16% OF MW’s GDP lost to illicit financial flows—UN

United Nations Development Programme (UNDP) has said Malawi loses nearly 16 percent of its gross domestic product (GDP) annually to illicit financial flows.

If the quoted figure is anything to go by, this means that at the current nominal GDP value of K3.4 trillion, Malawi loses about K544 billion (about $855.3million) to illicit financial flows.

Speaking on Friday in Blantyre during the Institute of Chartered Accountants in Malawi (Icam) annual dinner and dance, UN resident representative Mia Seppo said these are financial resources needed to move the country from poverty to prosperity.

The dinner and dance at Sunbird Mount Soche was held under the

theme Sustainable Development Goals (SDGs): Partnering with Professionals.

Seppo said that if tracked and mobilised effectively, Malawi’s dependency on aid would drastically reduce.

She said: “Illicit financial flows are robbing our continent of valuable resources. Africa loses more than $50 billion in illicit finance that is almost double all the aid that the continent receives.”

Seppo emphasised on the need for the country to focus on developing a human agenda if the country is to use its available resources well.

“All available resources must be drawn in for human agenda; be it domestic and international, public and private or environmental, for development. It should also be noted that official development assistance aid remains important, especially for poor and vulnerable countries many of which are challenged to raise domestic revenue and attract private financing,” she said.

Seppo said professional institutions such as Icam can offer insight into solutions for public finance management, public sector reforms and advance reporting mechanism and oversight for both the public and private sector.

In his remarks, Icam president Chiwemi Chihana said they are currently engaging various players on public resource management.

“For us to move these development goals, funding is required and some funding is allocated to infrastructure development.

“One of the failures of Millennium Development Goals [MDGs] is because developed nations did not live up to their promise.

“It requires heavy financing, transparency and accountability. Donors would pull in money, but instead of directing the money towards desired activities, they are diverted to some other purposes rather than the ones assigned,” he said.

MDGs were succeeded by SDGs, which are a set of priorities consisting 17 goals, 169 priorities and over 300 indicators formulated by the UN and adopted by member countries at its summit in September 2015. n