Can Sub-Sahaean Africa Be The Next Global Economic Powerhouse? by Colin Cram

Fraud and corruption are badly damaging the economies of many African countries. A recent report by the African Union http://www.theguardian.com/global-development/2015/feb/02/africa-tax-avoidance-money-laundering-illicit-financial-flows ,  publicised by Thabo Mbeki, http://www.theguardian.com/global-development/2015/feb/02/africa-tax-avoidance-money-laundering-illicit-financial-flows, alleged that illicit financial outflows were costing $50 billion every year as governments and multinational companies engage in fraudulent schemes aimed at avoiding tax payments to some of the world’s poorest countries.

According to Transparency International, this figure may be an understatement. Procurement fraud alone will be somewhere in the region of $30-50 billion, when one takes into account the size of the sub-Saharan economy – which is about $1.6trillion a year.  Add into the equation that there is also a high level of corruption in many countries, and you can understand why Transparency International believes thet the $50 Billion figure is just the tip of the iceberg.

Despite its huge scale, the outflow of funds will often be the least of the problems…