Africa loses $89bn annually to illicit financial flows – Tax Experts warn

Economic specialists from the West African Tax Administration Forum (WATAF) and the Tax Justice Network Africa (TJNA) have revealed that African nations lose an estimated $89 billion every year to Illicit Financial Flows (IFFs).

During an interactive session with ECOWAS parliamentarians at the 2026 First Ordinary Session in Abuja, the experts explained that these massive losses are driven by harmful tax practices that severely undermine continental economies.

The session, titled “Operationalising ECOWAS Tax Directives for Domestic Resource Mobilisation and Regional Tax Harmonisation,” highlighted the urgent need for structural fiscal reform to address a persistent domestic resource mobilisation gap of approximately $194 billion annually.

The experts identified the primary drivers of revenue leakage as tax evasion, tax avoidance, and trade misinvoicing, noting that roughly 65 percent of these illicit flows are commercially driven.

These practices effectively hemorrhage the essential resources required for infrastructure, healthcare, and general development across the continent.

WATAF representatives argued that advancing tax harmonization within the ECOWAS sub-region is the fiscal backbone of regional integration, as the absence of a unified framework leaves member states vulnerable to revenue loss through loopholes and profit shifting by multinational corporations.

Dr. Nita Belemaobgo, Research Manager at WATAF, emphasized that the organization’s goal is to facilitate ECOWAS’ transition toward directives that align fiscal policies across all member states.

She noted that regional cooperation and evidence-based tools are vital to enhancing accountability and reform outcomes.

Similarly, Dr. Zandile Ndebele of the TJNA urged regional lawmakers to look beyond standard taxation by introducing legislation for domestic beneficiation.

This approach ensures that local citizens gain more direct value from natural resources and domestic resource management.

Adding to the call for action, Solomon Adoga of TJNA encouraged parliamentarians to strengthen extractive legislation and scrutinize new mining agreements through rigorous cost-benefit analyses.

He stressed that Africa must protect its taxing rights to reduce reliance on external nations.

The forum concluded that while a single currency is not a prerequisite for fighting IFFs, success depends on strong political commitment, digital modernization, and institutional coordination.

The experts tasked the ECOWAS Parliament with an indispensable oversight role, asserting that the engagement is ultimately about sovereignty, fairness, and the economic future of West Africa.