Ethiopia’s Financial Crime Landscape: A Growing Concern Amidst Economic Progress
Amidst the political and economic transformation underway in Ethiopia, financial crimes continue to pose a significant threat. A recent assessment of financial crime trends in the East African nation paint a complex picture of progress and challenges.
Ethiopia’s Economic Progress
-Second most populous country in Africa with over 109 million people -No longer listed as a “Country of Primary Concern” for money laundering and terrorist financing by the United States -Identified as a country under close watch by other international bodies
Highest-risk Criminal Activities
- Human trafficking and migrant smuggling
- Corruption
- Goods smuggling
- Illegal hawala
- Fraud
- Tax evasion
Corruption
-Transparency International’s Corruption Perceptions Index ranked Ethiopia 96th out of 180 countries, with a score of 37/100 -Received a “CCC” rating from the Global Slavery Index regarding its response to modern-day slavery, with an estimated 614,000 modern-day slaves
Organized Crime
-Scored a 4.58/10 on the African Organised Crime Index -Top criminal actor types: “Foreign Actors” and “Criminal Networks” -Most prevalent criminal markets: arms trafficking, human smuggling, and human trafficking
Modern Slavery
-Ranked 52nd on the Global Slavery Index and 30th in Africa -Approximately 41.5% of children aged 7-14 are engaged in labor
Government Efforts to Combat Modern Slavery
-Established the National Council against Human Trafficking and Smuggling -Implemented new comprehensive Anti-Human Trafficking and Migrant Smuggling legislation in 2019
People Smuggling
-Serves as a source and transit country for three major migration routes
Arms Trafficking
-Particularly concerning near the eastern border -Connected to the country’s military presence in Somalia
Goods and Currency Smuggling
-Total value of confiscated contraband goods: Birr 125.7 million (US$ 5.6 million)
Drug Trafficking
-Identified as a key transit point for drugs destined for Europe and the Middle East
Environmental “Green” Crimes
-Key transit point for the movement of ivory and rhino horn
Conclusion
-Financial crime landscape remains a cause for concern, particularly regarding human trafficking, corruption, arms trafficking, and drug trafficking -Government has taken steps to address these issues, but ongoing efforts are required to effectively combat them and ensure long-term economic growth and stability.