Corruption, smuggling, tax evasion, under-invoicing: the amount of losses is equivalent to the sum of official development assistance and foreign direct investment, according to new UN calculations.

The haemorrhage of illicit capital from Africa is undermining the ability of many governments to provide basic services to their people. This loss would be at least 76 billion euros (88.6 billion dollars) per year according to the last evaluation retained in the 2020 report on the economic development of Africa, published Monday, September 28 by the United Nations Conference. on development (Unctad). A sum that is close to the annual total of official development assistance and foreign direct investment received by the continent between 2013 and 2015.

"These flows, which deprive public treasuries of the resources needed to finance development, are considerable and are constantly growing", deplore the authors of the report, specifying that they also represent half of the 200 billion dollars per year deemed necessary. for Africa to be able to achieve the Sustainable Development Goals (SDGs) by 2030. The previous estimate, published in 2015 by the United Nations Economic Commission for Africa, put forward the figure of 50 billion dollars on average per year over the period 2000-2008.

These capital outflows follow different channels. Corruption, smuggling, tax evasion are part of it, but it is by far the manipulation of invoicing in the extractive industries sector that most generously fuels this delinquency. Cnuced estimates that the make-up of these commercial flows makes it possible to subtract 40 billion dollars per year from the eyes of customs administrations. The operation consists of companies – often multinationals – who indulge in under-invoicing the amount of exports in order to collect the profit from the transaction in another account opened in a third country. The over-invoicing of imports makes it possible, for its part, to bring out income acquired in a hidden way.

The gold sector in the lead
"The lower the weight of a mineral and its higher value, the more it concentrates" criminal activities, details the report, showing that the gold sector is at the origin of more than two thirds of diversions, at based on figures obtained by comparing, according to a so-called “mirror” method, the data declared by the exporting country on the one hand and the importing country on the other. The diamond trade generates 12% of fraud and that of platinum 6%. In volume, more than half of illicit capital flows come from contracts made in Nigeria, South Africa and Egypt, even if these figures must be taken with caution given the fragility of the statistical data.

Moreover, only 43 countries on the continent regularly publish data with the United Nations international trade database. Junior Davis, director of the Africa office of Cnuced and coordinator of the report, regrets that “this method makes it difficult to apprehend the illicit flows linked to oil exploitation. Crude exports that pass through the pipelines are not registered with customs authorities and once refined, the oil loses all trace of its origins, making it very difficult to trace it in international statistics. Our estimate is therefore certainly quite lower than it would have been if the missing oil and gas figures could have been integrated into this analysis,” he points out.

The Cnuced report is an opportunity to recall that the presence of this underground economy in a State often goes hand in hand with a lack of resources devoted to basic services. “Budgets are on average 25% lower in health and 58% lower in education in countries where illicit capital flows are significant,” point out the authors. Moreover, in these countries, the methods of exploitation of mining resources are also among the “dirtiest” for the environment.

The issue of increased control of this mafia economy is therefore not only financial. Faced with this organized crime, initiatives to control these movements of capital have so far had little impact, notes the report which, in conclusion, insists on the need to strengthen the collection of customs and tax data to better identify sources of diversion.