Financial Crime World

Senegal’s Financial Fraud Statistics Raise Concerns

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Senegal has been ranked as the 8th country in the world for money laundering and terrorist financing risks, sparking concerns about its ability to combat financial fraud.

Major Drivers of Financial Fraud

  • Drug trafficking is a major driver of this problem, with illegal proceeds from the trade estimated to be around US$360 million annually.
  • Real estate and construction are seen as key sectors for money laundering due to their flexibility and lack of transparency.

Challenges in Real Estate Sector

  • The use of fake names by investors and the lack of a central registry have made it easier for drug traffickers to launder their money through these industries.
  • A staggering 96% of US$480 million invested in Senegal’s real estate sector between 2011 and 2013 was reportedly from dubious sources.

Government Efforts to Combat Financial Fraud

  • The government has pledged to collaborate with international organizations such as the Financial Action Task Force (FATF) and the Groupe Intergouvernemental d’Action Contre le Blanchiment d’Argent en Afrique de l’Ouest (GIABA).
  • However, progress has been slow, and more needs to be done to strengthen Senegal’s legal and institutional framework against money laundering.

Technical Expertise in Detecting and Preventing Money Laundering

  • Senegal lacks technical expertise in detecting and preventing money laundering.
  • The country’s banking system relies heavily on foreign currencies, which are often obtained through illegal channels, making it difficult for authorities to control financial flows.

Recommendations to Improve Financial Transparency

  • Delinking the Senegalese currency from the euro could provide greater flexibility and macro-economic options for the country.
  • This would give banks more leeway to provide loans to legitimate businesses, reducing the need for illegal financial activities.

Commitment to Cooperation with International Organizations

  • Despite the challenges, Senegal is committed to working with international organizations to address its financial fraud issues.
  • With continued efforts and cooperation, the country can improve its financial transparency and reduce the risk of money laundering and terrorist financing.