Africa-Press – Malawi. Foreign exchange externalisations through misinvoicing, lack of capacity of negotiated deals, especially in the mining sector, and tax evasion have topped the activities on illicit financial flows (iff) hurting the local country. This was revealed at the opening of a two-day workshop on illicit financial flows from Africa in Blantyre Monday.
The workshop has drawn participants from the African Union and local government entities such as the Ministry of Trade and Industry, Ministry of Finance and Economic Affairs, the Reserve Bank of Malawi, the Anti-Corruption Bureau, the Financial Intelligence Authority and the Malawi Police Service.
Speaking during the opening of the workshop Senior Advisor to the African Union High Level Panel on IFFs from Africa Maxwell Mkwezalamba said the problem is big across the continent and Malawi has not been spared.
He said transfer pricing through transnational corporations, misinvoicing, poorly negotiated contracts in the extractive industry, tax evasion, abusive tax avoidance and corruption through senior government officials conniving with business men are the main thorns for Malawi.
“We have a draft report on how big the problem is and recommendations on how it can be dealt with especially if government agents have the capacity to deal with the problems and the report will be shared at a national workshop in about two months’ time,” he said.
On the local scene, figures indicate that by July last year, Malawi had lost $3.1 trillion to illicit financial flows within six years. Minister of Trade and Industry Mark Katsonga Phiri said the government is committed to reducing the vice and all input from the workshop will form policy directions that will be implemented.
“All that will be discussed here will be put together and act on it because illicit financial flows compromises progress in trading activities because money getting out illegally depletes foreign exchange, brings unfair competitions and kills the local industry,” he said.
African leaders, through ministers of finance, planning and economic development, established a high level panel on illicit financial flows from Africa on February 5, 2012 in Johannesburg, South Africa.
The High-Level Panel was established with the primary objective of enhancing Africa’s domestic revenue mobilisation. In this regard, Malawi and other African countries passed the African Union Special Declaration on illicit financial flows during the 24th African Union summit held in January 2015.
This followed the African Union Summit adopting the Report of the African Union High-Level Panel on illicit financial flows from Africa. Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk. He is however flexible as he also writes about current affairs and national issues.
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