Peace, Justice and Strong Institutions

This chapter assesses the readiness of national regional and international institutions in Africa to combat trade-based illicit financial flows (IFFs) particularly trade mis-invoicing. Trade mis-invoicing is a form of tax evasion (covered broadly in chapter 2) that moves money illicitly across borders by falsifying the stated price volume or value of imports or exports on invoices or customs declarations submitted by importers and exporters respectively to customs agencies and port authorities. IFFs including trade mis-invoicing harm the governance of African economies.

At the seventh joint annual meetings of the United Nations Economic Commission for Africa (ECA); the African Ministers of Finance Planning and Economic Development and the African Union Conference of Ministers of Economy and Finance the ministers pledged to take the necessary coordinated action nationally regionally and continentally to strengthen our economic governance institutions and machinery focusing especially on tax administration contract negotiations and trade-related financial leakages and to engage with the international community in order to highlight our concerns regarding illicit transfers including the question of tax havens.

This chapter assesses whether African government corruption-fighting measures and institutional architecture are adequate to curtail IFFs. It adopts a conception of corruption covering a broad range of actions actors motivations and machinations involved in internationalizing corruption. The chapter proposes a conceptual framework that relates corruption to IFFs reviews the effectiveness of existing legal instruments and institutional frameworks for fighting corruption and curbing IFFs and presents recommendations for strengthening these measures.

This Economic Governance Report building on earlier work by the Mbeki Panel and others have assessed measures African governments can take by themselves or by drawing on international cooperation opportunities to combat illicit financial outflows. It has reviewed the readiness of African governance institutions to do so including their legislation and regulatory frameworks and their activities and coordination capacities. In each of the illicit financial flow (IFF) channels and motivations addressed by the report—tax evasion and tax planning for avoidance purposes trade pricing manipulation the banking system and money laundering strategies as well as corruption-related IFFs—institutional activities and capacities are described and examples from the continent are given. Based on these examinations the report stresses the need for African countries to double up: to build strong effective and accountable institutions for curbing IFFs while standing behind those institutions with political leadership at the highest levels. This concluding chapter highlights a selection of the report’s recommendations.

This premier Economic Governance Report (EGR I) assesses the institutional architecture pledged by African governments for blocking illicit financial flows (IFFs) and recommends initiatives to strengthen it. The report’s findings indicate that IFFs continue to thrive though African countries have tried to establish dedicated institutional frameworks for combatting them in the main channels of trade investments and financial flows. The IFFs include corruption money laundering trade mis-invoicing to move money illicitly and tax fraud (including corporate tax dodging). The report encourages more inter-agency collaboration coordinated reporting the removal of duplicated and competing mandates and consistent political support for institutional reforms to combat IFFs.

To commemorate in 2022 the fortieth anniversary of the adoption and opening for signature of the 1982 United Nations Convention on the Law of the Sea this publication reflects on the Convention’s successful contribution to the promotion of the peaceful uses of the seas and oceans the equitable and efficient utilization of their resources the conservation of their living resources and the study protection and preservation of the marine environment. The publication focuses on the historical achievements of the Convention.

To commemorate in 2022 the fortieth anniversary of the adoption and opening for signature of the 1982 United Nations Convention on the Law of the Sea this publication reflects on the Convention’s successful contribution to the promotion of the peaceful uses of the seas and oceans the equitable and efficient utilization of their resources the conservation of their living resources and the study protection and preservation of the marine environment. The publication focuses on the historical achievements of the Convention.

The analysis in this report is based on both quantitative and qualitative sources. The quantitative data come from the ongoing data collection system in West Africa of the Mixed Migration Centre which provides primary data on migration flows by surveying refugees and migrants as well as smugglers and facilitators along frequently used migration routes and in major hubs for migration. The migrant smuggling business is multifaceted even at the individual level. The vast majority of smugglers surveyed reported having multiple responsibilities in the smuggling process with an overall average of four responsibilities each. Many of them also work in multiple countries: almost half of the smugglers surveyed operate in more than one country and one in five do so in four or more countries. Some refugees and migrants are subjected to exploitation and abuse during their migration journey through the Central Sahel whether or not that journey is undertaken with smugglers. However smugglers are less frequently cited as being perpetrators of exploitation and abuse than border officials security forces armed groups and criminal gangs.