In what is described as loss that continues to undermine the Africa’s economic progress and deepen its debt burden, the African Development Bank (AfDB) President, Akinwumi Adesina, has disclosed that the continent is losing about $1.6 billion daily and more than $580 billion every year through corruption and illicit capital outflows.
Adesina, who made this disclosure in a Bloomberg interview, said the losses are so severe that they outweigh the continent’s ability to finance infrastructure and development, even as Africa’s total debt burden nears $2 trillion.
“It doesn’t matter how much water you pour into a bucket if the bucket is leaking. If you’re able to reduce the leakages to illicit capital, also corruption and all of these things, Africa will be able to keep a lot of these resources and meet the amount of infrastructure it needs,” Adesina said.
The AfDB boss estimates that Africa loses about $1.6 billion every single day to what it calls “financial leakages,
Thism according to him, includes $90 billion annually in illicit financial flows, $275 billion lost through profit-shifting by multinational corporations, and $148 billion siphoned off due to corruption.
Adesina added that while access to concessional financing and debt restructuring are important, curbing corruption and illicit outflows remains the single most crucial step to safeguarding Africa’s resources and reducing its reliance on debt.
These losses come at a time when the continent is grappling with an annual infrastructure financing gap of up to $170 billion, a shortfall that must be addressed if Africa is to unlock economic growth and create jobs for its youthful population. Instead of channelling resources into such projects, many African governments are overwhelmed by soaring debt-service costs.
A joint study by the Boston University Global Development Policy Center and the Institute for Economic Justice recently found that debt servicing in Africa has climbed to its highest level since the early 2000s debt crisis.
Shockingly, more than half of African governments now spend more on interest payments than on public healthcare.
