African countries lose $90 billion annually to illicit financial flows – AFDB

Kevin Chika Urama, Chief Economist and Vice President, Economic Governance and Knowledge at the African Development Bank on Thursday raised concerns that African countries are losing a staggering $90 billion each year due to illicit financial flows and called for a collective action to rectify the situation.

He said this in Abuja during the graduation ceremony of the first cohort of the Public Finance Management Academy for Africa (PFMA).

The PFMA, approved by the Board of Directors of the Bank Group in June 2022, is a comprehensive initiative aimed at providing structured capacity development in Public Financial Management (PFM) to African countries.

Urama noted that highlighted strategic importance of PFM lies in enhancing economic governance and knowledge management to promote wealth creation and prudent management of public finances.

He also noted that the academy as
a key implementation activity of the Bank Group’s programs, and focuses on addressing the challenges in the PFM cycle.

Urama outlined various thematic areas covered during the 18-month program, including domestic revenue mobilization, macro-fiscal modeling, sustainable debt management, and efforts to curb illicit financial flows.

In his address, Urama stressed the urgency of tackling issues within the PFM ecosystems, emphasizing that “Africa, despite its natural resource richness, often faces financial challenges due to mismanagement”.

Read also: AfDB wants intensified efforts at curbing illicit financial flow in Africa

The first cohort of the PFMA, consisting of 145 public officials from 45 African countries, commenced the program in July 2022. Of these, 52 officials from 26 countries successfully completed the program, earning certification as PFM experts in their respective nations.

Urama acknowledged the collaboration of institutional partners, including the International Monetary Fund, World Bank, and other key organizations, for their commitment to the success of the programme.

Urama further called on the graduates to be torchbearers in promoting transparency and accountability in their respective countries. He urged them to champion Africa’s efforts to efficiently manage resources and enhance productivity.

Tope Fasua, the Special Adviser to the President on Economic Affairs in the Office of the Vice President acknowledged the comprehensive curriculum of the PFMA, covering crucial aspects of public financial and debt management.

He praised the academy’s efforts in responding to the urgent need for enhanced knowledge and capabilities among public officials working in these critical sectors across African nations.

The Special Adviser commended the graduating class, emphasizing the role their newly acquired skills will play in achieving the African Development Bank’s High 5’s Agenda, the UN Sustainable Development Goals, and the AU Agenda 2063.

Expressing his support for the innovative PFMA, Fasua highlighted its role as a platform for aggregating knowledge from relevant institutions and making it accessible to public financial management officials.

He encouraged the expansion of such initiatives to other areas of capacity development beyond public financial management.

He highlighted Nigeria’s advanced legal and institutional frameworks for public finance and debt management, offering valuable insights to other African nations.

Fasua also affirmed Nigerian government continued support for such initiatives and expressed hope for strengthened capacity in public financial and debt management across the continent.

The valedictory ceremony for the African Development Bank’s Public Finance Management in Africa Executive Training Series witnessed the graduation of Isaac Kurasha from the National Treasury of South Africa and others

In his Valedictory Speech, Isaac Kurasha, one of the PFMA graduates reflected on the 18-months journey that began on March 2, 2022 and highlighted the rich experience and knowledge gained throughout the program.

“The training enriched my understanding of the public financial management (PFM) cycle, providing insights into various components”, he stated.

He emphasized how assignments and interactions with colleagues from different divisions broadened his perspective, creating a deeper appreciation for the structure and intricacies of the National Treasury.

Read also: Nigeria seeks institutional framework to address illicit financial flows in West Africa

Kurasha acknowledged the transformative impact of the program on his approach to public finance, citing increased due diligence and an enhanced ability to influence resource allocation.

He emphasized the importance of graduates becoming advocates for change and implementation of learned principles in their respective jurisdictions.

Kurasha commended the AfDB for the initiative and expressed optimism about the positive contributions graduates would make to their countries and societies.

He highlighted the need for continued focus on gender mainstreaming, climate change, and financing, encouraging the African Development Institute to explore these areas for future capacitation.