Economic development in Africa: Tackling illicit financial flows for sustainable development in Africa

Action taken by the Trade and Development Board 2020
Economic development in Africa: Tackling illicit financial flows for sustainable development in Africa
Agreed Conclusions 560 (LXVII)
1205th plenary meeting
2 Oct 2020

The Trade and Development Board

  1. Welcomes the UNCTAD secretariat’s Economic Development in Africa Report 2020: Economic Development in Africa – Tackling Illicit Financial Flows for Sustainable Development in Africa;
  2. Takes note of the main message of the report, and reiterates the importance and shared responsibility of combating illicit financial flows, as well as reaffirms the need to strengthen good practices on the identification, tracing and recovery of stolen assets, in line with chapter 5 of the United Nations Convention Against Corruption, including by helping to scale up African anti-money-laundering initiatives;
  3. Notes with deep concern the significant value and impact of illicit financial flows, and of the activities that underlie their occurrence, on developing countries, in particular for Africa, and on economic, social and sustainable development, and notes the alarming estimate of $88.6 billion included in the report;
  4. Acknowledges that illicit financial flows, in particular those caused by tax evasion, corruption and transnational organized crime, reduce the availability of valuable resources for development, critical for post-coronavirus disease of 2019 (COVID-19) recovery, for achievement of the Sustainable Development Goals and Agenda 2063 in African countries;
  5. Notes that the economic and trade-related disruptions stemming from COVID-19 further affirms the need to tackle illicit financial flows, as they undermine countries’ abilities to respond to global shocks by limiting fiscal space and the foreign currency available to address continuing development challenges;
  6. Notes the findings of the report that underline the specific vulnerability of women and children to the detrimental effects of illicit financial flows and of the activities that underlie their occurrence;
  7. Acknowledges that resource-rich developing countries, in particular in Africa, are especially vulnerable to illicit financial flows and that there is a need to create greater transparency along commodity value chains, and thus encourages UNCTAD to support African countries through identification and sharing of best practices and by strengthening the regulatory frameworks to minimize illicit financial flows;
  8. Recognizes that there must be an integrated and coordinated approach to tackling illicit financial flows and the activities that underlie their occurrence, even if different sources of illicit financial flows require separate analysis and policy response, focusing on their determinants and impacts, and that it is also important to consider multi-stakeholder financial integrity, external factors and the centrality of good institutions and governance;
  9. Recognizes also that, at the domestic level, addressing illicit financial flows, including trade misinvoicing in African countries, will also require better data, including trade data exchange and streamlining of reporting standards, as well as linking of customs and business registries, and recognizes further the potential value of the UNCTAD Automated System for Customs Data and its new module for mineral production and export, the Mineral Output Statistical Evaluation System, and in addition encourages UNCTAD to continue to assist African countries in customs and excise system modernization in order to ensure better and more transparent data exchange;
  10. Notes the important role of the African Union Commission in further driving the continental agenda on fighting illicit financial flows;
  11. Highlights the value of the ongoing multilateral efforts in key issues of base erosion, profit sharing and taxation, and underscores the importance of focusing on effective implementation of existing instruments, such as the important work of the Financial Action Task Force and its regional bodies;
  12. Invites Africa’s development partners to continue supporting the continent, in the spirit of shared responsibility, in addressing the challenges of illicit financial flows, and contribute to realizing Africa’s development goals;
  13. Requests UNCTAD, within its mandate and available resources, to continue research and analysis on Africa’s development issues, and encourage UNCTAD to strengthen efforts to reprioritize the work on illicit financial flows.