Illicit financial flows (IFFs) continue to undermine the future of Africa, hampering the ability of governments to adequately fund education, healthcare and development projects essential for lifting people out of poverty and fostering sustainable economic growth.

As business leaders, politicians, academics and citizens, we cannot sit back. We must help curb the illegal flow of money out of our country through a cohesive effort by all stakeholders, both local and international, to ensure safeguards are put in place, laws are harmonised, and all enforcement agencies work together to address the problem. At the same time, we must not do anything that will deter investment.

Ahead of G20 summit in Johannesburg in November, as well precursor meetings — such as the G20 finance ministers’ and central bank governors’ meeting and the T20 midterm conference held this month — we must formulate proposals that integrate the perspectives of public and private sector institutions, nonprofit organisations, think-tanks and universities.

Together we can make valuable policy recommendations, such as using AI to turn vast amounts of data into information for developing strategic interventions. Working alongside each other, we can identify gaps in current legal frameworks and areas where greater co-operation is required.

We must seek ways to stem illicit money flows. When individuals or companies evade their tax obligations, deliberately falsify import or export documents, or misappropriate funds intended for development projects, they are not committing victimless crimes.

These outflows not only weaken our reputation in the eyes of the international markets, but also make it harder for the government to raise capital at manageable interest rates. We already owe too much: the National Treasury predicts that debt on our national balance sheet will be 77% of GDP this year.

IFFs directly undermine economic growth, costing the South African economy the equivalent of almost 5% of annual collected tax revenue — losses of about R92.5bn. On the African continent, the numbers are more alarming, with between $50bn (about R889bn) and $90bn stolen annually, according to the UN.

A 2020 report from a UN conference on trade and development states that IFFs represent as much as 3.7% of Africa’s GDP. This figure has almost certainly grown since then, given that those who break laws will keep doing so if they are not held accountable.

We recently convened a G20 multi-stakeholder dialogue to better understand this challenge, quantify its impact, assess current solutions, and identify new ones . One of our speakers, deputy minister of international relations and co-operation Alvin Botes, spelt out what this theft means: countries with high IFFs spend at least 25% less on healthcare and 50% less on education compared with their peers.

IFFs wipe out any good the $65bn in aid Africa receives each year might do. They reduce progress made in making people’s lives better.

There are initiatives under way to address IFFs. For example, the Financial Action Task Force (FATF) collaborates with the UN to strengthen countries’ financial systems and prevent illicit outflows.

While South Africa’s inclusion on the FATF’s grey list is viewed by some as an embarrassment, it enables us to strengthen our legal and regulatory frameworks, as well as enhance our anti-money-laundering capabilities.

We are also seeing prosecutions of high-level fraudsters, especially those who use dubious accounting methods to move money around and avoid paying their fair share of taxes. It is gratifying to see that action has been taken in this regard.

Other UN entities have developed discussion platforms and measurement systems. There are 10 asset-recovery inter-agency networks that have 178 member countries, allowing illicit money flows to be traced across borders. In addition, Interpol supports national and international law enforcement agencies to investigate, trace and prosecute those responsible for these crimes.

We must all strive towards expanding such interventions, as well as advocate for and enable closer alignment between government departments and between local law enforcement agencies and their international counterparts.

However, our solutions must not cause more harm than good by discouraging legitimate investment. We should not, for example, implement unfair tax regimes that could result in capital flight. We must also not inhibit international investment inflows by making it nearly impossible to comply with legislation and regulations. Such a state of affairs would merely encourage companies to operate businesses in sectors such as import and export under the radar.

Through working together by sharing data, harmonising laws and holding those responsible for IFFs accountable, we can strengthen the economy by plugging the holes through which money leaks and encouraging investment. Our people deserve nothing less.

Victor Sekese, CEO of SNG Grant Thornton.