Binging the Billions Back: How Africa and Europe Can End Illicit Capital Flight
(2012) Global Series No 37
84 Pages Posted: 30 Apr 2021
Date Written: April 21, 2012
Every year between US$ 850-1000 billion disappears without a trace from developing countries, ending up in tax havens or rich countries3. The main part of this is driven by multinational companies seeking to evade tax where they operate, and has been called “the ugliest chapter in global economic affairs since slavery” 4. The sum that leaves developing countries each year as unreported financial outflows, referred to as illicit capital flight, amounts to ten times the annual global aid flows, and twice the debt service developing countries pay each year. For each dollar that goes to the developing world in aid, almost US$10 come back to developed countries through illicit means. This money, if properly registered and taxed in the country of origin, could of course contribute to considerable development and make a major difference in the fight to combat poverty.
Keywords: Capital Flight, Illicit Financial Flows, Africa, Kenya, Tanzania, South Africa
JEL Classification: G3
Suggested Citation: Suggested Citation