Abuja – Over $1 trillion was illegally siphoned out of
Africa in the last 40 years.
Carlos Lopez, the Executive Secretary of the UN Economic Commission for
Africa, disclosed this at the opening of a two-day Senior Policy Seminar
on Capital Flight and Tax Havens in sub-Saharan Africa.
The seminar was organised in collaboration with African Economic Research
Consortium with the theme "Capital Flight from Africa''.
Lopez, therefore, called for measures to reverse the trend of illegal
financial flows away from Africa.
He said Africa's fiscal policy space had been compromised by the
shortage of resources as capital flight was hidden from authorities,
limiting Africa's growth.
He said that said researchers had indicated that the siphoned
capital would have expanded the continent’s growth by 60 percent with a per
capita growth of 15 percent higher than what is currently obtained.
According to him, capital flight has impacted negatively on Africa's
saving ratios by denying local investors access to financial resources that
could otherwise have been used be used to generate employment.
"It is therefore critical that Africa addresses the issues of
capital flight, not only to ensure that money made in Africa stays on the
continent, but contributes to financing Africa’s transformation agenda.
He said that for the fight to reduce the flight of funds and
check direct losses of capital from the continent to be
won, there was an urgent need to address the factors responsible
for capital flight such as real exchange rate over-valuation.
The ECA boss also called for measures to promote African-owned
private equity funds and other financial services to encourage capital to
remain on the continent.
He observed that the continent's private equity industry
valued at about $30 billion was thriving, with some 38 private
equity funds invested in infrastructure including toll roads, dams and
According to him, such investments outperformed listed stocks in
the last four years.
Lopez said African bond issues had flourished in international market,
through relatively new and limited countries including Nigeria, Ethiopia, South
Africa and Zambia.
He said that in such countries, infrastructure bonds were
over-subscribed by about 15 times.
"To make Africa's bonds perform better, there is the need to ensure
superior returns, low borrowing costs, appropriate fiscal incentives and credit
guarantee facilities to protect against default.”-
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