TNC…where curious minds can access wholesome news commentary

TNC…where curious minds can access wholesome news commentary


Africa: The Fight Against Money Laundering – An African Perspective!

Despite estimates from organizations such as the IMF and the United Nations Office on Drugs and Crime (UNODC), it is impossible to know exactly how much money is “legalised” every year.

They put the sum between 2 and 5 per cent of the global GDP; if so, around $2.5tn was laundered in 2014, more than the GDP of the Russian Federation, India, Italy or Brazil.

The tragedy for the world is that these vast sums come from some of the most insidious crimes: the trafficking of women and children, drug smuggling, illegal arms sales and the funding of terrorist organizations. This is big business and it presents all of us in the frontier and emerging markets in Africa, in particular, with a difficult reality. Illegal transactions or financial discrepancies can take place anywhere in the world.

There is, however, a lower risk of detection in African countries because our compliance programmes are often not as robust as they should be and in some cases simply ineffective. If African nations and the region as a whole are serious about helping in the global fight against terror, drugs and human trafficking then we need to reassess what we are doing. We need to acknowledge that in many places significant progress has been made – but that there is still more that needs to be done. And if we are to make progress quickly, we need to work collectively as well as within our own borders as the region looks to realize its full economic potential.

One of the most important steps for all African countries is to engage fully with global financial compliance institutions such as the Financial Action Task Force (FATF). It has developed international standards for legal, regulatory and operational measures, in addition to pushing for the political will required to achieve national legislative and regulatory reforms. African countries need to work with these organizations and – most importantly – implement the policies and procedures they recommend to streamline their financial mechanisms It is, however, the legal adoption of policies and the creation of laws that govern financial transactions that are so crucial in this journey.