The bulk of approximately $1.5 trillion generated annually through foreign direct investments in Africa is illicitly transferred back to developed countries, a new report claims.
Foreign direct investments in Africa have generated some $1.5 trillion every year since the early 1960s but most of it is “directed back to the developed world” in a practice that “perpetuates Africa’s economic dependence on other regions,” says the report prepared for the African Union’s High-Level Panel on Illicit Financial Flows from Africa.
The report further notes that the annual average amount of money lost to illicit financial flows has increased in past years, from an average $9 billion between 1970 and 1999 to an average $50 billion per year between 2000 and 2008.
“Ultimately, Illicit financial flows worsens the socio-economic fabric of poor communities and leads to shorter life expectancy due to limited spending in providing social services such as health care, the loss of US$ 10 for every US$ 1 received in aid is both economically and financially detrimental to the continent,” the report says, according to the U.N. Economic Commission for Africa.
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