MWENDE: Illicit financial outflows hinder progress - Daily Nation

Illicit financial outflows hinder progress

Tuesday September 11 2018


The African Union estimates that 25 per cent of the gross domestic product of African countries is lost to corruption yearly. PHOTO | FILE| AFP 

More by this Author

The African Union estimates that 25 per cent of the gross domestic product of African countries is lost to corruption yearly, with the United Nations Economic Commission for Africa data showing illicit financial outflows from the continent could be as high as $50 billion per year.

Arguably, such massive resource outflows continue to deprive Africa and its citizens of funds for progressive and gender-responsive services.

Meanwhile, the African Development Bank estimates that illicit financial outflows have drained Africa in excess of $1 trillion since 1980.

Research shows that these constitute 5.5 per cent of GDP in Africa and are larger than incoming foreign direct investment and vastly larger than the total of official development assistance flowing into these countries.


Conservative estimates have shown that, without illicit financial outflows from the continent, GDP would have been at least 16 per cent higher.

Kenya loses Sh608 billion every year to graft. To finance its highest-spending plan ever, the country will borrow Sh282 billion from foreign investors to finance part of its 2018/2019 Budget of Sh3 trillion. If such massive resource outflows were curbed, there would be no need for foreign borrowing.

The two National Youth Service scandals saw Sh11.6 billion lost to corrupt dealings.

The programme meant to offer vocational training to youth, was seen as a means to mitigate the high unemployment among the young people.

However, with such pilferage, joblessness continues to rise to dizzying heights with a recent survey by the Kenya National Bureau of Statistics (KNBS) putting the figure at about seven million.


Illicit financial outflows have a negative impact on Africa’s governance and development agenda as they render governments incapable of funding programmes. They also considerably weaken the countries’ ability to mobilise resources generated to fund development plans for the structural transformation of their economies.

If not halted, corruption will largely compromise Kenya’s ‘Big Four’ agenda, especially service delivery in the health sector, with women being disproportionately affected since the majority of them depend on public health services and sexual and reproductive health and rights services, in particular.

Gender-based violence will continue to thrive as a result of rampant corruption as it further exacerbates predominant inequalities between genders.


Rife corruption also weakens the criminal justice system, which pays little or no regard to formulation and enforcement of gender-friendly legislation.

Corrupt police officers have been reported to harass women in the informal sector and exhort illegal payment from these women, stifling their economic growth.

Corruption is also known to generate peace and security concerns such as the 2007/2008 post-election violence.

The war on corruption has to go hand in hand with the fight against illicit financial outflows if Kenya, and Africa by extension, is to achieve the transformation of citizens’ lives.

 Ms Mwende is a communications consultant. [email protected] Twitter: @enyvonne