Deputy Minister of Finance, Thomas Nyarko Ampem, has warned that illicit financial flows (IFFs) and money laundering are significantly threatening African economies, referring to the situation as a “doom loop.”
This destructive cycle, marked by inadequate regulation, substantial capital flight, and diminishing fiscal capacity, presents a serious risk to the continent’s sustainable development objectives.
During the opening of a three-day Joint Experts’ Meeting in Accra, which was organized by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) in partnership with the Financial Action Task Force (FATF) and the Government of Ghana, Ampem emphasized that the magnitude of illicit financial activities is undermining post-pandemic recovery achievements and redirecting vital resources away from development priorities.
“The increase in insecurity and money laundering has coincided with our economies’ recovery from recent global economic shocks and a growing youthful population,” he stated. “This has led to a doom loop where economic growth is compromised due to disruptions in economic activities, loss of substantial national revenue through illicit flows and smuggling, inadequate public service delivery, rising youth discontent that fuels illegal migration, and the emergence of a new generation of extremist recruits.”
Ampem underscored the urgent need for the region to break and reverse this cycle before the economic and social repercussions become irreversible, cautioning that “the cost of inaction will be immeasurable.”
He pointed out that IFFs, which encompass tax evasion, trade mispricing, and smuggling, rob African governments of billions of dollars each year, diminishing their capacity to finance essential services such as healthcare, education, and infrastructure. The United Nations Economic Commission for Africa (UNECA) estimates that the continent loses approximately US$88 billion annually due to illegal financial transfers.
The Deputy Minister advocated for enhanced regional cooperation to address these financial crimes. “We must fortify our institutions, eliminate regulatory deficiencies, and promote real-time intelligence sharing among nations in the region,” he asserted. He highlighted the necessity for unified oversight frameworks, strong financial intelligence systems, and more effective enforcement mechanisms to counter the surge of cross-border illicit transactions.
The meeting convened policymakers, regulators, and financial specialists from throughout West Africa to formulate actionable strategies aimed at improving coordination among national financial intelligence units, revising anti-money laundering legislation, and strengthening the oversight of high-risk sectors such as real estate, extractives, and digital finance.
