 parliamentarians from over 40 countries.
Watch the participant’s full testimonials below:
- Hon. Mwinyi Abdullah, Chair of APNIFFT Tanzania Caucus
- Hon Oluwole Ole Oke - MP Nigeria House of Representatives
APNIFFT Continental Meetings are held each year in countries across Africa. The continental meetings provide a platform for parliamentarians, TJNA members, and tax justice stakeholders from all over the globe to engage in advocacy-related dialogue and debates on IFFs, tax governance, and domestic resource mobilisation in Africa.
The 2023 continental conference was held under the theme “Africa’s Leadership in Combatting Illicit Financial Flows”.
For more information about APNIFFT, please contact Edwin Birech at ebirech@taxjusticeafrica.net.