Comparing the Illicit Financial Flows in Some African Countries: Implications for Policy
AbstractDue to the deleterious effect of the illicit transfer of funds on Africa economies the paper determines and compares the volume of illicit funds which should have been used for development but otherwise channeled into private benefits in seven African countries during 2005-2015. Using the World Bank Residual Model, we found that illicit financial flows are being experienced in all the sample countries otherwise unabated. In quantum terms, illicit transfers of funds are more in upper-middle-income countries while and it was highest in low- income countries as a proportion of the countryâ€™s GDP. The study concluded that relative to aggregate income low-income countries engage more in illicit financial transfers that the other income groups whereas in quantum terms it was substantial in upper-middleincome group. We recommend that all income groups should improve on regulatory controls in order cub illicit transfers in Africa, more importantly, the low-income group.Â Â
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