Africa continues to suffer massive economic losses through Illicit Financial Flows (IFFs), estimated at over $88.6 billion annually, according to a landmark coordinated audit launched in Nairobi. The audit, conducted by 12 Supreme Audit Institutions (SAIs) across the continent, is the first of its kind and aims to strengthen collaboration and legal frameworks to address the crisis.
The findings were released alongside the Compendium of Best Practices on the Coordinated Audit of Illicit Financial Flows, a report hailed by the African Organization of Supreme Audit Institutions (AFROSAI) as a significant milestone.
AFROSAI Secretary General Mbah Acha Fomundam said the coordinated audit was conceived as early as 2016 to address the continent-wide challenge of IFFs.“We realized that illicit financial flow was a big problem—not just for audit institutions but for Africa as a whole,” she said. “Today, we have a regional report that supports governments and institutions in this fight.”The audit was spearheaded by Kenya’s Auditor General Nancy Gathungu and examined various sectors including extractives, banking, transfer pricing, and taxation loopholes.
The audit’s key finding was a severe lack of coordination—both within individual countries and across borders.“Many institutions are working in isolation. One agency may have critical information but isn’t sharing it with others who can act,” Gathungu said.
She added that while IFFs are often viewed as funds exiting Africa, there is growing evidence of intra-continental flows, with illicit funds often moving across borders before being laundered and re-entering the continent disguised as legitimate investments.
The report calls on African nations to enforce existing anti-corruption, anti-money laundering, and anti-terrorism financing laws more effectively. Kenya, despite having strong legislation, still struggles with enforcement.“The weakest link is the lack of sanctions—not just for those moving money out, but also for the jurisdictions receiving these funds,” Gathungu stated.
Cryptocurrencies were also flagged as a rising threat, with calls for new legal and technological frameworks to track digital assets.Gathungu warned that the actual IFF figure may now exceed $88.6 billion, citing increased complexity in concealment strategies.
She urged African governments to collaborate, enhance national systems, and hold offenders accountable to stop the financial haemorrhage stalling Africa’s development.
