Africa loses $40 billion yearly to illicit {financial} flows in extractive sector — UN ECA
The United Nations {Economic} Fee for Africa (ECA) has raised the alarm over Africa’s annual lack of an estimated $40 billion to illicit {financial} flows (IFFs) from the extractive sector, funds that would in any other case be channeled into infrastructure, schooling, healthcare, and job creation.
Deputy Government Secretary of the ECA, Antonio Pedro, disclosed this throughout a Excessive-Degree Coverage Dialogue in New York, which marked the shut of the 2025 African Dialogue Collection (ADS).
Themed “Justice for Africans and Individuals of African Descent By means of Reparations,” the sequence introduced international consideration to Africa’s requires {economic} justice and reparatory growth.
Overdependence on uncooked supplies
Pedro warned that these {financial} leakages will not be merely accounting discrepancies however a structural symptom of Africa’s overdependence on uncooked materials exports, a colonial-era {economic} mannequin that continues to restrict worth creation and deepen inequality.
“IFFs within the extractive sector are a symptom of a deeper structural downside—Africa’s overdependence on uncooked materials exports. This quantities to exporting jobs and limiting industrial growth,” Pedro mentioned.
- He famous that Africa must generate no less than 20 million jobs yearly to accommodate its fast-growing youth inhabitants, and curbing IFFs is vital to assembly that concentrate on.
- The lack of capital via tax evasion, switch mispricing, and opaque contracts deprives the continent of much-needed income and undermines efforts towards sustainable development.
- Pedro linked the problem of IFFs to the broader dialog on reparatory justice, arguing that addressing these systemic outflows have to be a central pillar of Africa’s growth technique.
- He recommended the African Dialogue Collection for providing a platform for unified African engagement, urging that Africa “should communicate with one voice” to push its priorities on the worldwide stage.
Operationalising the coverage framework
To reverse the development, Pedro known as for the pressing operationalisation of present coverage frameworks such because the African Mining Imaginative and prescient and the African Inexperienced Minerals Technique, each designed to advertise worth addition, native content material, industrialisation, and group growth within the mining and power sectors.
“What is required now could be to operationalise these frameworks and switch political commitments into motion,” he mentioned.
He additional highlighted the necessity for coverage coherence throughout key sectors—mining, commerce, power, industrialisation, and infrastructure—and known as for reforms in international {financial} programs to scale back vulnerabilities exploited by IFF enablers.
Pedro confused {that a} collective effort is required throughout governments, mining corporations, native communities, and {financial} establishments to shut notion gaps and guarantee transparency and accountability in useful resource governance.
“As we transfer ahead, prioritising sustainable growth and tackling the programs that maintain IFFs, alongside reparatory measures, is vital to attaining justice for Africa,” he concluded.
The African Dialogue Collection is an annual initiative hosted by the UN Workplace of the Particular Adviser on Africa (OSAA), in collaboration with the African Union and different UN companies, to raise the continent’s growth agenda and foster international solidarity with African and diaspora communities.
