This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.
Please provide an overview on the prevalence and manifestations of illicit financial flows (IFFs) in/out of Ethiopia and their impact on development, as well as current strategies by the government of Ethiopia and development partners to address IFFs.
Over the past decade, the concept of illicit financial flows (IFFs) has gained traction within the international development community. According to some calculations, illicit outflows from Africa, for example, surpass the levels of development aid received by the continent, which deprives countries from resources needed to fund public services, improve infrastructure and fuel economic growth. There is, however, a lack of clarity regarding the definition of IFFs, which makes them difficult to delineate, measure and study. This U4 Helpdesk Answer explores the issue of IFFs in Ethiopia.
- IFFs in Ethiopia: the problem in perspective
- Legal and institutional framework against IFFs in Ethiopia
- Challenges ahead in the fight against IFFs in Ethiopia
- According to GFI’s estimations, between 2005 and 2014, an estimated average of US$1,259 million to US$3,153 million dollars left Ethiopia as IFFs every year.
- IFFs in Ethiopia have led to an average loss in GDP growth of 2.2% per year.
- Data from Global Financial Integrity shows that between 55 and 80% of the illicit financial outflows leaving Ethiopia originate through trade mis-invoicing.
- Ethiopia’s response to curb IFFs has been largely based on a legal approach, which has proven difficult to implement in practice.
Roberto Martinez B. Kukutschka, Transparency International, [email protected]
Paul Banoba, Transparency International