The crisis of money laundering in Africa’s financial system has been bemoaned by the Africa Development Bank (AfDB), which has also demanded more action to prevent the threat.
The issue expressed by Kevin Urama, the bank’s Chief Economist and Vice President of Economic Governance and Knowledge, was that illegal money flows are causing African nations to lose almost $90 billion annually.
At the Public Finance Management Academy for Africa’s inaugural cohort’s graduation ceremony on Thursday in Abuja, he made this statement.
In his inaugural speech, Urama pointed out that improving economic governance and knowledge management to encourage wealth creation and responsible public finance management is where PFM’s key strategic relevance lies.
He underlined that “Africa, despite its natural resource richness, often faces financial challenges due to mismanagement,” underscoring the need of addressing issues within the PFM ecosystems.
“Several studies have attributed this to poor management of public resources – from ineffective mobilisation and use of domestic revenue, unsustainable borrowing and lack of prudence in the use of debt resources, illicit financial and resource flows, resource theft, among other forms of leakages and corruption along the PFM ecosystems in countries.
“Currently, African countries lose almost $90 billion in illicit financial flows annually, and much more in illicit resource flows and resource theft, poorly implemented fiscal policy incentives, and excessive dependence on commodity exports for foreign exchange earnings. This exposes countries to highly volatile global market prices and highly vulnerable supply chains. This situation is not acceptable.”
He said that in order for Africans to effectively manage the resources needed to increase production and generate prosperity for Africans, they need to establish monetary frameworks.
According to him, the academy is a crucial component of the Bank Group’s program implementation, with an emphasis on resolving PFM cycle difficulties.
Urama also urged the graduates to lead the way in advancing accountability and openness in their home nations. He asked them to support African initiatives aimed at improving productivity and resource management.
The Special Advisor to the President on Economic Affairs in the Office of the Vice President, Tope Fasua, also spoke at the event and praised the PFMA’s extensive curriculum for covering important facets of public financial and debt management.
He stated that in order to reduce thrifty spending, the school must continue its efforts to address the pressing demand for improved knowledge and skills among public officials operating in these vital areas throughout African countries.
The Special Advisor praised the graduating class as well, highlighting the part that their newly acquired abilities would play in realising Agenda 2063 of the African Union, the UN Sustainable Development Goals, and the High 5’s Agenda of the African Development Bank.
He said, “This platform helping public officers aggregate knowledge from relevant institutions and making it accessible to public financial management officials should be encouraged and expanded to other areas of capacity development beyond public financial management.”
One of the PFMA alumni, Isaac Kurasha, gave a moving address at the program’s graduation, looking back on the 18 months that started on March 2, 2022, and highlighting the wealth of experience and knowledge acquired.
He explained that, “The training enriched my understanding of the public financial management cycle, providing insights into various components.”
Additionally, he emphasised how assignments and interactions with coworkers from various divisions broadened his viewpoint and helped him get a greater understanding of the intricate workings and structure of the National Treasury.
