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Curb Illicit Financial Flows to Fund Quality Public Social Services in Uganda

Introduction

The scourge of illicit financial flows (IFFs) has been identified as a major hindrance to sustainable development and social justice in Uganda. IFFs refer to the illegal movement of capital across borders, often linked to criminal activities such as money laundering, drug trafficking, and corruption.

Definition of Illicit Financial Flows

According to experts, IFFs can take many forms, including tax evasion, trade misinvoicing, and bribery. The United Nations Economic Commission for Africa (UNECA) defines IFFs as “funds which are illegally earned, transferred or utilized” and includes all unrecorded private financial outflows that drive the accumulation of foreign assets by residents in breach of relevant national or international legal frameworks.

Impact on Uganda

In Uganda, IFFs are estimated to be significant, with the country losing billions of dollars in foreign exchange every year. This has a devastating impact on the country’s ability to provide quality public social services, including education and healthcare.

Global Efforts to Combat Illicit Financial Flows

The Addis Ababa Agenda calls upon all member states to substantially reduce IFFs by 2030, with a view to eventually eliminating them. Measures such as combating tax evasion and corruption through strengthened national regulation and increased international cooperation are identified as key steps towards achieving sustainable development.

Efforts in Uganda

The government of Uganda has committed to implementing measures aimed at reducing corruption and improving transparency in financial transactions between governments and companies.

Dimensions of Illicit Financial Flows

Commercial: 65% Corruption: 5% Criminal: 30%

Conclusion

As the country works towards achieving its sustainable development goals, it is essential that IFFs are addressed head-on to ensure that Uganda’s resources are used effectively to fund quality public social services.

Source: United Nations, World Bank, and Ugandan government reports.