Abstract
The economic and financial crimes of embezzlement and theft, bribes and kickbacks, money laundering and illicit financial flows, and through state capture, are all channels of corruption that are prevalent in Africa with significant negative effects on the continent’s sustainable development outcomes. This chapter identifies and analytically reviews and assesses the trends of these principal economic and financial crimes as channels of corruption that impact the development process and economic progress in Africa. It therefore provides an analysis of the nature and extent of the trends in economic and financial crimes, as channels of corruption in Africa, and the resultant negative impact on sustainable development in the region.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Aboobaker, A., Naidoo, K., & Ndikumana, L. (2022). South Africa: Capital flight, state capture, and inequality. In L. Ndikumana & J. K. Boyce (Eds.), On the trail of capital flight from Africa: The takers and the enablers (pp. 149–192). Oxford University Press.
Achim, M. V., & Borlea, S. N. (2020). Economic and financial crime: Corruption, shadow economy, and money laundering. Springer Nature.
AfDB. (2013). The cost and extent of corruption and weak governance. Market Brief−Africa Economic & Financial Brief, 4(40), 1–7. https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Market_Brief_-_Africa_Economic_Financial_Brief_16-20_September_2013.pdf
AFP. (2022, July 27). Vote bribes leave Kenyan banks short of small notes, Barron’s. Retrieved from https://www.barrons.com/news/vote-bribes-leave-kenyan-banks-short-of-small-notes-01658934307
Afrobarometer. (n.d.). Round 8 surveys 2019–21. [online data analysis]. Retrieved from https://www.afrobarometer.org/online-data-analysis/
Ali, M., Khan, L., Sohail, A., & Puah, C. H. (2019). The relationship between aid and corruption: A case of selected Asian countries. Journal of Financial Crime, 26(3), 692–704. https://doi.org/10.1108/JFC-08-2018-0089
Aluko, A., & Bagheri, M. (2012). The impact of money laundering on economic and financial stability and on political development in developing countries: The case of Nigeria. Journal of Money Laundering Control, 15(4), 442–457. https://doi.org/10.1108/13685201211266024
Andersen, J. J., Johannesen, N., & Rijkers, B. (2020). Elite capture of foreign aid: Evidence from offshore bank accounts. [Policy Research Working Paper 9150]. World Bank.
Asongu, S. A., & Nwachukwu, J. C. (2016). Foreign aid and governance in Africa. International Review of Applied Economics, 30(1), 69–88.
Bertelsmann Stiftung. (2018). BTI [Bertelsmann transformation index] 2018 country report−South Africa. Bertelsmann Stiftung.
Blunt, E. (2002, September 18). Corruption costs Africa billions, BBC News. Retrieved from http://news.bbc.co.uk/2/hi/africa/2265387.stm
Breen, M., & Gillanders, R. (2022). Money down the drain: Corruption and water service quality in Africa, Governance. [Advance online publication]. https://doi.org/10.1111/gove.12753
Burgis, T. (2015). The looting machine: Warlords, oligarchs, corporations, smugglers, and the theft of Africa’s wealth. Public Affairs Books.
BusinessTech. (2017, September 1). Corruption costs SA GDP at least R27 billion annually, and 76, 000 jobs, BusinessTech. Retrieved from https://businesstech.co.za/news/government/196116/corruption-costs-sa-gdp-at-least-r27-billion-annually-and-76-000-jobs/
CDD-Ghana. (2021). Democracy capture in Africa: Benin, Ghana, Kenya, Mozambique, Nigeria. CDD-Ghana.
Cheeseman, N., & Klaas, B. (2018). How to rig an election. Yale University Press.
Chingaipe, H. (2022). A decade of governance as “roving banditry”: The political economy of public finance mismanagement in Malawi, 2010-2020. In K. R. Ross, A. L. Chiweza, & W. O. Mulwafu (Eds.), Beyond impunity: New directions for governance in Malawi (pp. 47–76). University of Cape Town Press.
Chipkin, I., Swilling, M., Bhorat, H., Buthelezi, M., Duma, S., Friedenstein, H., Mondi, L., Peter, C., Prins, N., & Qobo, M. (2018). Shadow state: The politics of state capture. Wits University Press.
