According to the African Development Bank (AfDB), corruption and illegal financial outflows cost the continent about $580 billion annually, undermining its economic development and making its debt problems worse.
In a Bloomberg interview, AfDB President Akinwumi Adesina noted that despite Africa’s total debt load approaching $2 trillion, the losses are so great that they exceed the continent’s capacity to fund infrastructure and growth.
“It doesn’t matter how much water you pour into a bucket if the bucket is leaking. If you’re able to reduce the leakages to illicit capital, also corruption and all of these things, Africa will be able to keep a lot of these resources and meet the amount of infrastructure it needs,” Adesina stated.
Daily loss of $1.6 billion
According to the African Development Bank, “financial leakages” cost Africa over $1.6 billion every day. This comprises $148 billion syphoned off as a result of corruption, $275 billion lost through profit-shifting by multinational firms, and $90 billion in illicit financial flows annually.
• These losses occur while the continent struggles with an annual infrastructure finance deficit of up to $170 billion, which needs to be filled if Africa is to spur economic expansion and generate employment for its young people.
• Many African governments are overburdened by the rising expenses of debt repayment rather than investing in such initiatives. A new joint analysis by the Institute for Economic Justice and the Boston University Global Development Policy Centre states that, debt servicing in Africa has increased to its highest level since the debt crisis of the early 2000s.
• It is shocking to see that interest payments now account for more than half of African nations’ spending on public healthcare.
While debt restructuring and concessional financing are vital, Adesina emphasised that the most critical step in protecting Africa’s resources and lowering its dependency on debt is still preventing corruption and illegal outflows.
In its recently published 2025 African Economic Outlook, the AfDB voiced alarm over Nigeria’s growing debt expenditures, estimating that in 2025, interest payments will account for 75% of the nation’s income.
If a significant portion of a nation’s income is allocated to debt service payments, the Bank claims that even a low debt-to-GDP ratio might result in a high debt load.
Although several African nations saw a decrease in debt levels in 2022–2023, the AfDB added, this trend is still precarious because of favourable interest-growth differentials. “Recent gains could be reversed by a slowdown in economic growth or an increase in interest rates,” the Bank said. Furthermore, development could be hampered by careless fiscal behaviour and excessive borrowing, particularly on commercial terms.
