According to reports by Global Financial Integrity (GFI), Kenya loses more than KSh 100 billion annually through trade-related IFFs. These losses undermine public investment in critical areas like healthcare, education, and infrastructure.
In 2021, a leaked set of documents known as the Pandora Papers revealed how influential Kenyan politicians had stashed wealth in offshore accounts, some allegedly worth millions of dollars. These secret holdings often raise red flags about tax avoidance and the potential laundering of proceeds from corruption.
“The impact of IFFs on the everyday Kenyan is profound. Every shilling lost to illicit flows is a shilling not spent on roads, medicines, clean water, or education. The result is a cycle of underdevelopment where the poor pay the price for the elite’s financial impunity,” said Grace Mburu, an Anti-Financial Crimes Specialist at Flywheel Advisory.
According to the United Nations Economic Commission for Africa (UNECA), Africa as a continent loses up to $88.6 billion every year to IFFs, more than what it receives as development assistance.
Illicit money flows out of Kenya through several well-documented methods, including: Trade misinvoicing, Offshore accounts, Real estate laundering, Cash smuggling and Mobile money laundering with the use of digital wallets to move and disguise small sums frequently.
“Tackling illicit financial flows in Kenya requires a multi-pronged approach in strengthening regulation and enforcement by funding watchdog institutions and shielding them from political interference,” said Mburu.
She noted that by enhancing transparency and closing trade loopholes, this will reduce misreporting and manipulation. Mburu added that whistleblowers and journalists should also be protected in the process of exposing financial crimes.
