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Corruption cost SA R185bn, says report

By Anton Ferreira | Apr 21, 2010 | COMMENTS [ 0 ]

SOUTH Africa has suffered a staggering outflow of about R185billion in illegal money since 1994 due to corruption in the private and public sectors.

That's according to a report by a non-profit research group in Washington, Global Financial Integrity, which monitors cross-border flows of illicit cash around the world.

The report named South Africa as having the fifth highest illicit financial outflow in Africa - $25billion between 1994 and 2008 - after Nigeria, Egypt, Algeria and Morocco.

Treasury spokesperson Lindani Mbunyuza said the Treasury was aware of the report but was still studying it.

Devon Cartwright-Smith, one of the authors of the report, said the figures were based on "plain view" statistics from the World Bank and International Monetary Fund.

They took no account of activities like smuggling and money laundering, so the true figure was likely to be much higher, he said.

The $25-billion was arrived at by comparing South Africa's sources of funds, such as external debt, with its internal use of funds; and by comparing the recorded value of its exports with what the rest of the world reported importing from South Africa.

In both cases there were significant gaps, representing illegally transferred funds.

He said South Africa's ranking among the top five was not unexpected "because it has a history of corruption, and it's one of the larger economies so there's just a lot more money flowing in and out".

The report said total known illicit outflows for the whole of Africa amounted to at least $854billion (about R6,3trillion) for the period 1970 to 2008, but the real figure could be $1,8trillion (about R13trillion).

"This staggering loss of capital seriously hampers Africa's efforts at poverty alleviation and economic development," the report said.


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