The issue of money laundering on the African continent is not new but became the centre of discussion in a more pronounced way after the 9/11. Certainly, according to UNECA’s worrying figures of 2015, illicit money flows out from Africa amount about 50 billion USD per annum. Thus, the fight against money laundering and fighting the financing of terrorism come at a critical juncture. With this in mind, Eritrea and its national development policies would not be complete without engaging with partners in the fight for peace and stability in the volatile region of the Horn of Africa.
Surely, with its 1200km of coastline, ensuring security in its territorial waters becomes evident as more than 90% of trade at the international is through the Red Sea level is a busy trading route linking the Indian Ocean to the Mediterranean. As trading is not possible without financial flow; implementing a mechanism of control and a strong financial system is an obvious factor that ensure peace and stability.
Fighting illicit financial flows on the continent is, hence, a shared objective by Eritrea and the Common Market for Eastern and Southern Africa (COMESA) as one of Eritrea’s partners engaged in fighting piracy and money laundering. Needless to say, this programme comes at a crucial point in time in a region prone to instability.
It is important to state that, COMESA’s engagement with Eritrea is not a new cooperation plan but a work in progress. Eritrea is one of the 19 member-states since the early 1990s, working on several programs related to trade and security. Indeed, looking back in time, , on February 9th and 10th, the delegation of Governance, Peace and Security of COMESA visited the country and conducted and organized in collaboration with the Ministry of Foreign Affairs an extensive workshop to stakeholders in the financial system.
The current workshop aimed at engaging and sharing experiences in the fight against Money Laundering (ML) and Terrorism Financing (TF). Certainly, the workshop stakeholders gave the opportunity and platform to share, learn and address the issues of ML and TF in the region and underscore for Eritrea the importance of collaborating with this regional organization. Surely, with a 1200km coastline in a region prone to instability, Eritrea’s engagement in terms of security and peace in its territorial waters as well as its effort in controlling the shadow market through the enforcement of its law by the end of 2015 and its financial institutions;is at its most importance stakeholders in the financial public system as well as in the private sector sitting together to come towards a common agreement becomes key to development.
By the end of yesterday’s session the, delegates adopted a resolution highlighting the importance to focus on capacity building through the continuation of sensitization program as well as establishing the Financial Intelligence Unit (FIU) in the near future. In line with the proclamation 175/2014 of the Government of Eritrea adopted in 2014, on anti-money laundering and combating financing of terrorism, the workshop and plays a key part on the long run.
Accordingly, the Eritrean Government invited the delegation of COMESA to conduct a follow-up workshop these two days, July 26th and 27th, with stakeholders from both the public as well as the private financial sector in Eritrea. Mr. Berhane Ghebremariam, Head of Supervision of the Central Bank of Eritrea opened the session which as followed by statement by Foreign Minister Osman Saleh, in which he highlighted Eritrea’s engagement in the fight against ML and TF. The delegation of four women led by Ms. Elizabeth Mutunga, Head of Governance, Peace and Security, representing COMESA gave extensive reports followed by discussion and interactive dialogue among stakeholders.
As many of the delegates commented during the session, Eritrea as a young nation focuses its policies on national development. However, without a strong financial system and control of illicit money flows, any sustainable development is at risk of abortion. Thus, COMESA is engaged with Eritrea in building a robust system to analyse, detect and control financial flows and in particular, to disrupt the financial flows of pirates and money launderers as Ms. Dalitso Bonongwe, Maritime and Security (MASE) Coordinator at COMESA, explained to the audience yesterday during her presentation on the MASE program.
As stressed above, illicit financial flows out of Africa have major a negative impact on any economy by affecting both development and governance agenda of a country and region as a whole and even a continent as there is no border to such illegal activities. Many of the stakeholders pointed out during these two-days; that the issue of illicit financial flows being not solely an economic issue but also a merely a political issue worsen by the exploitation by many companies and governments in the so-called ‘Global North’. As a matter of fact, the amount of illicit financial flows out of Africa almost double the official development assistance the African continent receives (UNECA’s 2015).
The follow-up workshop entitled ‘Anti-Money Laundering and Combating Financing of Terrorism’, thus, aimed at looking at the mechanism, processes and the way forward for Eritrea. This session, although, having similar program as the previous one, focuses on sensitizing policy makers in particular in both banking and non-banking sectors and to look at the next step Eritrea will undertake. To strengthen this, the COMESA delegates gave extensive explanation on the significance of engaging with the Financial Action Task Force (FATF) – Style Regional Bodies (FSRBs) present in the region. Ms. Mutunga explained why Eritrea should seek membership to FSRB. She went on by highlighting the opportunities in terms of assistance, capacity building as well as being able to attend specific trainings in a wide range of topics with the sole aim of building confidence in the financial system and without failing to recall the visibility Eritrea gains on the global arena”, she explained.
Furthermore, the impact of money laundering in any state in both private and public sectors has several collateral damages by reducing the flows into tax revenues and consequently on social services such as education and health-care- . Illicit financial flows are also increase on crime rates, which, subsequently, discourage investment. In other words, money laundering is a complex crime, which demands a well-established intelligence body to be developed and requires a high level of commitment by responsible bodies. Surely, law enforcement and the establishment of a strong financial unit are keys as Ms. Mary Catherine Nkosi, member of COMESA committee elders stated in her speech on behalf of COMESA First Secretary.
The momentum that the Government of Eritrea is engaged with COMESA in fighting any illicit financial activities particularly in terms of money laundering and terrorism financing won’t be efficient without the capacity building as well as engaging policy makers in such endeavours with a focus on ongoing challenges Eritrea is facing in terms of ICT system, human resources and the implementation of FIU.