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

This briefing examines the relationship between de-risking, illicit financial flows (IFFs), and capital flows within African regional economic hubs, emphasizing the need for regulatory frameworks that maintain financial integrity without compromising inclusion.

• De-risking of regional economic hubs significantly impacts developmental outcomes for both the hub and its integrated spoke countries. To mitigate the risk of illicit financial flows (IFFs) and the resulting negative effects on capital flows, the document argues for the implementation of adequate regulatory frameworks that ensure financial integrity while supporting inclusion.
• Capital flows—comprising official development assistance, grants, loans, bank and trade-related lending, foreign direct investment (FDI), portfolio investments, and workers’ remittances—are critical for economic development, job creation, and long-term growth. In sub-Saharan Africa between 2000 and 2017, FDI, foreign aid, and remittances contributed an average of 3.4%, 3.3%, and 2.3% to regional GDP, respectively. These flows are influenced by the perceived risk of IFFs, and regional economic hubs can facilitate the regionalization 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} }