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RESERVE Bank of Zimbabwe Governor Dr John Mangudya this week revealed that illicit financial outflows have this year cost Zimbabwe more than $500 million. What is disheartening is that this figure is more than what Zimbabwe attracted in foreign direct investments last year. Generally, beyond the damaging economic impact of the overall capital outflows, illicit financial flows have a subversive impact on governments and society. They foster corruption, undermine governance and decrease tax revenues.

In a country experiencing liquidity crisis, efforts should be made to curb illegal cross border movement of money. While Government is putting in place efforts to attract foreign direct investment that will in turn help boost liquidity, it is worrying that millions of dollars find their way out of our borders through illicit means.

Dr Mangudya revealed that the funds were moved through an intricate web involving some companies and individuals. Under the web, which is criminal to say the least, the funds are moved from company accounts into individual accounts and then moved out of the country.

We understand challenges the country may encounter in trying to curb the illicit outflows considering we do not control the global financial systems. But we urge authorities to put in place measures within their capacity to curb the illicit activities.

We are pleased to note that the monetary authorities are dealing with it. According to a study, the most effective way to limit illicit financial flows is to increase financial transparency. This includes detecting and deterring cross border tax evasion, strengthening anti-money laundering laws and practices; curtailing trade misinvoicing and improving the transparency of foreign-owned businesses. But while Government is dealing with the cancer, Zimbabweans themselves must change their attitude. At a time when Zimbabwe is in dire need of money, it is unthinkable that some individuals are channelling funds out of the country though illegal means.

Where loopholes are observed, we must close them urgently. More importantly, we need all stakeholders to play an important role in fighting this kind of corruption. It may also be pertinent for us to ensure that banks are not found to be complicit in this illegality. It is high time we improved our foreign exchange management systems.

Zimbabwe is not the only country which has been losing huge sums of money through illicit means, but Africa as a whole. The African Union High Level Panel on Illicit Financial Flows and the UN Economic Commission for Africa presented a report during the 24th African Union Summit, which was adopted by the African Heads of State and government.

According to the panel report, it is estimated that the continent loses between $30 billion to $60 billion in illicit financial flows annually. It is understood that the continent could have lost more than $1 trillion in the last 50 years in illicit financial flows.

That is estimated to be more than foreign direct investment and official development aid combined. According to reports, citing former South African president Thabo Mbeki, Africa could have managed to reduce the deaths of children under five next year, if governments had stepped in at the turn of the millennium and stopped illicit capital outflows from the continent.

That being synonymous with other Africa countries, collaborated efforts at continental level become of paramount importance to curb the illegal transfers of money.