Citizen Reporter. (2017, September 12). R250bn lost to state capture in the last three years, says Gordhan, The Citizen. Retrieved from https://citizen.co.za/news/south-africa/1651069/r250bn-lost-to-state-capture-in-the-last-three-years-says-gordhan/
Curtis, M., & Ngowi, P. (2017). The one-billion-dollar question revisited five years later–how much is Tanzania now losing in potential tax revenues. Retrieved from http://curtisresearch.org/wp-content/uploads/ONE-BILLION-DOLLAR-QUESTION-Final.pdf
Curtis, M., & O’Hare, B. (2017). Lost revenues in low-income countries. Retrieved from http://curtisresearch.org/publications/lost-revenues-in-low-income-countries/
Cusack, J. (2020). Financial crime threat assessment: Sub-Saharan Africa. Retrieved from https://thefinancialcrimenews.com/sub-saharan-africa/
de la Croix, D., & Delavallade, C. (2014). Why corrupt governments may receive more foreign aid. Oxford Economic Papers, 66(1), 51–66. https://doi.org/10.1093/oep/gpt004
de Morais, J. P. (2016, January 19). The fight against money laundering–An African perspective. Financial Times Retrieved from https://www.ft.com/content/c8184a87-0590-3aa9-b0af-2c6ba5f28c33
EC. (2019a, February 13). European Commission adopts new list of third countries with weak anti-money laundering and terrorist financing regimes. [Press Release]. Retrieved from http://europa.eu/rapid/press-release_IP-19-781_en.htm
EC. (2019b, February 13). Anti-money laundering: Q & A on the EU list of high-risk third countries. [Fact Sheet]. Retrieved from http://europa.eu/rapid/press-release_MEMO-19-782_en.htm
EC. (2022). Commission delegated regulation (EU) 2022/229 of 7 January 2022 on amending Delegated Regulation (EU) 2016/1675 supplementing Directive (EU) 2015/849 of the European Parliament and of the Council. Retrieved from https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R0229&from=EN
EFCC. (2021). Strategic plan 2021–2025. EFCC.
Ellis, S. (2016). This present darkness: A history of Nigerian organized crime. Oxford University Press.
Epstein, H. (2014, December 4). Colossal corruption in Africa. New York Review of Books. Retrieved from https://www.nybooks.com/articles/2014/12/04/colossal-corruption-africa/
Erasmus, M. N. (2020). Placing clientelism and vote buying in context: An African synopsis of the phenomena. Gender and Behavior, 18(3), 16173–16181.
Ewi, M. (2018, August 6). Financial crime undercuts Africa’s economic growth gains. ISS Today. Retrieved from https://issafrica.org/iss-today/financial-crime-undercuts-africas-economic-growth-gains
FIC. (2019). Typologies and case studies. Retrieved from https://www.masthead.co.za/wp-content/uploads/2019/04/TYPOLOGIES-CASE-STUDIES-MARCH-2019.pdf
G7 Leaders. (2022). G7 Leaders’ Communiqué. Retrieved from https://www.g7germany.de/g7-en/g7-documents
GFI. (2018a). Kenya: Potential revenue losses associated with trade Misinvoicing. GFI.
GFI. (2018b). Nigeria: Potential revenue losses associated with trade Misinvoicing. GFI.
GFI. (2018c). South Africa: Potential revenue losses associated with trade Misinvoicing. GFI.
Goodwin, A. (2022). Strategic organized crime risk assessment: South Africa. GI-TOC.
Gyimah-Boadi, E. (2021). What is democracy capture? In CDD-Ghana, democracy capture in Africa: Benin, Ghana, Kenya, Mozambique, Nigeria (pp. 20–32). Accra, Ghana.
Hardoon, D., & Heinrich, F. (2013). Global corruption barometer 2013. TI.
Haysom, S. (2019). The illicit tobacco trade in Zimbabwe and South Africa: Impacts and solutions. [Working paper, the Atlantic Council]. Retrieved from https://www.atlanticcouncil.org/images/publications/The_Illicit_Tobacco_Trade_in_Zimbabwe_and_South_Africa.pdf
Hellman, J., Jones, G., & Kaufmann, D. (2003). Seize the state, seize the day: State capture and influence in transition economies. Journal of Comparative Economics, 31(4), 751–773. https://doi.org/10.1016/j.jce.2003.09.006
Hellman, J., & Kaufmann, D. (2001). Confronting the challenge of state capture in transition economies. Finance & Development, 38(3), 1–8.
