African Finance Ministers and Central Bank Governors met on Wednesday to discuss policies required to stop the excessive illegal flow of capital from Africa to tax havens around the world.

Financial experts said Africa lost 1.7 trillion dollars in capital flight between 1970 and 2010 through tax cheats.

According to the experts it stage-managed financial returns by multinational oil firms and funds spent on foreign universities and healthcare.

Prof. Leonce Ndikumana of the University of Massachusetts in the U.S., said the beneficiaries of Africa’s massive capital flight were mostly tax havens and regulators of the global financial system.

“In real terms, 39 African countries lost 1.3 trillion dollars but, together with interest earned over this period, the combined loss comes to 1.7 trillion dollars,” Prof. Ndikumana told The Tide source.

He said the huge amount of money lost by African countries through the illicit transactions had severe economic effects on the continent.

“These amounts reduce private investment, loss of tax revenue to finance public investment and they undermine governance by sending a negative message to the citizens,” the economics professor said.

Nairobi-based think-tank, the African Economic Research Consortium, convened the meeting to give the top finance sector policymakers an overview of the state of capital flight and explore ways to stop it.

“We have no time to lose. A sense of urgency is needed so as to make sure this time around; Africa is not waiting for better times.

“We have to build the better times now,” Carlos Lopes, Executive Secretary of the UN Economic Commission for Africa, said in opening remarks.

Lopes said measures, including coordination across boundaries within Africa and worldwide, were required to stop the outflow of cash from Africa.

He pointed out that most of the funds escaped through transactions conducted by a third country under the cover of financial secrecy before landing into a tax haven, beyond the reach of local financial regulators.

“Individual responses to capital flight is not adequate, not even the most developed countries with full fledge security systems,” the UN official said.

L-R: Lagos State Deputy Governor, Mrs Adejoke Orelope-Adefulire, Gov. Ibikunle Amosun of Ogun State, Gov. Babatunde Fashola of Lagos State, Former President of Georgia, Mr Mikheil Saakashvill, Chief Executive Officer, Standard Chartered Bank, Mrs Bola Adesola and Lagos State Commissioner for Budget and Economic Planning, Mr Ben Akabueze at the 7th Lagos Economic Summit Tagged ‘ehingbeti 2014’ in Lagos last Tuesday. Photo: NAN