From 2000 to 2015, roughly $836 billion in capital left the African continent, according to a recent report by the United Nations Conference on Trade and Development (UNCTAD). This so-called “capital flight” occurs along legal pathways like remittances and other transfers or via illegal means like money laundering or misinvoicing. Capital flight is particularly prolific in Africa, so much so that it has rendered the continent a net creditor to the world. At the same time, money leaving the continent decreases the taxable revenue collected by the home country and makes it more difficult for the private sector to meet its financing needs. Curtailing this capital flight in its many forms could open up resources for spending on human development priorities like education and health.
Figure 1. Capital flight and revenue loss from tax avoidance by African region
Source: UNCTAD (2020), “Tackling Illicit Financial Flows for Sustainable Development in Africa”