Africa loses nearly $89bn a year in illicit financial flows such as tax evasion, a United Nations study has showed.

The figure is higher than what the continent receives in Official development assistance.

A report released by the United Nations Conference on Trade and Development on Monday calls Africa a ‘net creditor to the world’.

The export of commodities such as gold, diamond and platinum is responsible for almost half of the total figure lost every year. Companies under declare the value of exports, cheating on payments of taxes and royalties.

Understating a commodity’s true value deprives developing countries of foreign exchange and tax revenue, said the agency.

Economists have argued that despite being aid dependent, Africa is actually a net exporter of capital due to tax dodging and people hiding cash in tax havens.

The lost funds could be used to provide social services such as staffing hospitals which have been strained by the coronavirus pandemic.

Activists say countries should introduce tough regulations on multinational companies and on practices such as profit repatriation.

Source: Africa News