illicit financial flows from Africa amount to at least 50 billion USD per month,

-Justice Rose Mbah Acha Fomundam, Cameroon’s Minister of Supreme State Audit

Illicit financial flows have been identified as the bane of African economies, accounting for losses equivalent to the total amount received by the continent in terms of public development assistance. It is in a bid to reverse this trend that an international conference on the fight against illicit financial flows using an African approach held in Yaounde from 24 to 26 May. At the end of the conference summoned by the African good financial governance network, it was recommended that an information sharing framework on best practices in the fight against the scourge be established for the benefit of African countries.

Stakeholders also advocated a harmonisation of the legal framework for the prosecution of criminal offences in the area of illicit financial flows.

The forest and wildlife sectors which have been identified as most vulnerable to the scourge, it was further resolved, should be given more attention.

The network called on African Union countries to continue educating citizens on public morals and fight against money laundering through the use of tools developed by ATAF and CRADEC.

In another resolution contained in the final communiqué issued on 28 May, African Union states were urged to designate a head of state who serves as a role-model to champion the fight against illicit financial flows. Ahead of the Yaounde Conference, Justice Rose Mbah Acha Fomundam, Cameroon’s Minister of Supreme State Audit (CONSUPE), spoke on its stakes and expectations. In an interview aired on CRTV’s Cameroon Calling on Sunday 28 May, she said Cameroon lost over 4200 billion FCFA between 2003 and 2012 in illicit financial flows. She began by explaining what illicit financial flows are all about.

 Excerpts:

Illicit financial flow refers to capital that is earned, transferred or used illegally. Illicit cash flows generally originate from three main sources and the sources are commercial activities in which people commit the offence of concealing wealth, evading taxes aggressively and evading custom duties and internal taxes. Offences in commercial activities are estimated at about 65% of the volume of illegal financial flows. There are also criminal activities evaluated at about 30%, that is, making all together, 95% and these criminal activities consist in concealing transactions from the police or tax authorities. Lastly, there is also corruption which is the crime of facilitating and hiding every aspect of illicit financial flows and this is estimated at about 5% making it all togethera 100%.

What is the raison d’etre of this international conference?

There was a publication of a report of a high-level panel on illicit financial flows and this high- level panel was presided over by former South African President, Thabo Mbeki , and this report was like the beginning point of the awareness of the negative effects of illicit financial flows on the continent. According to some surveys especially that of the American NGO called Global Financial Integrity, illicit financial flows from Africa amount to at least 50 billion USD per month, which is a huge amount of money. Through tax evasion, money laundering and other crimes, illicit financial flows is a major problem for the social, economic and political development of our African continent. I can give you statistics from this high-level panel report: Nigeria lost about 157 billion US Dollars between 2003 and 2012. Over the same period, South Africa lost about 122 billion US Dollars, Egypt – 37 billion and Cameroon for her part lost over 7 billion over the same period. In FCFA, this amounts to more than 4200 billion. Needless to emphasise what such a huge sum can achieve at this point in time when we are striving to achieve emergence by 2035. In general terms, several studies have established that the losses resulting from illicit financial flows on our continent are more or less the equivalent of the amount the continent receives as public development assistance, you can imagine that. This means that the fight against illegal financial flows appears to be a major objective of our respective States in the implementation of their development visions. It is therefore in consideration of the magnitude of this phenomenon and its consequences and the perspective of finding solutions to this problem that the network of good financial governance in Africa decided to organise this international conference hosted by my ministerial department CONSUPE in its capacity as the Secretary General of African Organisation of Supreme Audit Institutions. This brings together nearly 200 participants from all over the world. To let you know that the good financial governance network consists of the following organisations: the African Organisation of Public Accounts Committees, the African Organisation of Supreme Audit Institutions, the African Tax Administration Forum, the Collaborative Africa Budget Reform Initiative. In this good financial governance network, we have four partners and this conference is supported by the good financial governance implemented by the German International Cooperation.

A lot of money that you have indicated has been lost by African countries to these illegal financial flows. Madam Minister, what goals does this conference intend to achieve at the end of the day?

