The Financial Action Task Force (FATF) must incorporate more of an ‘African voice’ in its standard-setting procedures to ensure a set of tailored legal, regulatory and operational measures relevant to meeting the diverse requirements in the fight against money laundering and terrorist financing in the sub-region, Finance Minister Ken Ofori-Atta has said.
Mr. Ofori Atta, who is Chair of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), said until this consensus and voice is given West African states might not be able to answer critical questions on: the root causes and state of play for illicit financial flows (IFFs) in the sub-region and continent at large; inability to mitigate the institutional structures and mechanisms which advance IFFs or decipher the value from reclaiming IFFs to finance the SDGs for African countries.
He was addressing colleague finance ministers at the opening session of the Ministerial Committee Meeting of GIABA member-states in Accra.
It is estimated that 2-5 percent of global GDP constituting US$800billion-US$2trillion is lost to money laundering and terrorism financing globally each year. This amount, according to the United Nations Conference on Trade and Development (UNCTAD), is almost 120 percent of the ECOWAS region’s GDP.
The UNCTAD estimates that about US$89billion worth of resources are lost to IFFs on the African continent annually; and said out of the approximately US$31.5billion in IFFs generated annually in conflicts areas, 96 percent of such funds are used by organised criminal groups – including fuelling of violent conflicts by terrorist groups.
This, Mr. Ofori Atta said, illustrates an urgent need for concerted efforts from all relevant stakeholders to help cut and minimise the funding sources for these terrorist groups.
“As we advance, I ask that we continue to support activities of GIABA in combatting the financing of terrorism and money laundering in our region,” he said.
Senior Presidential Advisor, Yaw Osafo-Maafo, during the event said while member-states put in the hard work with continuous evaluation exercises to meet the targets against money laundering, these regulatory requirements and processes have been cumbersome and expensive – especially for small economies.
He asked member-states to leverage robust and risk-proof digital infrastructure to ensure efficient implementation of the measures.
The advent of COVID-19 and its associated economic ravages – coupled with recent challenges regarding finance for terrorist activities in Mali, Guinea and Burkina Faso – have further deepened the responsibility of ECOWAS states to curb the flow of illicit finance.
Director General of GIABA, Justice Kimelabalou ABA, assured that member-states remain resolute and committed to fighting money laundering and terrorism financing.
The FATF is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat money laundering and terrorism financing.
In spite of the decades since its formation, South Africa is the only African member of the FATF.