By Emma Ujah, Abuja Bureau Chief
Abuja – Nigeria and other African countries must act urgently to curb the continent’s $88 billion annual Illicit Financial Flows (IFFs), the Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, has said.
Speaking at the opening of the 5th Sub-Committee on Tax and IFFs of the African Union’s Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning, and Integration in Abuja, Edun stressed that these outflows represent resources that could otherwise be invested in vital social and economic sectors.
“Illicit financial flows alone are estimated to cost Africa more than $88 billion every year,” Edun said. “This is a pivotal moment at which we need to reverse this movement of funds out of Africa. This dialogue comes at a critical time.”
Edun noted that Africa also pays out more in debt servicing than it receives in Overseas Development Assistance (ODA) and Foreign Direct Investment (FDI) combined. He emphasized that the continent’s 1.4 billion people and abundant natural resources must be leveraged for the benefit of citizens.
“The theme of this gathering speaks directly to the urgency with which we need to address and realize Africa’s potential, building the continent we want through tax and fiscal policy reforms that support growth and strengthen domestic resource mobilization,” he said.
Domestic Resource Mobilization
Edun stressed that Africa’s development must be financed domestically rather than relying on debt or aid.
“There is a continental ambition under Agenda 2063 to mobilize up to 90% of Africa’s development financing needs from domestic resources. This includes strengthening tax systems, maximizing returns from natural resources, enhancing domestic savings, developing capital markets, combating illicit financial flows, and improving governance through digitization and technology.”
He highlighted Nigeria’s National Single Window project launched last week as a key reform aimed at trade facilitation, reducing costs, and increasing government revenue, noting that such initiatives improve the investment climate.
NRS Perspective
In his welcome address, the Executive Chairman of the Nigerian Revenue Service (NRS), Dr. Zacch Adedeji, called IFFs “one of the most pressing threats to Africa’s economic progress.” He noted that billions of dollars are lost annually through illegal financial transfers, trade mispricing, tax evasion, and opaque corporate structures, resulting in missed opportunities for hospitals, schools, infrastructure, and investments.
Adedeji urged coordinated action at national and continental levels, stressing that IFFs exploit weaknesses in international regulatory systems. “Continental cooperation through platforms such as this Sub-Committee is indispensable,” he said.
He concluded: “The future prosperity of Africa will depend on our ability to build strong fiscal institutions, protect financial resources, and mobilize revenues domestically. Together, through collaboration and shared commitment, we can advance the reforms necessary to safeguard Africa’s resources and build resilient economies for our people.”
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