Kenya’s war against illicit financial flows which bleed the country an estimated Sh80 billion annually has received a shot in the arm after global economic leaders converging in Lima, Peru vowed to help stop the vice.
The World Bank and International Monetary Fund committed Friday to assist countries like Kenya build capabilities in developing domestic policies and practices that reduce such flows.
“We are concerned about the adverse impacts of illicit financial flows (IFFs) and harmful tax avoidances, especially by multinational firms, on the sustainability of public finances, particularly in African countries,” said a joint communiqué on international monetary affairs and development released by an intergovernmental group at the Lima meeting.
They added: “We consider policies that combat IFFs as vital to raising revenues and supporting the attainment of the Sustainable Development Goals, consistent with the agreement in the Addis Ababa Action Agenda.”
KENYAN ECONOMY HIT HARD
Various studies have since shown that the Kenyan economy is haemorrhaging billions of shillings annually in illicit financial outflows, crucial resources which experts say could be used to invest in struggling sectors such as healthcare, education, and infrastructure.
A joint African Union (AU) and United Nations Economic Commission for Africa (UNECA) report adopted by a special summit of the African Union early this year showed that Kenya lost as much as Sh158 billion between 2002 and 2011.
The monies are lost through tax evasion by individuals and companies, illegal profit expatriation by multinational firms, organised criminal syndicates and also corruption related activities in the public sector.
By BRIAN NGUGI