The aim of this conference is not only to enable all the participants to develop a common understanding of illicit financial flows but also to raise awareness on the actions undertaken by other stakeholders in tackling such flows. Because you realise that other stakeholders have been trying to tackle these flows. Most specifically, this will develop a shared and more nuanced understanding of the challenges of illegal financial flows including the various pillars and levels. It would reaffirm the commitment of participants to good financial governance, stressing the importance of cooperation and ensuring the sustainability of the network and describe the tools they use to tackle illicit financial flows.

Let’s look at the theme of the conference “Tackling Illicit Financial Flows: An African Approach to a Global Phenomenon”. What is this African approach all about?

When we talk of an African approach, it is because Africa is currently the continent most affected by this scourge. It is necessary for African countries to comprehend this theme and contextualise the measures that may be taken to eradicate this phenomenon. And so it is necessary to ensure that the legislative and regulatory mechanisms are sufficiently adopted to detect and curb the major vectors of these illicit financial flows such as tax fraud, smuggling, also corruption and all forms of economic crimes. It is also important to establish or empower institutions responsible for tackling illegal financial flows. Since implementation is not sufficient, it is also necessary that these entities should be endowed with the appropriate capacities because in many cases we realised that the financial flows occur in situations where there is asymmetric information. In this perspective, therefore, the mechanisms for sharing and coordinating information between the various institutions and administrations are of paramount importance. I would like to mention finally that it is necessary to know how to involve all the components of the society as widely as possible by encouraging especially the participation of citizens. These are the components of the African approach to be debated and enriched during the conference.

You are the Cameroonian Minister in charge of the Supreme State Audit Office and Cameroon itself is highly plagued by this illegal financial flows and those listening to you right now will be asking – What about Cameroon? What measures have been taken by the Government of this country to effectively curb the illegal financial flows?

The Government of Cameroon has taken several measures. This response provided by the State of Cameroon to curb this phenomenon should be assessed in terms of the types of illicit financial flows, which remember, I said come from three main sources. When we talk about illicit financial flows resulting from commercial activities, in particular with regard to direct taxation and basic taxation, the Ministry of Finance has a very well equipped unit to fight against abusive price transfers or smuggling. In addition, in the extractive sector, Cameroon has subscribed and fulfilled all her obligations to enhance transparency in the sector notably through the Extractive Industries Transparency Initiative. And the Ministry of Mines as well has also put in place concrete measures to stabilise the sector. When addressing another aspect of illicit financial flows related to corruption in the public sector, it goes without saying that in the fight against corruption, a host of administrations and structures have been set up such as the Audit Bench of the Supreme Court, the National Agency for Financial Investigation, the National Anti-Corruption Commission and of course the Supreme State Audit Office, that is, the Cameroon Supreme Audit Institutions which I head but also the Special Criminal Court whose effectiveness is well known. When dealing with financial crimes, there are bodies in charge of supervising banks at regional and national levels. At the level of the Ministry of Finance, we have for example, ANIF, which plays a central role and INTERPOL is also a leading player. There are some of the measures and actions taken by the Cameroon Government to combat this phenomenon. Obviously this is surely not enough especially when we know that the phenomenon is cross- border on the one hand and also that it requires the establishment of a multi-stakeholder platform at the national level as well. Consequently, a State alone cannot fight this phenomenon. And with each State, it is indispensable to ensure cooperation and information sharing between the different entities involved in the fight against illicit financial flows. So once again, the relevance of the conference in Yaounde is for a synergy of actions aimed at effectively tackling this problem.

You have said and rightly so that the Government alone cannot tackle this problem. Now, what is the take-home message from that conference?

The participants have achieved a lot. They would realise that in order to resolve this problem, it is essential to engage a concerted action throughout Africa. And when we talk of an African concerted action, what do we mean? This presupposes that we agree on the measures to be taken. Our expectations for all the stakeholders is that we should have a common and shared understanding of the issues and impacts of illicit financial flows on the development of African countries. We adopt a concerted action plan on the activities to be carried out by the members of the network to fight illicit financial flows and everybody will be pleased to see the implementation of the action plan and the establishment of a monitoring mechanism. I am very optimistic, people showed a lot of interest and I said, it is a scourge, a phenomenon that has to be combated not only by the Government, even by the citizens. Everybody alike.

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