The United Nations Economic Commission for Africa (ECA) has raised the alarm over Africa’s annual loss of an estimated $40 billion to illicit financial flows (IFFs) from the extractive sector, funds that could otherwise be channeled into infrastructure, education, healthcare, and job creation.
Deputy Executive Secretary of the ECA, Antonio Pedro, disclosed this during a High-Level Policy Dialogue in New York, which marked the close of the 2025 African Dialogue Series (ADS).
Themed “Justice for Africans and People of African Descent Through Reparations,” the series brought global attention to Africa’s calls for economic justice and reparatory development.
Overdependence on raw materials
Pedro warned that these financial leakages are not merely accounting discrepancies but a structural symptom of Africa’s overdependence on raw material exports, a colonial-era economic model that continues to limit value creation and deepen inequality.
“IFFs in the extractive sector are a symptom of a deeper structural problem—Africa’s overdependence on raw material exports. This amounts to exporting jobs and limiting industrial development,” Pedro said.
- He noted that Africa needs to generate at least 20 million jobs annually to accommodate its fast-growing youth population, and curbing IFFs is critical to meeting that target.
- The loss of capital through tax evasion, transfer mispricing, and opaque contracts deprives the continent of much-needed revenue and undermines efforts toward sustainable growth.
- Pedro linked the challenge of IFFs to the broader conversation on reparatory justice, arguing that addressing these systemic outflows must be a central pillar of Africa’s development strategy.
- He commended the African Dialogue Series for offering a platform for unified African engagement, urging that Africa “must speak with one voice” to push its priorities on the global stage.
Operationalising the policy framework
To reverse the trend, Pedro called for the urgent operationalisation of existing policy frameworks such as the African Mining Vision and the African Green Minerals Strategy, both designed to promote value addition, local content, industrialisation, and community development in the mining and energy sectors.
“What is needed now is to operationalise these frameworks and turn political commitments into action,” he said.
He further highlighted the need for policy coherence across key sectors—mining, trade, energy, industrialisation, and infrastructure—and called for reforms in global financial systems to reduce vulnerabilities exploited by IFF enablers.
Pedro stressed that a collective effort is required across governments, mining companies, local communities, and financial institutions to close perception gaps and ensure transparency and accountability in resource governance.
“As we move forward, prioritising sustainable development and tackling the systems that sustain IFFs, alongside reparatory measures, is critical to achieving justice for Africa,” he concluded.
The African Dialogue Series is an annual initiative hosted by the UN Office of the Special Adviser on Africa (OSAA), in collaboration with the African Union and other UN agencies, to elevate the continent’s development agenda and foster global solidarity with African and diaspora communities.
