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Botswana ranked 46th on illicit money flows


Botswana has ranked 46th out of 151 countries on the Global Financial Integrity (GFI) illicit financial outflow estimates.


Illicit financial flows (IFFs) are illegal movements of money or capital from one country to another. GFI classifies this movement as an illicit flow when the funds are illegally earned, transferred or utilized.


In 2012, illicit outflows were estimated at US$1,48 million (about N$17 million) according to a report issued this week by the GFI.


Botswana is ranked 46th with illegal flows at US$1,92 million. South Africa ranks in the top 10 with illicit outflows amounting to US$29 million while Namibia ranked 56th. Nigeria is ranked 17th with outflows amounting to US$7,9 million while Zambia is ranked 28th with outflows amounting to US$4,2 million.


Lesotho is ranked 76th with outflows US$506 000 while the Democratic Republic of the Congo is 98th with outflows amounting to US$148 000.


GFI said nearly US$1 trillion was illicitly drained from developing countries in 2012, representing a record level of corruption, money laundering and false trade documentation.


Illicit financial flows around the world grew at 9,4 percent a year in the decade to 2012, around double the pace of economic growth, draining funds especially from impoverished countries.


The largest outflows came from giant, still poorly-regulated economies like Brazil, China, India and Russia, GFI's new report says.


Money illicitly streamed out of China at a rate of about US$125 billion annually over that period, for instance.


But also in the top 10 country sources of illegal capital outflows are a number of dynamic middle-sized economies: Malaysia, Mexico, Saudi Arabia and Thailand.


Mexico is third on the list of largest outflows at an average US$54 billion a year.


In total, the report put the total illegal capital movements from developing and emerging economies in 2012 at US$991,2 billion, greater than the combined sum of incoming foreign investment and foreign aid in those countries.


“Emerging and developing countries haemorrhaged a trillion US dollars from their economies in 2012 that could have been invested in local businesses, healthcare, education, or infrastructure,” said the study's co-author, economist Joseph Spanjers.
“This is a trillion dollars that could have contributed to inclusive economic growth, legitimate private-sector job creation and sound public budgets.”


Over a decade, the total was US$6,6 trillion, the equivalent of nearly 4 percent of the entire global economy. In terms of the relative size of the impact, the countries hurt most by the flows were in the Middle East and North Africa and in Sub-Saharan Africa.


The main way the money flows out of the countries is mis-invoicing in trade transactions, which can allow exporters and imports to keep money out of the country.


GFI said individual countries and the United Nations need to focus on cutting down such flows to fight poverty and boost growth.


“It is simply impossible to achieve sustainable global development unless world leaders agree to address this issue head-on,” said GFI president Raymond Baker.


“That's why it is essential for the United Nations to include a specific target next year to halve all trade-related illicit flows by 2030 as part of post-2015 Sustainable Development Agenda.”

Some examples of illicit financial flows might include:

•A drug cartel using trade-based money laundering techniques to mix legal money from the sale of used cars with illegal money from drug sales;

 •An importer using trade mis-invoicing to evade customs duties, VAT, or income taxes;

 •A corrupt public official using an anonymous shell company to transfer dirty money to a bank account in the United States;

 •An human trafficker carrying a briefcase of cash across the border and depositing it in a foreign bank; or

•A terrorist wiring money from the Middle East to an operative in Europe.


 GFI estimates that in 2011, US$946.7 billion left developing countries in illicit financial outflows. This methodology is regarded as highly conservative, as it does not pick up movements of bulk cash, the mispricing of services, or many types of money laundering.


What be done about illicit financial flows
GFI believes that the most effective way to limit illicit financial flows is to increase financial transparency. Their conviction is that the GFI believes that we should enact policies to detect and deter cross-border tax evasion, to eliminate anonymous shell companies, to strengthen anti-money laundering laws and practices, to work to curtail trade mis-invoicing; and improve transparency of multinational corporations.

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Masisi to dump Tsogwane?

28th November 2022

Botswana Democratic Party (BDP) and some senior government officials are abuzz with reports that President Mokgweetsi Masisi has requested his Vice President, Slumber Tsogwane not to contest the next general elections in 2024.

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African DFIs gear to combat climate change

25th November 2022

The impacts of climate change are increasing in frequency and intensity every year and this is forecast to continue for the foreseeable future. African CEOs in the Global South are finally coming to the party on how to tackle the crisis.

Following the completion of COP27 in Egypt recently, CEOs of Africa DFIs converged in Botswana for the CEO Forum of the Association of African Development Finance Institutions. One of the key themes was on green financing and building partnerships for resource mobilization in financing SDGs in Africa

A report; “Weathering the storm; African Development Banks response to Covid-19” presented shocking findings during the seminar. Among them; African DFI’s have proven to be financially resilient, and they are fast shifting to a green transition and it’s financing.