Hellman, J., & Kaufmann, D. (2018, August 31). State capture in transition. [Submission to the Republic of South Africa Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector Including Organs of State]. Retrieved from https://www.sastatecapture.org.za/site/files/documents/8/Bundle_of_evidence_Hellman_Kaufmann.pdf
Hendriyetty, N., & Grewal, B. S. (2017). Macroeconomics of money laundering: Effects and measurements. Journal of Financial Crime, 24(1), 65–81. https://doi.org/10.1108/JFC-01-2016-0004
Hoffmann, L. K., & Patel, R. N. (2022). Vote-selling behavior and democratic dissatisfaction in Nigeria: Is democracy really for sale? [Africa Program, Briefing Paper]. Chatham House.
Holcombe, R. G. (2013). Crony capitalism: By-product of big government. The Independent Review, 17(4), 541–559.
Hope, K. R. (2012). The political economy of development in Kenya. Bloomsbury Publishing.
Hope, K. R. (2014). Kenya’s corruption problem: causes and consequences. Commonwealth & Comparative Politics, 52(4), 493–512. https://doi.org/10.1080/14662043.2014.955981
Hope, K. R. (2017). Corruption and governance in Africa: Swaziland (Eswatini), Kenya, Nigeria. Palgrave Macmillan/Springer.
HRW. (2017). Manna from heaven? How health and education pay the Price for self-dealing in Equatorial Guinea. HRW.
IMF. (2015). Mali: Technical assistance report—Anti-corruption and anti-money laundering. IMF.
Jensen, P. S., & Justesen, M. K. (2014). Poverty and vote buying: Survey-based evidence from Africa. Electoral Studies, 33(March), 220–232. https://doi.org/10.1016/j.electstud.2013.07.020
Jöst, P., & Lust, E. (2022, August 5). Kenya’s democracy needs more than campaigns to end vote-buying: Voters attending rallies often expect to receive T-shirts, small amounts of money or other gifts. The Washington Post. Retrieved from https://www.washingtonpost.com/politics/2022/08/05/kenya-election-august9-vote-buying/
Justesen, M. K., & Bjørnskov, C. (2014). Exploiting the poor: Bureaucratic corruption and poverty in Africa. World Development, 58(June), 106–115. https://doi.org/10.1016/j.worlddev.2014.01.002
Kenny, C. (2017). Results not receipts: Counting the right things in aid and corruption. Center for Global Development.
Keulder, C. (2021). Africans see growing corruption, poor government response, but fear retaliation if they speak out. [Afrobarometer dispatch no. 488]. Retrieved from https://www.afrobarometer.org/publication/ad488-africans-see-growing-corruption-poor-government-response-fear-retaliation-if-they/
Khatri, N. (2016). Definitions of cronyism, corruption, and crony capitalism. In N. Khatri & A. K. Ojha (Eds.), Crony capitalism in India (pp. 3–7). Palgrave Macmillan.
Kimenyi, M. S., & Mbaku, J. M. (2011). Africa’s war on corruption. In Foresight Africa: The Continent’s greatest challenges and opportunities for 2011 (pp. 30–32). Brookings.
Kimeria, C., & Ngila, F. (2022, July 28). Kenya is facing a shortage of small-denomination banknotes due to voter bribery, Quartz Africa. Retrieved from https://qz.com/kenya-is-facing-a-shortage-of-small-denomination-bankno-1849341955
Kleinfeld, R. (2019). A savage order: How the World’s deadliest countries can forge a path to security. Vintage Books/Penguin Random House.
Kramon, E. (2018). Money for votes: The causes and consequences of electoral Clientelism in Africa. Cambridge University Press.
