Government asked to end illicit financial flows
A crusade to end illicit financial flows (IFFs) has been rolled out with the warning to the Ugandan and other African governments to end the criminal activities.
The campaign dubbed “stop the bleeding” is a continent-wide initiative to stop IFFs from Africa.
Uganda is one of the African countries that is affected by illicit trade which occurs in several forms including; overpricing, transfer pricing, tax evasion, money laundering, corruption and false declarations, all denying the country the much needed revenues that could save it from donor dependency.
Illicit financial flows refer to money illegally earned, transferred or used. It is also known as the flow of money that has broken laws. These activities are propagated by complex networks that cross multiple jurisdictions, draining foreign exchange reserves, reducing tax collection, canceling investment inflows and worsening poverty.
Currently, Africa is estimated to be losing more than $50 billion (about Shs162 trillion) a year in Illicit Financial Flows, an amount of money the member of the Pan African MPs network on IFFs and tax, Ms Kanyisile Litchfiled Tshabalala, said can transform health facilities across the continent.
Civil societies in Uganda, among them SEATINI, Action Aid and CSBAG estimated that Uganda alone loses an average of $509 million (more than Shs1.5 trillion) in illicit outflows every year.
This amount is an equivalent of 60 years budget for the National Bureau of Standards (UNBS), a government institution mandated to, among others, get rid of substandard and potentially life-threatening counterfeit products flooding the country.
Speaking at the launch of Stop the Bleeding campaign last week in Nairobi, Ms Tshabalala, said African leaders need to be more accountable and also wake up to stop IFFs because they explain why African countries, among them Uganda, is not transforming as fast as she should compared to the Asian tigers.
Representing US-Africa network, Ms Reggy Anyango, said IFFs have the potential to support terrorism which is a global problem now.
Ms Nelly Busingye, the programme officer SEATINI-Uganda said the entire population should appreciate the dangers that IFFs pose to their livelihoods.
Effect of illicit financial flows. The effects of these losses on IFFs from mean loss of jobs, income, decent education, health facilities and other basic infrastructure critical to transforming the economy. These resources, if retained, could be invested in productive sectors of economies to lift Africa’s growing population from poverty.