*Capital flight fueling poverty in one of the world’s poorest nations
13 November 2012, Sweetcrude, WASHINGTON DC – Illicit financial flows due to crime, corruption, and tax evasion cost Zambia $8.8 billion from 2001-2010, finds a forthcoming report from Global Financial Integrity (GFI).
Sarah Freitas, a GFI Economist who co-authored the report with GFI Lead Economist Dev Kar, previewed some findings from the report, which looks at every country in the developing world, for the nation of Zambia in a blog post on the website of the Task Force on Financial Integrity and Economic Development.
Ms. Freitas argues that capital flight—both licit and illicit—is draining tremendous amounts of money from the Zambian economy, which remains poor despite massive natural resource wealth. She writes:
“Our research finds that $8.8 billion left Zambia in illicit financial flows between 2001 and 2010. Of that, $4.9 billion can be attributed to trade misinvoicing, which is a type of trade fraud used by commercial importers and exporters around the world.
“This is a very serious problem. Zambia’s GDP was $19.2 billion in 2011. Its per-capita GDP was $1,413. Its government collected a total of $4.3 billion in revenue. It can’t afford to be hemorrhaging illicit capital in such staggering amounts.”
The full blog post can be read here.
The full report, Illicit Financial Flows from Developing Countries 2001-2010, will be published on Monday, December 17th, 2012 at 18:59 EST (23:59 GMT), and will include data from 150 different developing and emerging countries. The forthcoming study is the annual update of Global Financial Integrity’s illicit financial flow estimates.
