Financial Intelligence Center Striving to Curb Illicit Financial Flow


 Addis Abeba October 15/2020 (ENA) Ethiopian Financial Intelligence Center (EFIC) said it has been reinforcing efforts to sustainably deal with illicit financial flows and ensure healthy financial transactions. 

EFIC Communication Director, Endale Tesfaye told ENA that Ethiopia had strategic gaps that hampered it from tackling illegal financial flows which encourage terrorism and money laundering.

He noted that illicit financial flows have become a pressing issue and obstacle for development. The center has, therefore, been cooperating with domestic and international stakeholders to deter illegal activity.  

The director admitted that “there has been lack of strategic support to put an end to money laundering and counter-terrorism financing. This has brought about a direct negative impact, especially in foreign direct investment and effectiveness of trade facilitating activities.”  

An estimated 1.3 to 3.2 billion USD million has left Ethiopia between 2005 and 2014 every year, which is equivalent to 11 percent to 29 percent of the country’s total trade, according to Global Financial Integrity (GFI).

Similarly, an estimated 88.6 USD billion, equivalent to 3.7 percent of Africa’s GDP, leaves the continent annually as illicit capital flight, UNCTAD’s Economic Development in Africa Report 2020 stated.

In the case of Ethiopia, this is highly undermining the economic development of the country, he  noted.

“By nature, the illicit financial flow is a highly transnational organized crime. Trafficking and stolen assets have always been critical issues to address, and it has a wider-angle impacts. That is why the Ethiopian Financial Intelligence Center is reinforcing a joint effort with regional and global stakeholder to minimize the effects of illicit financial flow,” Endale elaborated.

According to the director, the recent currency notes change is an important step to transform the cash-based economy. “This is really a great move to prevent crime, tax evasion, and counterfeiting as those activities remain major challenges in Ethiopia.” 

President of the private-owned Dashen Bank, Assefa Alemu agreed on the importance of the new currency notes that are now in use. They will effectively facilitate the market and the financial system of the country.

The currency change would enable to recover cash and allocate it in the productive economic sector since the Ethiopian economy is still cash-based and there is huge amount of money out of banks, he added.

Beyond economy, this huge amount of money can be used for unwanted illegal activities and crime.

The president said “ there is so much money out of the bank system. This means that there is a high risk for the country’s economy; and the money is not coming back to the banks. This is harmful to the economy. Banks should now mobilize the money and move it to the scarce and productive economy sector.”