GHANA LOSES $54BN TO TRADE-RELATED ILLICIT FLOWS OVER 10 YEARS
Country ranks third in Africa for financial outflows linked to misinvoicing and underpricing in exports
Ghana lost an estimated US$54.1 billion to trade-related illicit financial flows (IFFs) between 2013 and 2022, ranking third among Africa’s ten most affected countries, according to a new report by Global Financial Integrity (GFI).
The report, titled “Trade-Related Illicit Financial Flows in Africa, 2013–2022,” exposes deep structural weaknesses in Ghana’s international trade system, particularly in sectors such as gold, cocoa, and crude oil, where under-invoicing and opaque pricing practices are widespread.
Using trade data comparisons measuring what Ghana reports as exports against what trading partners record as imports the GFI found that nearly 28% of Ghana’s international trade may have been misinvoiced, mispriced, or unaccounted for. This translates to roughly $3 out of every $10 in trade transactions involving Ghana being improperly recorded.
While South Africa (US$478 billion) and Nigeria (US$77.7 billion) reported the largest absolute losses on the continent, Ghana’s total surpasses key regional economies like Côte d’Ivoire (US$47.7 billion) and Kenya (US$47.5 billion).
The report attributes much of Ghana’s losses to pricing irregularities in extractive exports and power imbalances with multinational trading partners. Trade with developed nations, including G7 countries, accounted for US$20.5 billion of the losses roughly a quarter of Ghana’s total trade with advanced economies suggesting significant capital flight from the country’s resource sectors to the Global North.
Development impact and policy recommendations
The GFI warns that countries with high illicit financial flows spend on average 25% less on health and 58% less on education compared to peers with lower levels of trade-related losses.
For Ghana, reclaiming even a fraction of the US$54.1 billion lost could dramatically improve funding for schools, hospitals, and key infrastructure projects that remain under-resourced.
To address the issue, the report urges Ghana to:
- Modernise customs systems by using data analytics and risk-based inspection tools to flag suspicious transactions in real time.
- Establish beneficial ownership registries to uncover the real owners of companies and trusts, reducing the use of shell firms to conceal illicit gains.
- Adopt blockchain-based trade data exchange systems to synchronise invoice and valuation data between trading partners.
- Strengthen regional cooperation through the African Continental Free Trade Area (AfCFTA) by harmonising invoice verification and cross-border enforcement.
- Criminalise trade misinvoicing and enhance whistleblower protection for those exposing tax evasion and illicit practices.
The report cautions that without decisive reforms, Ghana’s economic sovereignty and inclusive growth ambitions will remain undermined by unchecked illicit outflows.
“Effective reforms could transform Ghana from a net exporter of illicit wealth into a country that fully harnesses its natural resources for domestic development,” the GFI concluded.
Source:NKONKONSA.com
