The United Nations Economic Commission for Africa (ECA) lamented in a statement published on Thursday the heavy toll of illicit financial flows on African finances.
The ECA highlighted that Africa’s vast resources, ranging from gold and diamonds to fertile lands and solar energy, have too often enriched a privileged minority, both local and foreign, while the majority of Africans are left behind. This statement on illicit financial flows follows a series of discussions focused on practical solutions to transform Africa’s wealth into prosperity for its people during the African Economic Conference held in Gaborone, Botswana.
According to the Commission, illicit financial flows occur while approximately 282 million people in Africa remain undernourished, and more than half of African nations face unsustainable debt levels, with external debt surpassing $1 trillion.
Said Adejumobi, Director of Strategic Planning at the ECA, pointed out that poverty, inequality, and underdevelopment persist even as billions flow out of the region. He emphasized the paradox of abundance in Africa, where immense natural wealth exists alongside poverty, hunger, and unsustainable debt.
“Debt remains another major obstacle. High interest rates and unproductive borrowing cycles trap many African countries in dependency,” stated Sonia Essobmadje, Head of the Innovative Finance and Capital Markets Section at the ECA, calling for better debt management and the development of local capital markets, as reported by the African News Agency.
“Sometimes, we borrow just to pay off previous loans, which is unsustainable,” said Essobmadje, stressing the need for “economic diversification, fiscal discipline, stronger public debt management strategies, and, most importantly, the creation of domestic capital markets.”
Strengthening tax systems and leveraging tools such as green and blue bonds could unlock billions for public investment. The African Continental Free Trade Area (AfCFTA) was described as a critical element for reducing reliance on raw material exports and fostering local industries across the continent.
