The African continent is facing a significant financial drain, with Ghana being one of the hardest hit.
According to the Tax Justice Network Africa (TJNA), the country loses approximately $1.4 billion annually due to illicit financial flows. This loss is attributed to tax evasion, tax exemptions, and systemic tax inefficiencies.
Francis Kairu, Strategic Programmes Director at TJNA, emphasized the urgency of addressing these issues during the African Parliamentary Network on Illicit Financial Flows and Taxation Summit in Ghana.
He noted that multinational corporations operating in Ghana contribute significantly to the problem, with the country granting tax exemptions and tax holidays frequently.
“The issue of illicit financial flow is a major challenge for our generation,” Kairu stressed. “Ghana is one of the countries that loses the most due to its natural resources and large population that is being taxed.”
The UNCTAD report reveals that Africa loses nearly $89 billion annually due to illicit financial flows, with under-declaration of export values for commodities like gold, diamonds, and platinum accounting for almost half of the total financial loss.
Experts accuse companies engaged in these practices of evading taxes and royalties, exacerbating the continent’s financial drain.
The report identifies Africa as a ‘net creditor to the world’, indicating a substantial outflow of capital from the continent.
Kairu stressed that governments must acknowledge the severity of the issue and take action to address it.
The magnitude of the problem underscores the need for urgent reform to prevent further revenue loss and promote economic growth.
By addressing illicit financial flows and promoting tax justice, Ghana and Africa as a whole can secure vital revenue and drive economic development.
The urgency of the situation demands swift and decisive action from governments and stakeholders to stem the financial drain and create a more equitable economic landscape.
