In a decisive move to protect Africa’s financial stability and economic growth, the African Development Bank (AfDB) is launching a comprehensive three-year Action Plan (2024-2026) aimed at strengthening anti-money laundering (AML) measures and curbing illicit financial flows (IFFs) across the continent. The initiative, which will be unveiled during a virtual launch event on February 25, 2025, is expected to bring together policymakers, financial regulators, and global experts to discuss actionable strategies to tackle these pressing financial crimes.
The Growing Threat of Illicit Financial Flows in Africa
Illicit financial flows have emerged as a major obstacle to Africa’s economic progress, depriving governments of critical resources needed for infrastructure, healthcare, and social development. Studies indicate that Africa loses up to $90 billion annually—a staggering increase from $50 billion in 2015. These outflows, fueled by money laundering, tax evasion, corruption, and trade misinvoicing, are equivalent to nearly 4% of the continent’s GDP and rival the combined foreign aid and investment Africa receives each year.
Without effective intervention, illicit financial activities will continue to undermine economic stability, widen income inequalities, and weaken the ability of governments to deliver essential services. Recognizing the urgent need for a coordinated and robust response, the AfDB has developed this strategic action plan to curb illicit financial movements and promote financial transparency.
Key Focus Areas of the AfDB’s Action Plan
The Action Plan is structured around four core pillars to enhance Africa’s financial security:
- Strengthening Regulatory Frameworks: Collaborating with national governments and financial institutions to align AML policies with international standards, ensuring stronger enforcement mechanisms and closing legal loopholes that enable illicit transactions.
- Capacity Building for Financial Institutions: Training banks, regulatory bodies, and law enforcement agencies to improve fraud detection, risk assessment, and compliance procedures, enabling them to identify and prevent suspicious transactions more effectively.
- Enhancing International and Interagency Cooperation: Strengthening cross-border collaboration to track illicit funds, share intelligence, and implement joint enforcement actions with global financial regulators. This includes working with organizations such as the Financial Action Task Force (FATF), Interpol, and regional financial intelligence units.
- Public Awareness and Stakeholder Engagement: Launching educational campaigns to inform businesses, investors, and civil society about the dangers of illicit financial flows and encouraging a culture of financial integrity across both public and private sectors.
A Call for Collective Action
The AfDB emphasizes that addressing money laundering and financial crime requires a coordinated, continent-wide approach involving governments, financial institutions, law enforcement, and international partners. By implementing this proactive and strategic initiative, the Bank aims to:
- Drastically reduce illicit financial flows by implementing stronger regulatory controls.
- Enhance economic resilience by safeguarding Africa’s financial systems against exploitation.
- Promote transparency and good governance in financial transactions.
- Improve resource mobilization to support economic development and poverty reduction.
With Africa facing mounting financial risks from illicit activities, this Action Plan represents a critical step toward financial stability and sustainable growth.
Join the Fight Against Illicit Financial Flows
The AfDB invites financial professionals, policymakers, and regulatory experts to participate in the upcoming virtual launch event on February 25, 2025, where key stakeholders will discuss how to collaborate in strengthening financial integrity across Africa.
