The Ghana Statistical Service (GSS) has initiated a process to measure how much the country has lost through Illicit Financial Flows (IFFs) in the export and import trade sector over the last 21 years (2000 -2021).
With support from the Ministry of Finance and the Ghana Revenue Authority (GRA), the exercise would estimate the losses and the loopholes to enable the country to take specific action to block them. Meanwhile, the assessment is being done in accordance with guidelines developed by the United Nations Conference on Trade and Development (UNCTAD) and the UN Economic Commission for Africa (UNECA).
As part of the process, a five-day workshop is being opened in Accra and also online to engage stakeholders on the exercise. Meanwhile a comprehensive report on IFF is expected to be released by the end of June, this year, 2022.
A recent report by a high-level panel on IFFs estimated Africa’s loss in IFFs to be more than $1 trillion over the last 50 years- a sum nearly equivalent to all the official development assistance the continent received during the same period. Additionally, UNCTAD’s Economic Development in Africa Report 2020 also indicated that Africa could gain $89 billion annually by curbing IFFs while noting that the continent’s resource-rich countries are particularly more prone to IFFs.
Delivering the keynote address at the opening of the workshop, the Deputy Government Statistician, Dr Faustina Ainguah, iterated that the first draft of the report would be released by the end of first half of the year. She noted that the assessment would boost the government’s Ghana Beyond Aid agenda by helping the country block activities that drain the country’s resources given that various reports had established that IFF hinder the capacity of developing countries to address their developmental needs.
The Deputy Government Statistician averred that the workshop would involve presentations, discussion and the adoption of best practices and procedures geared towards generating the estimates. She affirmed the service’s commitment to the exercise, promising to disseminate a comprehensive report which would help guide national development.
Conduits For IFFs
The Technical Adviser to the GRA Commissioner-General, Dominic Naab, cited cost padding and misinterpretation of Ghana’s laws by multinationals as some of the conduits for IFFs.
In the petroleum and mining sectors, Mr Dominic Naab said, “The multinationals increase their cost of operation, limiting the profit from which the country would get its share”.
The Technical Adviser indicated that past efforts did not yield the desired results and that “The country needs to work on capacity to be able to nip in the bud some of these practices. We need to review our laws on taxation to strengthen them and clear the grey areas.”
A representative of UNCTAD/UNECA, Allan Mukungu, disclosed that the exercise is being carried out in various countries in Africa as part of efforts to help nations raise additional revenues. He expressed optimism that the results would guide policy decisions noting that the IFFs losses are real.
IFFs involve illegal movements of money or capital from one country to another that are illegally earned, transferred, and/or utilized to, among other things, evade tax.
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