Labelle, H. (2009, September 9). Address to the ADB-OECD anti-corruption initiative for Asia and the Pacific regional seminar on political economy of corruption. Retrieved from https://www.oecd.org/site/adboecdanti-corruptioninitiative/meetingsandconferences/44442140.pdf
Leoka, T. (2017). Real-time costs of corruption: A contextual view of the south African economy. In K. Pillay (Ed.), Annual report 2017 (pp. 24–25). Corruption Watch.
Lugon-Moulin, A. (2010). Understanding state capture. Freedom from Fear, 6, 38–39. https://doi.org/10.18356/86a5d3e7-en
Maina, W. (2019). State capture: Inside Kenya’s inability to fight corruption. Africa Centre for Open Governance (AfriCOG). Retrieved from https://africog.org/wp-content/uploads/2019/05/STATE-CAPTURE.pdf
Mariotti, C., Hamer, J., & Coffey, C. (2018). Closing the divide in Malawi: How to reduce inequality and increase prosperity for all. Oxfam GB.
Martini, M. (2014). State capture: An overview. Retrieved from https://www.transparency.org/files/content/corruptionqas/State_capture_an_overview_2014.pdf
Maseko, N. (2022, June 24). South Africa’s Zondo commission: Damning report exposes rampant corruption. BBC News. Retrieved from https://www.bbc.com/news/world-africa-61912737
Mbate, M. (2018). Who bears the burden of bribery? Evidence from public service delivery in Kenya. Development Policy Review, 36(S1), 0321–0340. https://doi.org/10.1111/dpr.12311
Mbaku, J. M. (2018). Rule of law, state capture, and human development in Africa, American University International Law Review, 33(4), 4. https://digitalcommons.wcl.american.edu/auilr/vol33/iss4/4.
Meirotti, M., & Masterson, G. (Eds.). (2018). State capture in Africa: Old threats, new packaging? Electoral Institute for Sustainable Democracy in Africa.
Menard, A.-R., & Weill, L. (2016). Understanding the link between aid and corruption: A causality analysis. Economic Systems, 40(2), 260–272. https://doi.org/10.1016/j.ecosys.2016.01.001
Menocal, A. R., & Others. (2015). Why corruption matters: Understanding causes, effects and how to address them. [Evidence Paper on Corruption]. Department for International Development.
Miyandazi, L., & Ronceray, M. (2018). Understanding illicit financial flows and efforts to combat them in Europe and Africa. [Discussion Paper No. 227]. ECDPM.
Mkhabela, M. (2018). South Africa and the capture of the executive: Undermining transformation? In M. Meirotti & G. Masterson (Eds.), State capture in Africa: Old threats, new packaging? (pp. 119–130). Electoral Institute for Sustainable Democracy. in Africa.
Moyo, D. (2009). Dead aid: Why aid is not working and how there is a better way for Africa. Farrar, Straus and Giroux.
Munyai, A., & Agbor, A. A. (2020). Delineating the role of foreign governments in the fight against corruption in Africa. Cogent Social Sciences, 6(1), 1778988. https://doi.org/10.1080/23311886.2020.1778988
Mykhalchenko, N., & Wiegratz, J. (2019). Anti-fraud measures in southern Africa. Review of African Political Economy, 46(161), 496–514. https://doi.org/10.1080/03056244.2019.1660156
Mykhalchenko, N., & Wiegratz, J. (2021). Anti-fraud measures in eastern Africa. Review of African Political Economy, 48(168), 289–304. https://doi.org/10.1080/03056244.2020.1866524
Mykhalchenko, N., & Wiegratz, J. (2022). Anti-fraud measures in Western Africa and commentary on research findings across the three regions analyzed. Review of African Political Economy, 49(173), 472–486. https://doi.org/10.1080/03056244.2022.2093634
Ndikumana, L., & Boyce, J. K. (2021). Capital flight from Africa, 1970–2018: New estimates with updated trade mis-invoicing methodology. [Research Report]. Political Economy Research Institute, University of Massachusetts-Amherst.
Ndikumana, L., & Boyce, J. K. (2022a). Introduction. In L. Ndikumana & J. K. Boyce (Eds.), On the trail of capital flight from Africa: The takers and the enablers (pp. 1–9). Oxford University Press.
Ndikumana, L., & Boyce, J. K. (Eds.). (2022b). On the trail of capital flight from Africa: The takers and the enablers. Oxford University Press.
