Ghana’s Battle Against Illicit Financial Flows: A Call for Journalistic Vigilance

Ghana faces a staggering loss of $1.4 billion annually due to Illicit Financial Flows (IFFs), a warning sounded by the Tax Justice Network Africa (TJNA), a global advocate for fair taxation. Ishmael Zulu, a policy officer from TJNA, emphasized the detrimental impact of these unlawful fund transfers, stressing how they strip the nation of vital financial resources. These funds find their way to developed nations and tax havens like Mauritius, Cayman Islands, and British Virgin Islands.

Mr. Zulu, speaking at a training workshop for journalists in Accra, revealed the broader African picture, with the continent hemorrhaging $88.6 billion annually through IFFs. He shed light on the nature of these flows, describing them as transactions with illicit origins, transfers, or usage, often crossing international borders. Commercial activities account for the majority, constituting 65%, followed by criminal activities at 30%, with corruption making up the remaining 5%.

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Commercial activities, Mr. Zulu explained, involve deliberate maneuvers to conceal wealth, evade taxes, and circumvent duties through trade mispricing, profit shifting, and other tactics. He called upon Ghanaian and African journalists to intensify investigative reporting to unearth these illicit financial practices, ultimately aiding revenue generation for the nation’s development.

Evelyn Muedo, a Tax Policy Officer at TJNA, highlighted how multinational corporations exploit price transfer methods to sidestep tax obligations in developing countries. These corporations manipulate prices of goods exchanged between affiliates in Africa, inflating or deflating them to minimize tax liabilities. Such practices erode the tax base, depriving nations like Ghana of much-needed revenue.

The workshop, spearheaded by the Network for Women’s Rights in Ghana (NETRIGHT) in collaboration with TJNA, aimed to bolster journalists’ capacity to report on tax justice, revenue mobilization, and IFFs. Mrs. Patricia Blankson Akpakpo, Head of Secretariat at NETRIGHT, underscored the importance of investigative journalism in uncovering hidden financial practices and exposing tax evasion. She emphasized the need for gender-sensitive reporting to amplify the voices of women in discussions around tax justice and accountability.

The program also sought to enhance public awareness and engagement on tax equity while fostering partnerships between journalists and civil society organizations working in financial transparency and governance.

This two-day workshop, part of the Scaling UP Tax Justice III (SCUT III) project, brought together 25 journalists from across Ghana. They delved into topics such as transfer pricing, corruption uncovering techniques, corporate tax avoidance strategies, and identifying loopholes contributing to tax evasion.

The call to action is clear, Ghana must fortify its defenses against illicit financial flows by empowering journalists to shine a light on these clandestine practices. Through collaborative efforts between the media, civil society, and government, Ghana can reclaim its lost revenues and pave the way for a more equitable and prosperous future.

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