As all the services carry the risk of financial crime such as money laundering and terrorism financing and risks to users (investors such as those investing through crowdfunding) regulation is key. Rather than regulate them out of existence, however, African economies should embrace a regulatory friendly approach to their operation which would be vital to: provide SMEs and individuals access to finance; kick start economies; create jobs and set Africa on the trajectory of growth again post the Covid-19 crises.
The Commercial Law Research Network Nigeria (CLRNN) was established in 2019 to create a platform through which the suitability of reforms to the commercial law in Nigeria can be critically discussed. CLRNN creates a collaborative environment in which researchers with expert knowledge of Nigeria’s domestic and international contexts can engage on various commercial law subjects germane to Nigeria’s economy.
For the objective of AfCFTA not to be defeated through the menace of trade-based laundering of illicit funds, African member states must be proactive to ensure that all necessary measures and regulations are put in place in combating TBML that may ensue therefrom before AfCFTA comes into full implementation.
In this blog post I will consider policy initiatives for tackling the issue of illicit flow of funds out of African countries and the implications of these activities on investment and trade in the context of the AfCFTA. Combating Illicit Financial Flows has been a difficult task for African countries and, the best approach to tackle this endemic problem may be to develop and implement comprehensive mechanisms that will encourage the disclosure of these illegal activities in a timely manner. Such disclosure can best be realized by the adoption of a regional whistleblower protection directive.