Nation needs accurate data to tackle illicit financial flows — Panellists
Panellistss discussing ways the country can wean itself from illicit financial flows (IFFs) have called for a comprehensive framework on data collection to track sources of IFFs.
They also urged institutions such as the Ghana Statistical Service (GSS), the Ghana Revenue Authority, (GRA) and the Customs Division to provide accurate data for better analysis to help address the canker.
The panellists included the ISODEC/UN expert for IFF Statistical Measurement in Ghana, Bishop Akolgo; the Coordinator of Tax Justice Coalition, a CSO, Nii Benaiah Nii Addo; the Director of Economic Statistics, (GSS), Asuo Afram; the CEO of the Ghana Chamber of Mines, Sulemana Koney, and a lecturer at the University of Ghana School of Law, Jennifer Hall.
The discussions formed part of a multi-stakeholder workshop on “Curbing IFFs to finance development: Results from a multi-disciplinary research approach”.
They also spoke about an outcome of a six-year (2017-2021) interdisciplinary research that explored how commodity trade-related IFFs in the country could be significantly reduced to finance the sustainable development goals (SDGs).
It was conducted by a team of researchers at the University of Ghana, in collaboration with Centre on Conflict, Development and Peacebuilding (CCDP) of the Graduate Institute of International and Development Studies, UG, with project sites in Ghana, Laos and Switzerland.
They further said that tackling illicit inflows was necessary to check businesses, including foreign investors who took advantage of the lapses in data to engage in under invoicing or underpricing, overpricing, payment of inaccurate taxes and under-declaring of profits, among other illegal dealings.
The country is said to be losing $2.2 billion annually through IFFs as a result of mispricing.
Multinational companies, especially those in the extractive industry, were benefiting from such financial leakages because of the country’s unpreparedness to venture into high-risk business, considering that sector as Foreign Direct Investments (FDIs).
The panellists, therefore, underscored the need for the nation to own its resources and invest in them for the benefit of the people.
“If indeed IFFs exist, we should know which segment we are attributing them to and then possibly drill them down to the company, individual and exporter level, and hold them accountable,” Mr Koney said.
He said there had not been established evidence of companies in the mining sector engaging in IFFs and that some of the problems affecting revenue generation in the sector were rather the fact that the nation had allowed FDIs alone to invest in high-risk resources without indigenous participation, allowing FDIs to take benefits associated with their investments.
“When you set out to attract foreign direct investment to your country, it is a good thing as it comes with capital, knowledge, skills and technology, among others.
“But it is also important that on the back of FDIs, we grow our own capacity, learn from them and be able to do similar to what they have been doing,” Mr Koney added.
A senior research fellow at the Institute of Statistical Social and Economic Research (ISSER), Fred Dzanku, said the team looked at issues of IFFs in areas of gold and cocoa to see ways in which the country was losing resources through trade-related undervaluation and mispricing in general.
The research also considered how much the country was losing as a result of trade-related illicit activities, the whole regulatory framework and how existing laws were aiding in the siphoning of monies that could have been retained in the country for development, and how duty bearers were responding to IFFs, among other sectors.
Ms Jennifer Hall also said: “Our research concluding is that we do not necessarily need new laws or regulations; what we need is more enforcement mechanisms to enforce the laws”.
For his part, Mr Akolgo urged regulators to share data and information “so that we can secure and generate enough revenue to fund our development”.