De-risking in Africa: Illicit Financial Flows and Regional Economic Hubs

The document discusses how the perceived risk of illicit financial flows (IFFs) leads to de-risking in regional economic hubs, which negatively impacts capital flows and developmental outcomes for both hubs and integrated spoke countries. It emphasizes the need for regulatory frameworks that ensure financial integrity without undermining financial inclusion.

• De-risking in regional economic hubs significantly impacts developmental outcomes for both the hub and the associated spoke countries. To mitigate the risk of illicit financial flows (IFFs) and the resulting negative effects on capital flows, regulatory frameworks must be established to maintain financial integrity while supporting inclusion.
• Capital flows—including foreign direct investment (FDI), foreign aid, and remittances—are critical for African economic development, supporting job creation, technology transfer, and government budgets. Between 2000 and 2017, FDI averaged 3.4% of sub-Saharan Africa's regional GDP, while foreign aid and remittances averaged 3.3% and 2.3% respectively. However, these flows are influenced by the perceived risk of IFFs, and regional economic hubs can facilitate the regionalisation of these illicit flows.

APA

FSD Africa (2020). De-risking in Africa: Illicit Financial Flows and Regional Economic Hubs. https://fsdafrica.org/publication/de-risking-in-africa-illicit-financial-flows-and-regional-economic-hubs/

Chicago

FSD Africa. De-risking in Africa: Illicit Financial Flows and Regional Economic Hubs. 2020. https://fsdafrica.org/publication/de-risking-in-africa-illicit-financial-flows-and-regional-economic-hubs/.

Wikipedia

{{cite report |author=FSD Africa |title=De-risking in Africa: Illicit Financial Flows and Regional Economic Hubs |date=9 October 2020 |url=https://fsdafrica.org/publication/de-risking-in-africa-illicit-financial-flows-and-regional-economic-hubs/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafrica2020derisking, author = {{FSD Africa}}, title = {{De-risking in Africa: Illicit Financial Flows and Regional Economic Hubs}}, institution = {FSD Africa}, year = {2020}, month = oct, url = {https://fsdafrica.org/publication/de-risking-in-africa-illicit-financial-flows-and-regional-economic-hubs/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }