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Data from the United Nations Conference on Trade and Development estimates
that African countries lose about $89 billion a year due to illicit cash flow.
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The illicit cash flow consists of tax invasion and deliberate mis-invoicing which
are a result of theft and corruption.
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The export of commodities such as gold, diamond, and platinum is responsible
for almost half of the total figure.
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The lost funds could be used to provide social services such as staffing hospitals,
which have been struggling during the COVID-19 pandemic.
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Economists have argued that despite being aid-dependent, Africa is a net
exporter of capital due to tax havens.
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Tax havens are countries that offer foreign individuals and businesses little or no
tax liability in a politically and economically static environment. They also share
limited or no information with foreign tax authorities.
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Only 45 of 53 African countries provide data to the UN International Trade
Statistics Database.
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Activists say countries should introduce tough regulations on multinational
companies and practices such as profit repatriation.