Combatting Illicit Financial Flows: A Solution to Reduce Inequality in Africa

Driven by the economic fallout of the Covid-19 global pandemic, according to World Bank estimates, growth in Sub-Saharan Africa fell to -3.3 percent in 2020
from 2.3 in 2019. Africa, as a continent, is only expected to recover from its worst economic recession in the next fifty years. To do so, the African Development Bank (AfDB) estimates that African governments will need additional gross financing of about USD 154 billion in 2020/21 to respond to the crisis.

Further to this, according to figures from the IMF, employment fell by about 8½ percent in 2020, with more than 32 million people thrown into extreme poverty. Inequality is, therefore, also set to increase as a result of the disproportionate impact that the pandemic has had on vulnerable groups such as women, youth, and low-skilled and informal sector workers. This growing inequality will have significant implications on Africa’s recovery prospects and macroeconomic stability. If unaddressed, the gap created may lead to political and economic instability and raise crisis risk amidst the Covid-19 pandemic.

In light of the above, Alvin Mosioma expressed: “As we consider the impacts of the pandemic, it is important to look at how we can scale up domestic resource mobilisation given the decline in overseas development assistance. Curbing IFFs to shift from a reliance on external financing is a crucial way of doing this. We also need to look at the scale of the social impact of the Covid-19 pandemic on African countries. For this reason, this year we have themed our annual Pan African Conference on Illicit Financial Flows and Taxation ‘Combatting IFFs to Bridge Africa’s Widening Inequality Gap.’ Our hope is to facilitate a conversation on how to ensure an all-inclusive post-Covid-19 era in Africa.’’

This year’s annual PAC was co-organised from 25 to 29 October by the Tax Justice Network Africa and the African Tax Administration Forum alongside 15 co-convenors, namely: Action Aid, the African Union (AU), the Africa Forum for Debt and Development (AFRODAD), Christian Aid, African Women’s Development and Communication Network (FEMNET), Akina Mama Wa Afrika, the Global Alliance for Tax Justice (GATJ), Nawi Afrifem Economics Collective, OXFAM, Pan African Lawyers Union (PALU), United National Conference on Trade and Development (UNCTAD) and United Nations Economic Commission for Africa (UNECA).

For more details, visit the website https://panconfifftax.net/