Tackling Illicit Financial Flows in Zambia: A Call for Systemic Reform

Illicit financial flows (IFFs) remain a persistent threat to Zambia’s economic stability and development, siphoning resources that could otherwise fund critical social services, infrastructure, and healthcare. This article examines the various channels through which IFFs occur in Zambia, such as trade mis-invoicing, tax evasion, corruption, and weak regulatory frameworks. A particular focus is given to Zambia’s mining sector, where opaque agreements and underreported revenues exacerbate revenue loss. Drawing on insights from international organizations like the World Bank, African Development Bank (AfDB), and UNCTAD, the article highlights the adverse impacts of IFFs on the economy, including constrained fiscal space and heightened national debt. Proposed measures include strengthening transparency, enforcing anti-money laundering standards, and improving tax compliance through technical assistance and institutional reforms. This call for systemic reform underlines the urgency for Zambia to implement comprehensive strategies to curtail IFFs, thus fostering a more equitable and resilient economy.

Key Terms: Illicit Financial Flows (IFFs), Trade Mis-invoicing, Tax Evasion, Anti-Money Laundering (AML), Regulatory Framework, Mining Sector, Transparency, Beneficial Ownership.