The President of the African Export and Import Bank (Afreximbank), Prof. Okey Oramah, has anchored the success of the African Continental Free Trade Area (AfCFTA) on the ability of the continent to stem the tide of corruption and illicit financial flows.
Oramah, made this point when he presented the keynote address at the virtual 2020 Africa Business Ethics Conference with the theme: “Tackling Corruption to Reduce Poverty and Unemployment in Africa: A Necessity for Building Resilience to Global Risks,” which was organised by the Lagos Chamber of Commerce and Industry (LCCI) in partnership with the Centre for International Private Enterprise (CIPE).
Oramah, who was represented by the Director of Compliance, Afreximbank, Mr. Idris Diop, said: “In the continental free trade areas, Africa is arming itself with tool for future prosperity. However, the success of the AfCFTA is obviously partly dependent on the continent’s ability to combat corruption and illicit capital flow to ensure availability of resources and infrastructure.”
He added that in its 2020 report on economic development in Africa, the United Nations Conference on Trade and Development (UNCTD) explained that stopping illicit capital flight, “will almost cut by an half the annual financing gap of $200 billion that the African continent face as it strives to attain the Sustainability Development Goals.
“It is estimated that every year 3.7 per cent of Africa’s GDP leaves the continent as illicit capital flow. Most of these illicit flows stem from the proceeds of corruption.
“Between 2000 and 2015 the total illicit capital flight from Africa amounted to $836 billion compared to Africa’s total external debts stock of $707 billion 2015.
“A one point increase in corruption decreases the growth rate of the GDP between 0.75 per cent and 0.9 per cent per year. And per capita income growth rate between 0.39 and 0.41 percent respectively.”
According to the President of the LCCI, Mrs. Toki Mabogunje, who delivered the welcome address, the conference was meant to promote conversations that would provide solutions in addressing corruption as a strategic approach in reducing the high incidence of poverty and unemployment across Africa.
Mabogunje said: “Corruption is one of the biggest developmental challenges facing African economies. African economies cannot bear the increasing cost of corruption, which impedes socioeconomic development and minimises the capacity of African governments to lift their citizens out of poverty and create opportunities for the low-income segment of the society.
“According to the Transparency International, 43 percent of Africans are living in poverty while over $50 billion worth of stolen assets flow out of Africa every year.”