The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, on Tuesday said Africa loses an estimated $88 billion annually to illicit financial flows (IFFs), warning that the losses undermine investments in critical sectors.

Edun made this known in Abuja at the opening ceremony of the 5th Session of the Sub-Committee on Tax and Illicit Financial Flows under the Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration (STC–FMAEPI).

He described the development as a major setback to the continent’s growth, noting that such funds could otherwise be invested in infrastructure, education, healthcare, and other productive sectors.

“We gather at a defining moment for Africa’s economic future, where the question is no longer whether reforms are necessary, but how urgently and boldly we are prepared to act,” he said.

According to him, Africa, with a population of over 1.4 billion people and vast natural resources, must improve how it mobilises and manages its resources to achieve sustainable prosperity.

Edun stressed that the continent cannot rely solely on debt, foreign aid, or external investments to finance development, noting that such sources remain uncertain.

“The foundation of sustainable development must be domestic resource mobilisation. Our continental ambition is to mobilise up to 90 per cent of development financing needs from domestic resources, as envisioned under Agenda 2063,” he stated.

He noted that while fiscal reform is not new, global shifts in trade, development finance, and cooperation frameworks now make it more urgent for African countries to depend on internal capacities.

The minister identified key challenges hindering progress, including tax evasion, weak institutions, limited economic diversification, and continued dependence on external financing.

He said Agenda 2063 provides a clear pathway for reforms, including strengthening tax systems, improving governance, enhancing financial inclusion, and combating illicit financial flows.

Highlighting Nigeria’s efforts, Edun said the administration of Bola Ahmed Tinubu has implemented sweeping tax reforms since May 2023 to simplify the tax system, expand the tax base, and improve compliance.

He added that measures such as the removal of fuel subsidies, exchange rate unification, and the introduction of a National Single Window system have improved fiscal transparency and reduced leakages.

“These reforms are already yielding results, with improvements in non-oil revenues, stronger fiscal buffers, and increased investor confidence,” he said.

Also speaking, the Executive Chairman of the Nigeria Revenue Service, Zacch Adedeji, said illicit financial flows remain one of the greatest threats to Africa’s development.

He noted that African countries are grappling with widening financing gaps while facing losses from tax evasion, aggressive tax avoidance, and illegal financial transfers.

Adedeji said revenue authorities across the continent are modernising systems, expanding tax bases, and deploying digital tools to improve efficiency and transparency.

“Illicit financial flows represent lost hospitals, schools, infrastructure, and investments in our future,” he said.

He emphasised the need for stronger continental collaboration, noting that illicit flows are transnational and exploit regulatory gaps across jurisdictions.

According to him, building strong fiscal institutions and protecting financial resources will be critical to Africa’s long-term economic prosperity.

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