Nichter, S. (2014). Conceptualizing vote buying. Electoral Studies, 35(September), 315–327. https://doi.org/10.1016/j.electstud.2014.02.008
Nwagwu, E. J., Uwaechia, O. G., Udegbunam, K. C., & Nnamani, R. (2022). Vote buying during 2015 and 2019 general elections: Manifestation and implications on democratic development in Nigeria. Cogent Social Sciences, 8(1), 1995237. https://doi.org/10.1080/23311886.2021.1995237
OECD. (2016). Preventing corruption in public procurement. OECD.
OECD. (2018a). State-owned enterprises and corruption: What are the risks and what can be done? OECD.
OECD. (2018b). Illicit financial flows: The economy of illicit trade in West Africa. OECD.
OECD. (2022). Assessing tax compliance and illicit financial flows in South Africa. OECD Publishing.
Okonjo-Iweala, N. (2018). Fighting corruption is dangerous: The story behind the headlines. The MIT Press.
Olaniyan, K. (2004). Introductory note to African union (AU): Convention on preventing and combating corruption. International Legal Materials, 43(1), 1–4. www.jstor.org/stable/20694430
Onuoha, F. C., & Okafor, J. C. (2020). Democracy or moneyocracy? Perspective on vote buying and electoral integrity in Nigeria’s recent elections. Africa Insight, 49(4), 1–14.
OUTA. (2017). No room to hide: A President caught in the act. Retrieved from https://www.outa.co.za/wp-content/uploads/2017/06/2.-REPORT.pdf
Page, M. T. (2018). A new taxonomy for corruption in Nigeria. Carnegie Endowment for International Peace.
Peiffer, C., & Rose, R. (2018). Why are the poor more vulnerable to bribery in Africa? The institutional effects of services. The Journal of Development Studies, 54(1), 18–29. https://doi.org/10.1080/00220388.2016.1257121
Poisson, M. (2016). Public expenditure tracking surveys: Lessons from experience. The IIEP Letter, 32(1), 8–9.
PPSA. (2016). The state of capture: A report of the public protector. PPSA.
Pring, C. (2015). People and corruption: Africa survey 2015−global corruption barometer. TI.
Pring, C. (2017). People and corruption: Citizens’ voices from around the world−global corruption barometer. TI.
Pring, C., & Vrushi, J. (2019). Global corruption barometer Africa 2019: Citizens’ views and experiences of corruption. TI.
PwC. (2018). Global economic crime and fraud survey 2018. Retrieved from https://www.pwc.com/gx/en/forensics/global-economic-crime-and-fraud-survey-2018.pdf
Ramaphosa, C. (2022, June 22). Statement at the handover of the final part of the state capture commission report, Pretoria, South Africa. Retrieved from https://www.gov.za/speeches/president-cyril-ramaphosa-handover-final-part-state-capture-commission-report-22-jun-2022
Refinitiv. (2018). Revealing the true cost of financial crime–2018 survey report: Focus on sub-Saharan Africa. Retrieved from http://images.financial-risk-solutions.thomsonreuters.info/Web/ThomsonReutersFinancialRisk/%7B856ab4d8-e758-45fa-9855-0413693a084f%7D_17DD_Regional_Report_Sub-Saharan_Africa_v8.pdf
Refinitiv. (2021). Financial crime in sub-Saharan Africa 2021. Retrieved from https://www.refinitiv.com/content/dam/marketing/en_us/documents/gated/reports/re1362546-risk-fc-ssa-1920x1080-v6.pdf
Saddiq, S. A., & Abu Bakar, A. S. (2019). Impact of economic and financial crimes on economic growth in emerging and developing countries: A systematic review. Journal of Financial Crime, 26(3), 910–920. https://doi.org/10.1108/JFC-10-2018-0112
SARB. (2021). South African reserve bank imposes administrative sanctions on Deutsche Bank AG-Johannesburg Branch. Retrieved from https://www.resbank.co.za/content/dam/sarb/publications/media-releases/2021/administrative-sanctions-pa-march-2021/South%20African%20Reserve%20Bank%20imposes%20administrative%20sanctions%20on%20Deutsche%20Bank%20AG%20Johannesburg%20Branch.pdf
Smith, J., & Lee, K. (2018). From colonization to globalization: A history of state capture by the tobacco industry in Malawi. Review of African Political Economy, 45(156), 186–202. https://doi.org/10.1080/03056244.2018.1431213
Songwe, V. (2018, January 25). Statement on the theme winning the fight against corruption: A sustainable path to Africa’s transformation, 30th AU summit, 32nd ordinary session of the AU executive council, Addis Ababa. Retrieved from https://au.int/en/speeches/20180125/statement-vera-songwe-united-nations-under-secretary-general-and-executive
TI. (2017). No sustainable development without tackling corruption: The importance of tracking SDG16. Retrieved from https://www.transparency.org/news/feature/no_sustainable_development_without_tackling_corruption_SDG_16
TI-Kenya. (2017). The east African bribery index 2017. TI-Kenya.
