Ghana loses $2.9 billion yearly through agreements – economist reveals

Ghana’s finance minister, Ken Ofori-Atta[/caption] It has emerged that Ghana loses up to 10 per cent of its gross domestic product to illicit financial inflows and outflows through bilateral, multilateral and other agreements the country signs with other countries and institutions. “This represents 2.4 billion dollars inflows and 500 million dollars of outflows, a total of 2.9 billion dollars annually,” reveals Joseph Spanjers, an Economist with Global Financial Integrity. Speaking on 3FM’s “Late Edition” show, Mr Spanjers described the figures as conservative, noting the extent of loss of money to illicit flows on the continent was disturbing. The Global Financial Integrity (GFI) is a non-profit, Washington DC-based research and advisory organization, which produces high-caliber analyses of illicit financial flows. It also advises governments of developing countries on effective policy solutions, and promotes pragmatic transparency measures in the international financial system as a means to global development and security. Mr Spanjers was commenting on the release of a report titled “Illicit Financial Flows to and from Developing Countries: 2005-2014.” Per the December 2015 report from Global Financial Integrity, developing and emerging economies lost a total of US$7.8 trillion in illicit financial flows from 2004 through 2013. He said the picture painted is not a positive one, noting the amount of money lost could have gone into providing key facilities, especially in the health and educational sectors. Dr Spanjers said combined, these outflows and inflows are estimated to account for between 14.1 and 24.0 per cent of developing country trade, on average. The report said an average of 87 per cent of illicit financial outflows were captured as ‘lost’ over the 2005-2014 period due to the fraudulent misinvoicing of trade. Illicit financial outflows from Sub-Saharan Africa ranged from 5.3 percent to 9.9 per cent of total trade in 2014, a ratio higher than any other geographic region studied. He noted that total illicit financial flows (outflows plus inflows) grew at an average rate of between 8.5 percent and 10.1 percent a year over the ten-year period on the continent. “In 2014, outflows are estimated to have ranged between $620 billion and $970 billion, while inflows ranged between $1.4 trillion and $2.5 trillion,” the report said Mr Spanjers called for a practice where a full disclosure of companies that bid for government contracts. On trade, he said it was important to have goods come in at the right prices and should not be 50 per cent more or lower as it will have public revenue implications. He urged trade transparency and for tax information sharing that will make sure that the right prices are paid for at all times. By Gideon Sackitey|3FM|3news.com|Ghana]]>