A report authored by Professor Léonce Ndikuma, an economist at the University of Massachusetts Amherst, has exposed Ghana’s staggering loss of approximately $50 billion to capital flight over the past five decades.
The comprehensive study delves into the complex interplay of domestic and global factors driving capital flight in selected African nations, including Ghana, Cameroon, and Zambia, all of which boast significant natural resources.
The report highlights that the $50 billion loss is chiefly attributed to the misreporting of trade values, a practice predominantly observed in the gold mining and cocoa industries.
In the gold sector, discrepancies were evident between the recorded export values by Ghana and the actual value of gold received by the destination countries.
An illustrative example provided in the report pointed out the incongruity, as Ghana’s exports of gold to South Africa in 2020 to 2021 amounted to approximately $15 billion, while questions surrounding the reconciliation of these figures loom large.
In the cocoa industry, losses due to capital flight were relatively modest, primarily due to the Ghanaian government’s significant stake in cocoa trade. However, the report highlights the stark contrast in control within the cocoa value chain, with Ghana retaining a 4.0% share as a producer, while a substantial 79% of the value chain is overseen by the processing and distribution sector.
The report also sheds light on a cumulative private wealth of approximately $56 billion, with 110 Ghanaian multimillionaires boasting equity in excess of $10 million. Consequently, the report recommends that Ghanaian business owners focus their investments on enhancing the value chain within these sectors.
Beyond Ghana, the report underscores a profound issue affecting the entire African continent, revealing an astounding capital flight of about $2 trillion from 1971 to 2018.
Titled “Capital Flight from Africa and Perverse Global Connections: Analysis and Possible Solutions,” the report highlights the imperative need for closer scrutiny and measures to curtail capital flight in order to promote sustainable economic development across the African continent.