AfDB funds $5.2m crackdown on illicit financial flows in five African states

Funded by the AfDB, the project is designed to build the capacity of selected transition countries in Eastern and Southern Africa to tackle money laundering (ML), terrorism financing (TF), and illicit financial flows (IFFs).

It also aims to address structural fragilities and foster long-term resilience.

Speaking during the launch in Dar es Salaam on Thursday, July 25, 2025, AfDB Director of Economic Governance and Reforms, Mr Abdoulaye Coulibaly, emphasised the initiative’s critical role in protecting Africa’s financial systems from illicit activities.

He hailed the programme as a milestone in regional cooperation and a testament to the Bank’s commitment to strengthening anti-financial crime frameworks across the continent.

Citing alarming figures, Mr Coulibaly revealed that Africa loses an estimated $587 billion annually through IFFs, more than the $578 billion mobilised across the continent in 2023.

“Roughly $270.5 million is lost each year through tax evasion, due to international cooperation loopholes. In addition, $189 billion worth of natural capital is drained annually through illegal mining, fishing, and unregulated trade,” he said.

These losses, he noted, represent around 25 percent of Africa’s GDP and pose a significant threat to the continent’s socio-economic development.

“To counter these challenges, the AfDB is prioritising support through robust policy frameworks and strategic action plans,” he added.

ESAAMLG Executive Secretary, Ms Fikile Zitha, described the project as a landmark step in strengthening Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) systems in the region.

“Over the next three years, this initiative will provide vital technical assistance, capacity building, and institutional strengthening to improve the effectiveness of national systems,” she said.

She added that the project will also prepare beneficiary countries for mutual evaluations and facilitate their compliance with international AML/CFT standards.

“This marks the beginning of a journey towards stronger, more resilient financial systems. We must capitalise on this opportunity to strengthen national capacities, encourage interagency cooperation and sustain the political will required to win this fight,” she said.

Bank of Tanzania Deputy Governor, Dr Sauda Msemo, welcomed the initiative, describing it as a timely intervention for countries facing increased global scrutiny.

“Several beneficiaries, including South Sudan and Mozambique, are currently on the Financial Action Task Force (FATF) blacklist. This initiative will support them, and others like Burundi, Eritrea, and Madagascar, in aligning with global standards,” she said.

Dr Msemo shared Tanzania’s own experience in reforming its financial crime frameworks, after the country was flagged by the FATF in October 2022 for weaknesses in its system.

She said Tanzania embarked on wide-ranging reforms, including strengthening legal and regulatory frameworks, restructuring supervisory institutions, and enhancing interagency intelligence collaboration.

These efforts culminated in Tanzania’s removal from the FATF grey list in June 2025, a significant achievement she attributed to decisive leadership and collaborative implementation.

“This success demonstrates what can be achieved when there is clear direction, strong political commitment, and coordinated efforts,” said Dr Msemo.