Learn About Illicit Financial Flows
Key Terms

Illicit Financial Outflows from Ethiopia Nearly Doubled in 2009 to US$3.26 Billion, Reveals New Global Financial Integrity Report

December 5, 2011

Global Financial Integrity

African Nation Lost US$11.7 Billion in Illegal Capital Flight from 2000 through 2009, Writes GFI Economist

Global Financial Integrity

WASHINGTON, DC – Corruption, kickbacks and bribery are on the rise in Ethiopia, according to a forthcoming report from Global Financial Integrity, a Washington-based research and advocacy organization.  According to the study, illicit financial flows out of the African nation nearly doubled to US$3.26 Billion in 2009 over the previous year, with corruption, kickbacks and bribery accounting for the vast majority of that increase.

GFI Economist Sarah Freitas, who co-authored the upcoming report with GFI Lead Economist Dev Kar, revealed the data in a blog post today on the website of the Task Force on Financial Integrity & Economic Development (financialtransparency.org).

Ms. Freitas wrote:

An upcoming report by Global Financial Integrity finds that Ethiopia, which has a per-capita GDP of just US$365, lost US$11.7 billion to illicit financial outflows between 2000 and 2009.  More worrying is that the study shows Ethiopia’s losses due to illicit capital flows are on the rise.  In 2009, illicit money leaving the economy totaled US$3.26 billion, which is double the amount in each of the two previous years.

The report, titled Illicit Financial Flows from Developing Countries over the Decade Ending 2009, shows that the vast majority of the rise in illicit financial flows is a result of increased corruption, kickbacks, and bribery while the remainder stems from trade mispricing.

Ethiopia is one of the poorest countries on earth.  Plagued by famine, war, and political oppression, 38.9% of Ethiopians live in poverty, and life expectancy in 2009 was just 58 years.   In 2008, Ethiopia received US$829 million in official development assistance, but this was swamped by the massive illicit outflows.  The scope of Ethiopia’s capital flight is so severe that our conservative US$3.26 billion estimate greatly exceeds the US$2 billion value of Ethiopia’s total exports in 2009.

The people of Ethiopia are being bled dry.  No matter how hard they try to fight their way out of absolute destitution and poverty, they will be swimming upstream against the current of illicit capital leakage.  The global shadow financial system happily absorbs money that corrupt public officials, tax evaders, and abusive multi-national corporations siphon away from the Ethiopian people.

The full article can be read here.

Ethiopia is not the only country to be highlighted in the organization’s upcoming study.  Indeed, in a similar blog post published last week, Ms. Freitas revealed that the report, titled Illicit Financial Flows from Developing Countries over the Decade Ending 2009, found that Syria had lost US$23.6 billion in illegal capital flight from 2000-2009.  The report is the annual update to GFI’s previous studies measuring the illicit financial flows out of 160 different developing nations.  This will be the first of GFI’s studies to include data for the year 2009.

To schedule an interview with Ms. Freitas or Dr. Kar, or to receive an embargoed copy of the report, contact Clark Gascoigne at cgascoigne@gfintegrity.org or +1 202 293 0740 ext.222.

###

Contact:

Clark Gascoigne
cgascoigne@gfintegrity.org
+1 202 293 0740 ext. 222.

________________

Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization which promotes transparency in the international financial system.

For additional information please visit www.gfintegrity.org

Follow us on: Twitter | Facebook | YouTube

Share
Latest Press Releases

TED Prize Winner Charmian Gooch Announces Global Campaign to Abolish Anonymous Companies

Global Witness · March 19, 2014

Vancouver, Canada, March 18, 2014 –This year’s TED Prize winner – Charmian Gooch of Global Witness – has announced that she will use the prestigious million-dollar award “to make it impossible for criminals and corrupt dictators to hide behind anonymous companies.” The announcement was made live and online from the TED stage in Vancouver, with support from leading members of the business, political, law enforcement and campaigning community.

European Parliament Gives Overwhelming ‘yes’ Vote to End Secret Corporate Ownership

Financial Transparency Coalition · March 11, 2014

Joint NGO Media Reaction Financial Transparency Coalition – Eurodad – Global Witness – Transparency International EU Office – Oxfam Brussels, March 11, 2014 – Today, the European Parliament endorsed the creation of public registers of who really owns companies, trusts and other legal structures. This will make it much harder for criminals, tax evaders, corrupt politicians and other money launderers to hide their identity, and their illicitly-acquired assets, behind anonymous companies and trusts.

NGOs welcome MEPs’ vote for ground-breaking changes to fight money laundering

Financial Transparency Coalition · February 20, 2014

Joint NGO media reaction Financial Transparency Coalition – Eurodad - Global Witness - Oxfam A cross political party agreement in the European Parliament ...