Former South African president Thabo Mbeki says an estimated US$50 billion is exported out of the African continent illegally every year. “This money is exported illegally instead of being invested in the continent,” he said, apparently without citing a source.
Mbeki was speaking at the launch of a United Nations Economic Commission for Africa (UNECA) high level panel in Johannesburg. The panel, chaired by Mbeki, would investigate illicit and financial flows of finance out of the continent, the South African Press Association reports.
Mbeki said the loss needed to be addressed before it undermined the prospect of Africa’s development. “Almost US$25 billion comes in to the continent. That means it loses twice the capital it receives in financial assistance,” he said. “The panel will study the flow of money and understand how it is done. The African continent will expect the panel to provide practical measures to stop the flow.”
He said it would take a year for the panel to complete its investigation. “This is a matter of vital importance to the continent. In the end [the investigation] should result in action taken by the continent and individual countries,” he said.
“As a panel, we have no punitive measures. The panel will make proposals to those with punitive power and explain how it [the flow of money] is done.” He said the panel would provide sufficient information about the different methods of the outflow. This would include over-invoicing and under-pricing of exports and money laundering strategies.