Experts from the West African Tax Administration Forum (WATAF) and Tax Justice Network Africa (TJNA) have revealed that Africa loses nearly $89 billion annually to illicit financial flows driven by tax evasion, profit shifting, and trade mis-invoicing.
The revelation was made during an interactive session with lawmakers at the ECOWAS Parliament session in Abuja, where discussions centred on tax harmonisation, domestic resource mobilisation, and strategies to curb illicit financial flows across the West Africa sub region.
Africa also faces an estimated domestic resource mobilisation gap of about $194 billion yearly, the experts said, impacting on governments’ ability to fund critical sectors such as road, healthcare, and education infrastructure.
They noted that commercially driven activities account for at least 65 per cent of illicit financial flows from the continent, largely through aggressive tax avoidance, tax evasion, and profit shifting by multinational corporations.
“These harmful tax practices haemorrhage the available resources that can be used for development of the continent,” the experts stated, referencing findings from a 2020 report.
The session formed part of broader efforts to operationalise ECOWAS tax directives aimed at strengthening fiscal coordination among member states. Participants stressed that inconsistent tax systems and weak regional cooperation continue to create loopholes that encourage smuggling, opacity, and revenue leakages.
Speaking during the engagement, Dr. Nita Belemaobgo said stronger regional collaboration and evidence-based policymaking would improve accountability and support tax reform efforts across the region.
She explained that WATAF is supporting ECOWAS initiatives to align tax directives and improve fiscal policy coordination among member states.
Also speaking, Zandile Ndebele urged lawmakers to enact legislation that would ensure African citizens benefit more directly from the continent’s natural resources and tax revenues.
“It’s possible to introduce legislation for domestic beneficiation to gain more resources and revenues, apart from gaining from just taxes,” she said.
Another expert, Solomon Adoga, called for stricter oversight of the mining sector through stronger extractive industry laws and closer scrutiny of tax incentives granted to companies.
“It’s important that Africa protects its taxing rights. We must look at where we are losing revenue as Africans,” Adoga said.
The experts further argued that tackling illicit financial flows does not necessarily require a single regional currency, noting that member states can strengthen cooperation through tax transparency measures, information sharing, and digital reforms while maintaining separate national currencies.
Countries including Nigeria, Ghana, and Ivory Coast were highlighted for advocating fairer allocation of tax rights and stronger regional tax cooperation.
WATAF’s Jonas Igwe emphasised that successful implementation of reforms would depend on political will, institutional coordination, digital modernisation, sustained regional cooperation, and effective monitoring and evaluation.
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