The African Union estimates that Africa loses no less than US$ 50billion to illicit financial flows annually. Africa’s geographical positioning coupled with its porous borders makes it an ideal transit point for the perpetration of drug trafficking, human trafficking and illicit wildlife trade.

Governance lapses resulting from corruption make it even more difficult to secure its borders, which in turn facilitates the crimes, whose proceeds flow into the global financial system.

Africa’s development priorities often seem to be sidestepped by corruption, money laundering, tax evasion, illegal market activities and financing of terrorism, all of which fuel the engine of illicit finance.

Were this not the case, then poverty alleviation, infrastructure development, accessible healthcare and education, rural electrification and other key development pillars would have been realized and the economic struggle facing African nations considerably extinguished.

In fact, an OECD report asserts that combating illicit financial flows could potentially contribute more resources to support sustainable development than a doubling of global aid. This would also bring improved governance, stability, and help to reduce crime and violence

Whist the UN and other multilateral organisations work tirelessly towards achieving sustainable development goals, illicit finance continues to puncture those efforts and erode any gains made towards realizing suitable development for Africa.

Illicit financial flows are funded by underlying criminal activities like corruption, drug trafficking, money laundering, tax evasion, human trafficking, illegal wildlife trade and the financing of terrorism.

Funds generated from these illicit activities are then processed through various channels in the financial system and eventually benefit the perpetrators whose aim is to profit from these crime-driven endeavors.

The illegal transfer or unlawful utilization of these funds is broadly termed as illicit financial flows.

Results of ongoing research by the OECD suggest combating illicit financial flows is an effective and efficient way to prevent and detect crime, and can be more effective than combating the underlying crimes themselves.

Criminal activity is entrenched in environments where crime pays and criminals can easily access the proceeds of illicit activity.

Fighting organized crime today calls for concerted efforts not only by law enforcement and related government agencies but also with tax authorities, anti-money laundering watch-dogs, anti-corruption authorities, asset recovery agencies and the judiciary.

Illicit financial flows are multidimensional in nature; this, therefore, necessitates coherence in the national approach towards combating the scourge.

The key institutions including tax authorities and anti-money laundering watchdogs have tailored policies to meet their specific organizational objectives which do not necessarily align towards a collective effort in combating illicit finance.

Whereas tailored policies guide institutions in executing their mandate, coordinated policy-making enables all actors to collaboratively optimize the limited resources available as a united front to a common adversary.

It is bewildering though, that illicit finance thrives in a continent where countries have developed legal and institutional frameworks around tax practices, corruption and economic crimes, anti-money laundering (AML) and countering the financing of terrorism(CFT).

One may argue that perhaps the adequacy of the institutional frameworks is wanting, or that AML and CFT measures are poorly implemented winding up with counterproductive results. Whatever the case, the fact remains that African economies are reeling from the far-reaching effects of illicit finance.

Lack of policy alignment, and the silo-approach also occasions data challenges. The main actors charged with fighting illicit financial flows do not have a global view of data; this makes it difficult to monitor illicit financial flows and limits understanding of the scale and prevalence of illicit financing nationally, regionally and internationally.

This further inhibits robust timely initiatives and decision-making for effective controls and measures.

According to UNCAD, there is no globally-accepted methodology to monitor illicit financial flows. Developing nations time and again rely on global partners from the developed world to shape and guide their strategy and policy on managing organized crime.

The transnational aspects of illicit finance further compound this measurement methodology gap thereby inhibiting the effective combat of illicit finance as countries struggle with monitoring and addressing emerging trends.

Criminals tend to be agile running their operations with stealth and speed meaning that twice the effort is required to counter and frustrate illicit finance maneuvers. Success will be far-flung if Africa does not bring its best soldiers to this war on illicit finance.

The best soldiers are those who are trained and armed with the requisite tools to see them to the finish line. The investment must be made to develop expertise within the regulatory and law enforcement fraternity for the advancement of robust and effective solutions to combat illicit financial flows

The importance of intra-governmental and international cooperation cannot be overstated. Combating illicit finance requires a fully integrated approach that is subject to the collective contribution of all actors.

Benchmarking against international best practice and global standards would help to refocus priorities and resources to ensure that synergistic benefits are derived from the collective effort.

To ensure Africa does not become the weak link in the global drive to combat illicit finance, it must be central to the multi-lateral decision-making process. This will inform sound policy interventions because a chain is as strong as its weakest link.

Grace Mburu is an Executive Director at Flywheel Advisory