TI-Kenya. (2020). Kenya bribery index 2019. TI-Kenya.
TI-Zimbabwe. (2022). Zimbabwe bribe payers index 2021: The dynamics of bribery within Zimbabwe’s public sector. TI-Zimbabwe.
Ufere, N., Gaskin, J., Perelli, S., Somers, A., & Boland, R. (2020). Why is bribery pervasive among firms in sub-Saharan African countries? Multi-industry empirical evidence of organizational isomorphism. Journal of Business Research, 108(January), 92–104. https://doi.org/10.1016/j.jbusres.2019.09.060
UN. (2005). Economic and financial crimes: Challenges to sustainable development. UN.
UN. (2019). Corruption and the sustainable development goals. In World public sector report 2019: Sustainable development goal 16: Focus on public institutions (Vol. chapter 2, pp. 39–83). UN.
UNCTAD. (2020). Economic development in Africa report 2020: Tackling illicit financial flows for sustainable development in Africa. UN.
UNCTAD., & UNODC. (2020). Conceptual framework for the statistical measurement of illicit financial flows. UNODC.
UNECA. (2018). A study on the global governance architecture for combating illicit financial flows. UNECA.
UNECA. (2021a). Economic governance report I: Institutional architecture to address illicit financial flows. UNECA.
UNECA. (2021b). Governance of state-owned Enterprises in South Africa: Enhancing performance, efficiency and service delivery. UNECA.
UNODC. (2022). Corruption in Ghana–People’s experiences and views. UNODC.
UNODC., & NBS. (2019). Corruption in Nigeria: Patterns and trends: Second survey on corruption as experienced by the population. UNODC.
Vanguard. (2018, January 25). Africa loses $148b to corruption annually. Vanguard. Retrieved from https://www.vanguardngr.com/2018/01/africa-loses-148b-corruption-annually/
Vashisht, V. (2017). Cash, corruption and economic development. Routledge.
WIN. (2016). Water integrity global outlook 2016. WIN.
World Bank. (n.d.). Enterprise surveys: Corruption. Retrieved from http://www.enterprisesurveys.org/data/exploretopics/corruption#all-countries
World Bank. (2017). Brief: Combating corruption. Retrieved from http://www.worldbank.org/en/topic/governance/brief/anti-corruption
Yikona, S., Slot, B., Geller, M., Hansen, B., & el Kadiri, F. (2011). Ill-gotten money and the economy: Experiences from Malawi and Namibia. World Bank.
Yoon, M. Y. (2020). Voters’ perceptions of gender differences in vote buying: The case of Tanzania. Africa Spectrum, 55(2), 125–147. https://doi.org/10.1177/2F0002039720957010
Zondo Commission. (2022). Report: Part VI: Vol. 4: Summary of recommendations. Zondo Commission.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Hope, K.R. (2023). Channels of Corruption in Africa: An Analytical Review and Assessment of Trends in Economic and Financial Crimes. In: Corruption, Sustainable Development and Security Challenges in Africa. Advances in African Economic, Social and Political Development. Springer, Cham. https://doi.org/10.1007/978-3-031-32229-7_3
Download citation
DOI: https://doi.org/10.1007/978-3-031-32229-7_3
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-031-32228-0
Online ISBN: 978-3-031-32229-7
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)