Africa Grapples with Growing Illicit Financial Flows Threatening Stability and Development

Africa faces a mounting crisis of illicit financial flows, with many countries on the continent acting as sources, transit hubs, or destinations for these illegal movements of capital. According to the Global Initiative against Transnational Organised Crime (GI-TOC), such flows undermine economic stability, fuel corruption, and sustain organised crime, generating harms that extend far beyond national borders. The report notes that these illicit flows often penetrate international financial and trade hubs due to their inherently transnational nature, with state-embedded actors, private sector participants, non-state armed groups, and criminal organisations all playing roles in generating and moving the funds. Periods of political transition, especially elections, are identified as particularly high-risk moments, as actors compete for power and rent extraction. Foreign actors also exploit Africa’s economic vulnerabilities, embedding themselves in resource-rich regions through covert financial networks.

According to the United Nations Economic Commission for Africa (UNECA) and Ghana’s Financial Intelligence Centre (FIC), the continent loses more than $88.6 billion annually to illicit financial flows. The 2025 Global Organised Crime Index highlights that financial crimes are the most pervasive criminal markets in Africa, followed by human trafficking, crimes related to non-renewable resources, trade in counterfeit goods, and arms trafficking. Countries such as the Democratic Republic of the Congo (7.47), South Africa (7.43), Nigeria (7.32), and Kenya (7.18) scored highest in Africa, indicating elevated levels of organised crime and vulnerability. While poverty, inequality, and climate change exacerbate crime rates, safety levels vary significantly across the continent, with some nations among the safest globally.

GI-TOC’s report emphasises that large-scale scandals frequently rely on professional intermediaries to move illicit funds through complex financial transactions and business structures. Networks of lawyers, accountants, and corporate service providers are instrumental in transferring proceeds from African markets to international financial centres. “For example, professional money laundering networks have been instrumental in transferring substantial illicit funds on behalf of southern African organised crime syndicates to foreign destinations that include Hong Kong and Dubai. These syndicates are involved in markets such as gold, tobacco, drugs, and human trafficking,” the report states. In East Africa, legal professionals have facilitated the creation of shell companies in Nairobi, Dar es Salaam, and Kampala to perpetrate fraudulent gold schemes targeting foreign investors. Lawyers collaborating with bureaucrats and international actors have provided legal cover, invoked professional privilege, and acted as nominees, defrauding investors of hundreds of millions of dollars. Their professional credibility has been misused to obscure contracts and mislead victims.

Beyond law firms, front companies are routinely deployed to integrate illicit funds into real estate, construction, and the trade in precious metals and stones. Accountants, law firms, real estate developers, construction firms, and casinos are implicated, sometimes knowingly and sometimes due to regulatory blind spots. Precious metal and stone dealers, particularly scrap metal traders, are highlighted as major risk groups, serving as intermediaries in gold and other mineral markets. Intelligence on illicit financial flows in the real estate sector remains largely anecdotal due to limited data; however, the sector is considered ‘high risk’ due to cash-based, high-value transactions and opacity around beneficial ownership, which allows criminals to conceal assets, launder funds, and increase property value through cash-paid renovations and resales.

The construction industry in Africa is increasingly entwined with illicit finance, driven by high-value transactions, cash reliance, and limited regulatory oversight. In 2023, the Action Group against Money Laundering in Central Africa identified construction as Chad’s top laundering risk. Kenya’s Business Registration Service reported that more than half of the companies flagged for money laundering in 2024 were in the construction sector. In South Africa, gangs in the Cape have exploited construction tenders heavily. Gang leader Ralph Stanfield and local government official Malusi Booi were arrested in 2025 and charged in connection with fraudulent construction tenders alleged to have been used to launder proceeds from organised crime.

Trade also serves as a major conduit for illicit finance, facilitated by weak regulatory oversight, porous borders, and the misuse of legitimate systems. Airports, ranging from major international hubs to small private airstrips, are increasingly used by criminal networks to move gold, cash, and drugs, taking advantage of weak oversight, inadequate cargo checks, and the rapid growth of private aviation across Africa. Gold trading is highlighted as a significant channel for illicit finance, shaped by geopolitical, economic, and governance vulnerabilities, with supply chains often captured by state and political actors, driving corruption and criminalisation. “Seaports and the growing number of Free Trade Zones (FTZs) and Special Economic Zones (SEZs) also provide opportunities for criminal networks to move commodities with limited scrutiny,” the report reads.

Willem Els, Senior Training Co-ordinator at the Institute for Security Studies, said illicit finance is crippling Africa’s economies, emphasising that governments must address the involvement of state-embedded actors to tackle the problem effectively. Els highlighted that the role of state-embedded actors in criminal activity is also being examined by the ongoing Madlanga Commission of Inquiry and the Parliament Ad Hoc Committee in South Africa, which are investigating alleged criminal infiltration and corruption within the country’s criminal justice system, particularly within the police service.

The GI-TOC report paints a stark picture of how illicit financial flows, facilitated by professional networks and exploiting systemic vulnerabilities, are undermining development, governance, and stability across Africa, with both domestic and international actors complicit in perpetuating these transnational crimes.

By fLEXI tEAM