By Agency Reporter   Thursday, 27 Jan 2011

Nigeria might have lost about $130bn (N19.5tn) between 2000 and 2008 to illegal financial outflows, a new report by United States-based group, Global Financial Integrity, has said.

The report titled, “Illicit Financial Flows from Developing Countries: 2000-2009,’’ said Nigeria had the 10th highest measured illicit outflows in the developing world, an average of $15bn (N2.25tn) per year.

The News Agency of Nigeria reports from New York that the GFI report ranks countries according to the magnitude of illicit outflows.

According to the report, China is ranked the highest country for measured illicit outflows in the developing world with $2.18tn, followed by Russia, $427bn and Mexico, $416bn.

The report also shows the annual outflows for each country and breaks outflows down into two categories of drivers: trade mispricing and “other,” which includes “kickbacks, bribes, embezzlement and other forms of official corruption.”

Other countries in the top 10 category are Saudi Arabia, $302bn; Malaysia, $291bn; United Arab Emirates, $276bn; Kuwait, $242bn; Venezuela, $157bn and Qatar, $138bn.

Primary findings from the report said illicit outflows increased from $1.06tn in 2006 to approximately $1.26tn in 2008.

It found that approximately $6.5tn was removed from the developing world between 2000 and 2008.

According to the report, average annual illicit outflows from developing countries averaged between $725bn and $810bn per year, over the 2000-2008 period.

“Illicit flows increased in current dollar terms by 18.0 per cent per annum from $369.3bn at the start of the decade to $1.26tn in 2008. When adjusted for inflation, the real growth of such outflows was 12.7 per cent,” it said.

The report put real growth of illicit flows over nine years in the African region at 21.9 per cent, compared with 24.3 per cent in the Middle East and North Africa; 23.1 per cent in developing Europe; 7.85 per cent in Asia and 5.18 per cent in Western Hemisphere.

The report’s author, Dev Kar, a former International Monetary Fund economist, said bribery, theft, kickbacks, and tax evasion were the greatest conduit for the illicit financial flows.

He said oil-exporting countries were becoming more important sources of illicit capital.

The GFI Director, Mr. Raymond Baker, said, “Every year, developing countries were losing 10 times the amount of Official Development Assistance remitted for poverty alleviation and economic development.

“This report measures the quantity and pattern of these harmful outflows and provides stark proof of the impact of these illicit financial practices.”

GFI said the authors of the report used a World Bank model to calculate developing countries’ missing billions.

Source: Punch