How banks assist capital flight from Africa - A literature review

How Banks Assist Capital Flight from Africa

In this new literature study by Heggstad and Fjeldstad (at CMI), the role of banks in capital flight from Africa is explored and how much needed public finances are hidden abroad. Systematic studies of the banking sector’s involvement in facilitating capital flight from developing countries are limited. This paper was commissioned by Norad’s Anti‐Corruption Project (ANKOR) for the purpose of summarising key lessons from the existing literature and to identify knowledge gaps. The study is a desk study, based on a review of library and online literature databases and reports and documentation from national and international organisations. It concludes with a number of targeted policy advice for various actors relevant to address some of the dynamics connected with capital flight.

The study addresses five main questions:

1. What literature exists on the role of banks in capital flight from Africa?
2. What are the main focus areas of the available literature?
3. What are the most common methods for banks to channel illicit financial flows?
4. Which institutions and actors are currently addressing the issues?
5. Which knowledge gaps can be identified through the literature review?