The Malawi Economic Justice Network (MEJN) says illicit financial flows are highly affecting economic growth of the country, saying the siphoning of the funds is undermining growth in Malawi.
Speaking during the second meeting of the African parliamentarians on illicit financial flows and tax (APNIFFT) in the capital Lilongwe, MEJN’s executive director Dalitso Kubalasa said illicit financial flows do not only drain the country of resources for development but are also detrimental to revenue mobilization efforts.
“Abusive transfer pricing and related commercial activities attributed to multinational companies operating on the continent represent a significant source of this outflow.
“The net outflows from developing countries including the proceeds of tax evasion outweigh inflows of aid and investment,” he said.
Speaker of Malawi National Assembly Richard Msowoya said Africa and Malawi in particular cannot afford to be losing large amounts of money due to illicit financial flows at a time when leaders need to put much emphasis on development.
“A lot of money that the so-called foreign investors make as profits do not remain in the country. Sometimes, we are also the one authorizing tax invasion and corruption.
“For example, if we look at the money lost through cash-gate, we could have had some remarkable developments by now. If we look around, no development is in sight and people continue to suffer therefore we as MPs really need to curd this malpractice,” he said.
APNIFFT aims to provide a platform for African parliamentarians to undertake sustained advocacy related dialogue and debate in a simplified manner on illicit financial flows, tax governance and domestic resource mobilization on the African continent, among other issues.
While the continent is rich in minerals, agriculture remains the mainstay of Africa’s economy.