The African Union (AU) has raised alarm on August 31 over illicit financial flows draining nearly $88 billion from the continent every year. These transactions, which escape taxation and oversight, include money laundering, corruption, terrorist financing, and capital flight. The AU report warns that the losses severely undermine public investment in essential services such as education and healthcare. Despite measures such as specialised financial intelligence units and tax authorities at the national level, the report stresses that current efforts are insufficient to stem the tide.
The AU highlights that illicit practices often thrive through false invoicing, tax evasion, and price manipulation in sectors like mining. It has established regional cooperation platforms and working groups aimed at recovering stolen assets and curbing undeclared exports. However, weak legal frameworks, poor enforcement, and limited coordination between countries continue to hinder progress. Added pressures from conflicts, climate change, and global tensions, including the war in Ukraine, have further strained state budgets and contributed to a 76% surge in illicit financial flows over the past decade.