Market News

BY Emma Ujah, Abuja Bureau Chief

Nigeria and other African countries must urgently address the $88 billion in annual Illicit Financial Flows (IFFs), the Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, has said.

Speaking at the opening of the 5th Sub-Committee on Tax and IFFs of the African Union’s Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration in Abuja yesterday, Edun warned that these illicit outflows drain resources that could otherwise support critical economic and social spending.

“Illicit Financial Flows alone are estimated to cost the continent over $88 billion annually,” he said. “This is a pivotal moment at which we need to reverse this movement of funds out of Africa. This dialogue comes at a critical time.”

The ministry described the engagement as “a defining moment for Africa’s economic future, where the question is not whether we have to act, but how urgently and boldly we are prepared to do so.” Edun also noted that Africa spends more on debt servicing than it receives in Overseas Development Assistance and Foreign Direct Investment combined.

On achieving rapid, sustained, and inclusive growth, Edun said Africa, home to 1.4 billion people, has tremendous natural resources and economic potential that must benefit the population. “The theme of this gathering speaks to the urgency with which we need to realize that potential through tax and fiscal reforms that support growth and strengthen domestic resource mobilization,” he added.

Edun emphasized that Africa cannot sustainably finance development through debt or aid alone. “Agenda 2063 envisions mobilizing up to 90% of Africa’s development financing needs from domestic resources, supporting African production through African savings.”

He outlined key priorities: strengthening tax systems, maximizing returns from natural resources, enhancing savings and financial inclusion, developing capital markets for enterprises of all sizes, combating illicit financial flows, improving governance, and adopting digitization and technology reforms. He cited the recent launch of Nigeria’s National Single Window project, aimed at easing trade, reducing costs, and increasing government revenue.

In his welcome address, the Executive Chairman of the Nigerian Revenue Service, Dr. Zacch Adedeji, stressed that IFFs remain one of Africa’s most pressing economic threats.

 “Every year, billions of dollars that should support development are diverted through illegal transfers, trade mispricing, tax evasion, and opaque corporate structures,” he said.

Adedeji noted that addressing IFFs requires coordinated national and continental action. “Continental cooperation through platforms such as this Subcommittee is indispensable. Together, we can advance the reforms necessary to safeguard Africa’s resources and build resilient economies for our people.”