The African Development Bank (AfDB) has said that the continent is losing more than $580 billion every year through corruption and illicit capital outflows, a loss that continues to undermine the continent’s economic progress and deepen its debt woes.
AfDB President, Akinwumi Adesina, who stated this in a Bloomberg interview, said the losses are so severe that they outweigh the continent’s ability to finance infrastructure and development, even as Africa’s total debt burden nears $2 trillion.
“It doesn’t matter how much water you pour into a bucket if the bucket is leaking. If you’re able to reduce the leakages to illicit capital, also corruption and all of these things, Africa will be able to keep a lot of these resources and meet the amount of infrastructure it needs,” Adesina said.
$1.6 billion lost daily
The AfDB estimates that Africa loses about $1.6 billion every single day to what it calls “financial leakages.”
This includes $90 billion annually in illicit financial flows, $275 billion lost through profit-shifting by multinational corporations, and $148 billion siphoned off due to corruption.
- These losses come at a time when the continent is grappling with an annual infrastructure financing gap of up to $170 billion, a shortfall that must be addressed if Africa is to unlock economic growth and create jobs for its youthful population. Instead of channelling resources into such projects, many African governments are overwhelmed by soaring debt-service costs.
- A joint study by the Boston University Global Development Policy Center and the Institute for Economic Justice recently found that debt servicing in Africa has climbed to its highest level since the early 2000s debt crisis.
- Shockingly, more than half of African governments now spend more on interest payments than on public healthcare.
Adesina stressed that while access to concessional financing and debt restructuring are important, curbing corruption and illicit outflows remains the single most crucial step to safeguarding Africa’s resources and reducing its reliance on debt.
What you should know
The AfDB, in its recently released 2025 African Economic Outlook, had expressed concern about Nigeria’s rising debt costs, stating that the country is projected to spend 75% of its revenues on interest payments in 2025.
According to the Bank, a country’s debt-to-GDP ratio may be low and still face high debt burdens if substantial shares of revenue are channeled towards debt service payments.
The AfDB further explained that while many African countries experienced declining debt levels in 2022–2023 due to favorable interest-growth differentials, this trend remains vulnerable.
A slowdown in economic growth or a rise in interest rates, the Bank noted, could reverse recent gains. Moreover, reckless fiscal behavior and excessive borrowing, especially on commercial terms, could undermine progress.