COO, CEDA, James Moribame highlighted that; “Everyone needs food, shelter and all basic needs in general, but climate change is putting the achievement of this at bay. “It is expensive for businesses to do business, for instance; it is much challenging for the agricultural sector due to climate change, and the risks have gone up. If a famer plants crops, they should be ready for any potential natural disaster which will cost them their hard work.”

According to Moribame, Start-up businesses will forever require help if there is no change.

“There is no doubt that the Russia- Ukraine war disrupted supply chains. SMMEs have felt the most impact as some start-up businesses acquire their materials internationally, therefore as inflation peaks, this means the exchange rate rises which makes commodities expensive and challenging for SMMEs to progress. Basically, the cost of doing business has gone up. Governments are no longer able to support DFI’s.”

Moribame shared remedies to the situation, noting that; “What we need is leadership that will be able to address this. CEOs should ensure companies operate within a framework of responsible lending. They also ought to scout for opportunities that would be attractive to investors, this include investors who are willing to put money into green financing. Botswana is a prime spot for green financing due to the great opportunity that lies in solar projects. ”

Technology has been hailed as the economy of the future and thus needs to be embraced to drive operational efficiency both internally and externally.

Executive Director, bank of Industry Nigeria, Simon Aranou mentioned that for investors to pump money to climate financing in Africa, African states need to be in alignment with global standards.

“Do what meets world standards if you want money from international investors. Have a strong risk management system. Also be a good borrower, if you have a loan, honour the obligation of paying it back because this will ensure countries have a clean financial record which will then pave way for easier lending of money in the future. African states cannot just be demanding for mitigation from rich countries. Financing needs infrastructure to complement it, you cannot be seating on billions of dollars without the necessary support systems to make it work for you. Domestic resource mobilisation is key. Use public money to mobilise private money.” He said.

For his part, the Minster of Minister of Entrepreneurship, Karabo Gare enunciated that, over the past three years, governments across the world have had to readjust their priorities as the world dealt with the effects and impact of the COVID 19 pandemic both to human life and economic prosperity.

“The role of DFIs, during this tough period, which is to support governments through countercyclical measures, including funding of COVID-19 related development projects, has become more important than ever before. However, with the increasingly limited resources from governments, DFIs are now expected to mobilise resources to meet the fiscal gaps and continue to meet their developmental mandates across the various affected sectors of their economies.” Said Gare.

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TotalEnergies Botswana launches Road safety campaign in Letlhakeng

22nd November 2022

Letlhakeng:TotalEnergies Botswana today launched a Road Safety Campaign as part of their annual Stakeholder Relationship Management (SRM), in partnership with Unitrans, MVA Fund, TotalEnergies Letlhakeng Filling Station and the Letlhakeng Sub District Road Safety Committee during an event held in Letlhakeng under the theme, #IamTrafficToo.

The Supplier Relationship Management initiative is an undertaking by TotalEnergies through which TotalEnergie annually explores and implements social responsibility activities in communities within which we operate, by engaging key stakeholders who are aligned with the organization’s objectives. Speaking during the launch event, TotalEnergies’ Operations and HSSEQ,   Patrick Thedi said,  “We at TotalEnergies pride ourselves in being an industrial operator with a strategy centered on respect, listening, dialogue and stakeholder involvement, and a partner in the sustainable social and economic development of its host communities and countries. We are also very fortunate to have stakeholders who are in alignment with our organizational objectives. We assess relationships with our key stakeholders to understand their concerns and expectations as well as identify priority areas for improvement to strengthen the integration of Total Energies in the community. As our organization transitions from Total to Total Energies, we are committed to exploring sustainable initiatives that will be equally indicative of our growth and this Campaign is a step in the right direction. ”

As part of this campaign roll out, stakeholders  will be refurbishing and upgrading and installing road signs around schools in the area, and generally where required. One of the objectives of the Campaign is to bring awareness and training on how to manage and share the road/parking with bulk vehicles, as the number of bulk vehicles using the Letlhakeng road to bypass Trans Kalahari increases. When welcoming guests to Letlhakeng, Kgosi Balepi said he welcomed the initiative as it will reduce the number of road incidents in the area.

Also present was District Traffic Officer ASP, Reuben Moleele,  who gave a statistical overview of accidents in the region, as well as the rest of the country. Moleele applauded TotalEnergies and partners on the Campaign, especially ahead of the festive season, a time he pointed out is always one with high road statistics. The campaign name #IamTrafficToo, is a reminder to all road users, including pedestrians that they too need to be vigilant and play their part in ensuring a reduction in road incidents.

The official proceedings of the day included a handover of reflectors and stop/Go signs to the Letlhakeng Cluster from TotalEnerigies, injury prevention from tips from MVA’s Onkabetse Petlwana, as  well as  bulk vehicle safety tips delivered from Adolf Namate of Unitrans.

TotalEnergies, which is committed to having zero carbon emissions by 2050,  has committed to rolling out the Road safety Campaign to the rest of the country in the future.

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