FG seeks tougher action on $88bn annual financial leakages

• Says tax reforms already yielding results

From Adanna Nnamani, Abuja

The Federal Government has called for stronger enforcement and deeper cross-border collaboration to curb illicit financial flows draining Africa of an estimated $88 billion annually.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made the call on Tuesday in Abuja at the opening of the 5th Session of the African Union Sub-Committee on Tax and Illicit Financial Flows under the Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration.

Edun said the scale of financial leakages in the continent continues to undermine development, stressing that resources lost to illicit flows should ordinarily be channelled into critical sectors such as infrastructure, healthcare, education and job creation.

He noted that Africa must intensify efforts to block revenue leakages through stronger enforcement mechanisms and enhanced cooperation among countries:

“Illicit financial flows cost the continent nearly $88 billion annually, resources that should otherwise be invested in infrastructure, education, healthcare, and productive sectors of our economies.”

The minister emphasised that tackling illicit financial flows has become more urgent in the face of shifting global economic realities, including changes in trade relationships, development financing, and geopolitical tensions. He added that Africa can no longer rely heavily on external sources such as debt, aid and foreign investment to finance development, describing them as uncertain and influenced by external dynamics.

Edun also noted that recent measures such as tax system reforms, removal of fuel subsidies, exchange rate unification and the launch of a National Single Window are already improving transparency, boosting revenue and reducing leakages.

He further stressed the importance of strong institutions, digital infrastructure and regional cooperation in sustaining fiscal reforms across the continent.The Minister urged participants to use the platform to deepen collaboration and develop practical solutions to safeguard Africa’s resources.

In his remarks, Executive Chairman of the Nigeria Revenue Service (NRS) , Zacch Adedeji, said illicit financial flows remain one of the most pressing threats to Africa’s economic progress.

Adedeji noted that billions of dollars are lost annually through illegal financial transfers, tax evasion, trade mispricing and other illicit activities, depriving governments of resources needed for development.

He called for coordinated action at both national and continental levels, noting that illicit financial flows are transnational in nature and require collective responses.

“These outflows represent lost opportunities, lost hospitals, schools, infrastructure and investments in the future of our people,” Adedeji said.

Also speaking, Executive Secretary of the African Tax Administration Forum, Mary Baine, said Africa must strengthen its tax systems and protect its tax base amid evolving global tax rules.

She warned that changes in global tax frameworks could weaken Africa’s ability to retain taxing rights over profits generated within the continent if not carefully managed.

The meeting, which brought together policymakers, tax administrators, and development partners, is expected to produce recommendations aimed at strengthening Africa’s fiscal systems and improving domestic resource mobilisation.