Africa is losing an estimated $580 billion each year to illicit financial flows, tax avoidance, corruption, and inefficiencies in public finance, according to African Development Bank (AfDB) President Akinwumi Adesina. Speaking at a recent policy forum, Adesina urged African governments and international partners to treat the leakage as a critical threat to the continent’s fiscal stability, warning that failure to address it could deepen the region’s debt crisis.
A Debt Burden Growing Too Heavy
Public debt across Africa has surged to levels not seen in decades, driven by pandemic spending, rising global interest rates, and increased borrowing for infrastructure. Several countries, including Zambia, Ghana, and Ethiopia, have already sought debt restructuring under international frameworks. The AfDB chief cautioned that without decisive reforms to plug financial leakages, more nations risk sliding into default.
“The issue is not only about debt sustainability, but about resource mobilization,” Adesina explained. “Africa cannot afford to lose over half a trillion dollars annually while going cap in hand to international creditors.” 
The Sources of the Leak
Experts point to several areas where money bleeds from African economies:
- Illicit financial flows (IFFs): Multinationals shifting profits abroad through tax avoidance schemes cost the continent billions.
- Corruption and mismanagement: Weak oversight and accountability mechanisms allow state funds to be siphoned off.
- Capital flight: Wealthy elites often transfer large sums offshore, draining domestic investment capacity.
- Inefficient tax systems: Many governments struggle with narrow tax bases and poor collection infrastructure.
Together, these factors account for a net outflow larger than the annual aid and development financing Africa receives, undermining growth and fiscal resilience.
AfDB’s Prescription for Change
Adesina outlined a multi-pronged approach to tackling the problem:
- Strengthening tax administration through digital platforms and cross-border cooperation.
- Closing loopholes in international finance to prevent corporate profit shifting and illicit flows.
- Boosting transparency and governance to curb corruption and ensure efficient use of public funds.
- Building domestic capital markets to retain savings and reduce reliance on external borrowing.
- Enhancing regional cooperation under frameworks like the African Continental Free Trade Area (AfCFTA) to harmonize standards.
He argued that by plugging these leaks, Africa could not only address debt vulnerabilities but also mobilize domestic resources for sustainable development, reducing dependence on external donors and lenders.
The Global Dimension
International partners also bear responsibility, Adesina stressed. Many illicit flows from Africa end up in banks and tax havens abroad. He called for greater collaboration between African governments, Western regulators, and global financial institutions to clamp down on money laundering, transfer pricing, and shell companies.
“Africa does not lack resources,” Adesina said. “What Africa lacks is the power to stop those resources from bleeding away into other economies.”
A Path to Fiscal Sovereignty
While the challenge is daunting, experts believe Africa has the tools to make progress if political will aligns with institutional reforms. Improved governance, stronger regional cooperation, and effective use of technology could significantly reduce losses over the next decade.
For now, however, the $580 billion leakage remains a stark reminder that Africa’s debt crisis is not only about what it owes, but also about what it loses. Stemming that tide, AfDB leaders argue, may prove as important as any external debt relief program in charting a sustainable future for the continent.
