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Risks of illicit financial flows in Africa: Understanding vulnerabilities to corrupt money flows in nine countries

Illicit financial flows are a major development challenge for African countries, and cause a major drain on capital and revenues. They are also a major obstacle to the development of effective and just fiscal systems and reduce resources available to governments to provide public services such as education, healthcare and infrastructure. Illicit financial flows also increase inequality by allowing the richest to hide their wealth. Finally, they foster grand corruption by providing the means to secure and enjoy the proceeds of corruption.

Illicit financial flows, especially those related to corruption, are notoriously difficult to measure. To aid regional and global efforts for combatting them, we have identified key factors that make African countries susceptible to illicit financial flows linked to corruption.

Given the inherent challenges in calculating the volume of illicit financial flows, especially those emanating from corruption, we have aimed to identify some of the key risk factors which make African countries vulnerable to outflows of illicit financial flows. We have focused on nine countries: the Republic of the Congo (Congo), Côte d'Ivoire, Ethiopia, Kenya, Mauritius, Morocco, Nigeria, South Africa and Zambia.

This report explores what is known about the types, sources and destinations of illicit financial flows in these countries, and identifies some of the governance and structural drivers which exacerbate the risks of illicit financial flows. It also explores efforts to combat illicit financial flows in the target countries, focusing on key elements of the anti-money laundering regime.