Financial Fraud Statistics in Senegal: A Regional Workshop Uncovers Shocking Figures
A recent regional workshop on the launch of statistical measurement of illicit financial flows (IFFs) for pilot countries in Africa has shed light on the alarming extent of financial fraud in Senegal.
What are Illicit Financial Flows?
Illicit financial flows involve illegal movements of money from one country to another and can take various forms such as:
- Money laundering
- Bribery by international companies
- Tax evasion
- Falsification of business transactions
- Corruption
According to the United Nations Conference on Trade and Development (UNCTAD), Africa loses a staggering $88.6 billion annually due to IFFs.
Financial Fraud in Senegal: The Numbers are Alarming
The Civil Forum estimates that 166 million CFA francs are lost to financial fraud every year in Senegal, with the extractive sector being the most affected. A whopping 85% of resources come from this sector.
Causes of Financial Fraud
Experts point out that the lack of transparency and accountability in the extractive sector contributes to IFFs. Tax breaks for new operations and undervaluation of mineral resources used in manufacturing construction materials are just a few examples of how companies exploit loopholes to maximize profits.
Efforts to Combat Corruption and Money Laundering
The National Anti-Corruption Office (OFNAC) is working to combat corruption through a national anti-corruption strategy from 2020-2024. The National Financial Information Processing Unit (CENTIF) has also adopted the Uniform Act on the fight against money laundering and terrorist financing (AML/CFT). Additionally, Decree No.2019-1499 created the National Committee for Combating Money Laundering.
Recommendations to Improve Transparency
The Extractive Industries Transparency Initiative (EITI) has made recommendations to improve transparency in the sector, including:
- Finalizing a procedure manual for managing mining titles
- Providing systematic controls on transactions
Workshop Objectives and Outcomes
The workshop aimed to build capacity among stakeholders on IFFs, particularly understanding capital expenditures by the mining and extractive industries. It also focused on statistical methods used to measure IFFs and the assessment of expenditure that could be assimilated as corporate income tax.
By shedding light on the alarming extent of financial fraud in Senegal, this regional workshop highlights the need for increased transparency and accountability in the extractive sector to combat corruption and money laundering.