Africa is grappling with the persistent challenge of illicit financial flows (IFFs), a new report from the African Union High-Level Panel on Illicit Financial Flows (AU HLP-IFF) has revealed.
Despite some progress in regulation and anti-corruption measures, most African countries still lack the legal frameworks and institutional capacity required to effectively combat the problem.
Published on August 27, 2025, the report, titled “Successes and Challenges in Implementing the Recommendations of the African Union High-Level Panel on Illicit Financial Flows,” underscores the absence of a coherent, continent-wide strategy to tackle IFFs.
It warns that geopolitical developments over the past decade—including the rivalry between the United States and China, the Covid-19 pandemic, the war in Ukraine, and the emerging climate and debt crises—have increased Africa’s vulnerability.
The report also criticizes the prevailing approach to domestic resource mobilization (DRM), describing it as outdated and inequitable. “This concept distracts from the real issue: the creation of domestic resources,” the authors note, calling instead for a policy integrating both resource creation and mobilization (DRCM).
While acknowledging the establishment of financial intelligence units, anti-corruption agencies, and beneficial ownership registers in several member states, the report highlights persistent challenges. Limited cooperation between states, capacity gaps, and inadequate institutional commitment undermine the effectiveness of these mechanisms.
Key weaknesses remain in customs management, regulation of non-bank financial institutions, oversight of foreign exchange bureaus, and controls on non-resident bank accounts.
Heavy reliance on cash transactions and the absence of integrated sanctions management systems further exacerbate the problem, the report notes.
The AU HLP-IFF emphasizes that without a comprehensive and coordinated approach, illicit financial flows will continue to drain vital resources from the continent, undermining economic growth and development.
It calls for renewed political will, stronger institutional frameworks, and enhanced cooperation both within Africa and with international partners to curb this ongoing financial challenge.
The report serves as a stark reminder that tackling IFFs is not just a regulatory issue but a strategic imperative for the continent’s economic stability and sovereignty.
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