"Africa Loses $40 Billion Annually to Illicit Financial Flows in Extractive Sector"

" Africa Loses $40 Billion Annually to Illicit Financial Flows in Extractive Sector \r\n\r\nThe United Nations Economic Commission for Africa (ECA) has raised the alarm over Africa\u2019s annual loss of an estimated $40 billion to illicit financial flows (IFFs) from the extractive sector, funds that could otherwise be channeled into infrastructure, education, healthcare, and job creation.\r\n\r\nDeputy Executive Secretary of the ECA, Antonio Pedro, disclosed this during a High-Level Policy Dialogue in New York, which marked the close of the 2025 African Dialogue Series (ADS).\r\n\r\nThemed \u201c Justice for Africans and People of African Descent Through Reparations, \u201d the series brought global attention to Africa\u2019s calls for economic justice and reparatory development.\r\n\r\n Overdependence on raw materials \r\n\r\nPedro warned that these financial leakages are not merely accounting discrepancies but a structural symptom of Africa\u2019s overdependence on raw material exports, a colonial-era economic model that continues to limit value creation and deepen inequality.\r\n\r\n \u201cIFFs in the extractive sector are a symptom of a deeper structural problem\u2014Africa\u2019s overdependence on raw material exports. This amounts to exporting jobs and limiting industrial development,\u201d \u00a0Pedro said.\r\n \r\n \t He noted that Africa needs to generate at least 20 million jobs annually to accommodate its fast-growing youth population, and curbing IFFs is critical to meeting that target. \r\n \t The loss of capital through tax evasion, transfer mispricing, and opaque contracts deprives the continent of much-needed revenue and undermines efforts toward sustainable growth. \r\n \t Pedro linked the challenge of IFFs to the broader conversation on reparatory justice, arguing that addressing these systemic outflows must be a central pillar of Africa\u2019s development strategy. \r\n \t He commended the African Dialogue Series for offering a platform for unified African engagement, urging that Africa \u201cmust speak with one voice\u201d to push its priorities on the global stage. \r\n \r\n Operationalising the policy framework\u00a0 \r\n\r\nTo reverse the trend, Pedro called for the urgent operationalisation of existing policy frameworks such as the African Mining Vision and the African Green Minerals Strategy, both designed to promote value addition, local content, industrialisation, and community development in the mining and energy sectors.\r\n\r\n \u201cWhat is needed now is to operationalise these frameworks and turn political commitments into action,\u201d \u00a0he said.\r\n\r\nHe further highlighted the need for policy coherence across key sectors\u2014mining, trade, energy, industrialisation, and infrastructure\u2014and called for reforms in global financial systems to reduce vulnerabilities exploited by IFF enablers.\r\n\r\nPedro stressed that a collective effort is required across governments, mining companies, local communities, and financial institutions to close perception gaps and ensure transparency and accountability in resource governance.\r\n\r\n \u201cAs we move forward, prioritising sustainable development and tackling the systems that sustain IFFs, alongside reparatory measures, is critical to achieving justice for Africa,\u201d \u00a0he concluded.\r\n\r\nThe African Dialogue Series is an annual initiative hosted by the UN Office of the Special Adviser on Africa (OSAA), in collaboration with the African Union and other UN agencies, to elevate the continent\u2019s development agenda and foster global solidarity with African and diaspora communities."

"Africa Loses $40 Billion Annually to Illicit Financial Flows in Extractive Sector"

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