Financial Intelligence Centre (FIC) Director General Mary Chirwa has called on stakeholders to help make Zambia hostile to perpetrators of illicit financial flows.
And Chirwa says illicit financial flaws are a drain on state resources, reduce efforts to enhance domestic resource mobilization and cancel out investment inflows.
She was speaking when she officially opened the ongoing 2019 CTPD/AFRODAD media and government officials training workshop that is being held in Lusaka under the theme ‘Financing for development: Building on effective Domestic Resource Mobilization and Public Debt Management’, Wednesday.
“As a country and stakeholders, we need to take a coordinated approach to strengthen our economic governance institutions and machinery to ensure that we fight this vice. We need to ensure that tax administration is looked at, contract negotiations and trade related financial leakages. We need to tighten these faculties if the fight against IFFs is to be won. Every coin counts for Zambia. Let’s make our country hostile to perpetrators of financial crimes,” Chirwa said.
“The tackling of illicit financial flows is vital for sustaining economic stability and growth, maintaining security of society, protecting human rights, reducing poverty, protecting the environment for future generations and addressing serious and organized crimes.”
And the Director General said illicit financial flows were a drain on state resources.
“It is not just the loss of huge sums of money that should worry us, the general populace also loses confidence in their elected leaders and public institutions. Tax payers and economic players who work tirelessly to contribute to the society or economy become disillusioned. Genuine and law abiding companies find it difficult to compete due to unfavorable business environment where a shadow financial system continues to exist, the whole fabric of society is affected. It presents a drain on state resources, reduces efforts to enhance domestic resource mobilization and cancels out investment inflows. Ultimately, government fails to settle loans or debts as they fall due, due to limited reserves its disposal,” she said.
“Illicit financial flows undermine domestic revenue collection and have adversarial consequences on the ability of countries to optimally benefit from the extractive sector. Siphoning of resources by illicit means not only slows development, it also undermines the whole structure of society resources are diverted away from priority sectors such as energy and power, agriculture, infrastructure, health and education. In Such an environment, high poverty levels are the talk of the day, the gap between the rich and the poor keeps on increasing as resources are not being shared equitably.”
Chirwa said there was need to undertake specific research to establish the actual value of money which the country was losing to IFFs.
“No country is immune from illicit financial flows and therefore governments and all of us need to work together to tackle it successfully. The Financial Intelligence Centre is one of the institutions that have information on illicit financial flows data. More work, however, has to be done. There is need to undertake specific research to establish the quantum amount the country is losing to illicit financial flows,” said Chirwa.