FAVOUR IME: By working together, African governments can tackle illicit finance

This week, from May 5-9, about 45 African governments will meet in Zambia in what could prove to be a critical moment for the success of Africa’s 2063 agenda. Participants will discuss plans to boost transparency and tackle illicit financial flows across the continent, and put forward recommendations for all heads of state and government to approve at the next assembly of the AU in early 2026.

Africa loses $89bn a year to tax evasion, corruption and other illicit financial flows, according to the UN. This is about 3.7% of the continent’s GDP, only slightly less than what African governments spend on education.

With debt levels and interest payments reaching record levels across Africa, and the US, UK and other high income countries slashing aid to the continent, it is more important than ever that African countries raise the resources to fund our own development.

Boosting company transparency is one of the ways to do this. The Paradise and Panama Papers revealed how multinational companies and wealthy individuals around the world use opaque shell companies to avoid and evade tax, robbing governments of much needed funds. Shell companies are also a favoured tool of corrupt politicians, officials and businessmen to launder stolen public money — a seminal 2011 World Bank study found they were used in 70% of grand corruption cases.

Significant progress is already being made across the continent to tackle these shady dealings, and begin to recoup more of the money Africa loses to illicit financial flows. In the plast decade, 42 of the 54 countries in Africa have introduced registers of the real — or beneficial — owners of companies, or have committed to doing so.

These registers help shine a light on potential criminal activity - enabling tax authorities and enforcement agencies to see where tax evaders, criminal gangs or those suspected of corruption are hiding their money.

However, beneficial ownership registers are simply an indication of progress and not an indication of impact in themselves — it is how they are implemented and used that matters.

SA and Zambia are among 13 African countries to join the Africa Beneficial Ownership Transparency (AfBOT) Network, an initiative that brings together governments and international partners to accelerate the effective use of company ownership registers across Africa.

Countries share their experiences and best practice when it comes to implementing the reforms, for example, collecting data in the optimal format, deciding whether or not to make the registers open to the public, and sharing examples of how the data has been used to catch criminals and boost government revenues.

May 5’s AU subcommittee meeting on tax and illicit financial flows will be a key opportunity to ramp up progress across the whole continent. Over the five day meeting, two days will be devoted to increasing company ownership transparency, which my colleagues at Open Ownership and I have been asked to facilitate.

At the meeting governments will share their experiences of implementing beneficial ownership reforms and make commitments to impact-driven implementation. We want to see countries move beyond ticking boxes or merely meeting international standards, to taking steps such as checking and verifying the data and then using it to inform government procurement decisions and map tax evasion schemes.

Attendees will also agree on a report that will be taken forward as part of the AU’s policy process, culminating in the assembly of heads of state and government in early 2026. This could include recommending that the AU facilitate regional data sharing across the continent, which would be a vital step given that so often corruption and tax abuse happens across borders.

Attendees could also take steps to push for greater financial transparency globally, by recommending that the AU adopt a joint negotiating position to strengthen global beneficial ownership transparency requirements and data sharing, as part of UN discussions on a global treaty on tax co-operation. African countries have been pivotal in pushing for the treaty, which will see authority for setting global tax rules moved from the Organisation for Economic Co-operation and Development (dominated by high income countries) to the UN, where developing countries are fairly represented.

In the changing world order, with the US stepping back from multilateral fora there is a clear opportunity for Africa to step up and show further global leadership, particularly on the issue of tax transparency and co-operation.

This week’s meeting presents a huge opportunity to chart a shared African vision for company transparency on the continent. With political will and ambition it could unlock domestic revenue, stop illicit flows and restore public trust — helping Africa achieve its 2063 vision to become a global powerhouse of the future.

• Ime is senior regional manager for Africa at Open Ownership, focused on support to national governments in Africa to implement beneficial ownership transparency reforms.