The African Union, in an August 2025 report, estimates that illicit financial flows (IFFs) cost countries in Africa $88 billion per year. IFFs are illicit or illegal funds derived from criminal activities and/or illegal tax practices that are moved or transferred across countries, including international trade manipulations (the most common), tax evasion, smuggling, government corruption, and money laundering. Nearly half of these losses come from the ‘extractive sector,’ mostly mining. IFFs are fundamental drivers of economic injustice, and enormously undermine national efforts to improve health, either via social determinants of health (education, jobs, nutrition, water, sanitation) or via health services. These losses are especially devastating given the new world order of reduced financial development assistance from the global north (estimated 17% drop)’ especially from the USA.
There are some hopeful signs: IFFs have been actively discussed among the 15,000 attendees at the July 2025 Fourth International Conference on Financing for Development (FfD4). Spain and Brazil, announced a joint initiative to promote the global taxation of the superrich, while eight nations — France, Kenya, Barbados, Spain, Somalia, Benin, Sierra Leone, and Antigua and Barbuda — launched a program to explore levies on premium aviation (think: private jets and business-class). African nations have also promoted more inclusivity transparency in the deliberations of the U.N. tax convention and have created a new, U.N. hosted borrower’s club to help indebted nations confront their ever-mounting debt crisis. 61 LMIC countries currently spend more than 10% of their national budgets on debt servicing. Debt for development swaps are also being promoted by Italy and Spain. Nevertheless, African countries have still not built a strong consensus on IFFs, despite plenty of rhetoric about eradicating their magnitude and depth.
Check out this article in Devex on the FfD4, the conference outcome document, the November 2022 UN study on IFFs, and the Africa Union report here.
Image: IMF