Illicit Financial Flows and the Extractive Industry in Ghana

The quest for structural transformation in Africa requires raising the continent’s productive capacity. This can only be achieved by increasing investment in infrastructure, promoting technology transfer and innovation for value addition, and boosting agricultural productivity, among others. However, achieving this developmental state in Africa has been significantly constrained by the financial structures of illicit financial flows (IFFs). IFFs undermine the potential for economic transformation in the continent through, draining tax revenues and scarce foreign exchange resources, stifling growth and socioeconomic development, and weakening governance (UNECA, 2013). In fact, according to United Nations Economic Commission for Africa (UNECA-2013), IFFs perpetuate Africa’s economic dependence upon other regions and undermine the capacity of the African governments to pursue a developmental state approach that prioritizes capacity-expanding, transformative and distributive economic and social development policies.