Fighting money laundering

This research paper examines the structural and capacity constraints that hinder the implementation of anti-money laundering and combating the financing of terrorism (AML/CFT) measures in Africa, particularly in sub-Saharan Africa. The author argues that global standards often fail to account for the continent's predominantly cash-based economies and informal financial systems, necessitating context-sensitive solutions rather than a 'one-size-fits-all' approach.

• Money laundering and organized crime significantly hinder African development by eroding social and human capital, increasing business costs, and undermining state capacity. These activities fuel corruption, which further weakens enforcement and creates a 'vicious circle' that can exacerbate distrust in democratic and financial institutions.
• The placement stage of money laundering—introducing illicit proceeds into the financial system—is less common in Africa because the financial sector is underdeveloped and cash transactions are the dominant method of exchange.
• African financial institutions are vulnerable to money laundering and terrorist financing due to their relative immaturity and small size, which may lead them to be less selective in their business dealings to maximize opportunities in competitive markets.
• The prevalence of informal banking and alternative remittance systems in Africa provides high anonymity that can be abused by criminals. However, the author notes that strictly regulating these systems could harm local economies that rely on them, suggesting instead the long-term development of supervised, inexpensive alternatives.
• International AML/CFT obligations, such as the FATF 40+9 Recommendations, are often too complex for low-income African countries with limited resources and weak legal institutions. The author argues that the current 'yardstick' for compliance is unrealistic as it ignores systemic constraints like extreme poverty and lack of skilled human capital.
• Cross-border cash movement is common and relatively easy in Africa, making the implementation of compulsory declaration systems difficult and potentially counterproductive. Such systems risk increasing corruption and disrupting legitimate small-scale international trade that lacks banking support.
• Effective AML/CFT strategies in Africa must integrate financial sector supervision with broader law enforcement and prosecution capacity. Focusing solely on technical compliance with international regimes without addressing the underlying justice and security reforms is described as 'misguided'.

APA

Moshi, H. P. B. (2007). Fighting money laundering. Institute for Security Studies. https://issafrica.s3.amazonaws.com/site/uploads/Paper152.pdf

Chicago

Moshi, Humphrey P B. Fighting money laundering. Institute for Security Studies, 2007. https://issafrica.s3.amazonaws.com/site/uploads/Paper152.pdf.

Wikipedia

{{cite report |last1=Moshi |first1=Humphrey P B |title=Fighting money laundering |publisher=Institute for Security Studies |date=October 2007 |url=https://issafrica.s3.amazonaws.com/site/uploads/Paper152.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{moshi2007fighting, author = {Moshi, Humphrey P B}, title = {{Fighting money laundering}}, institution = {Institute for Security Studies}, year = {2007}, month = oct, url = {https://issafrica.s3.amazonaws.com/site/uploads/Paper152.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }