INTEGRATED SOCIAL DEVELOPMENT CENTRE
BUILDING CAPACITY TO CURTAIL ILLICIT FINANCIAL FLOWS
Recruitment of a Consultant to Conduct a Regional Study for an Understanding of the Context
of IFFs in West Africa/Africa
Terms of Reference
The Integrated Social Development Center (ISODEC) with support from the Open Society Initiative for West Africa (OSIWA) is inviting applications from prospective researchers who meet the criteria described below for a research project to understand the context within which illicit financial flows (IFFs) take place in West Africa.
Many West African countries are dependent on natural resource extraction and agricultural commodities for exports. Their economies are by nature therefore highly exposed to IFFs through trade. The policies of most countries are also heavily geared towards attracting foreign direct investments (FDI) and portfolio capital through their stock markets, making these economies vulnerable to IFFs through these channels. Moreover, banking regulation and tracking of financial flows through the banking system is weak in many countries heightening exposure to money laundering through the banking system. Widespread public sector corruption or collusion with multinational companies exacerbate these risks. The IFF risks are therefore real. However, although many governments may have a general idea of these risks, knowledge of how these actually occur and how to mitigate them is limited, as reflected by limited country-level information on IFFs.
The threat of IFFs to development is now well recognized in the international policy agenda – from the UN High-Level Panel’s proposal for a specific target in the post-2015 development framework, to the work of the African Union High-Level Panel on Illicit Financial Flows, chaired by Mr. Thabo Mbeki, former President of the Republic of South Africa, on the seriousness of the problem facing African countries. Potential damage includes not only lost tax revenues and foregone social and economic spending, but weakened institutions and state-citizen relationships, deepened corruption, higher inequality and policy distortions often arising from excessive dependency on external sources of finance.
The scale of these losses from Africa is staggering, estimated in some quarters as exceeding US$ 1 trillion cumulatively over the past 3 decades, making Africa a net exporter of capital. Ghana is among the top ten African countries in terms of illicit financial outflows. The African Development Bank and others estimate that Ghana may have lost, through illicit outflows of capital, as much as $11billion in the decade from 2000 - 2009. The largest single channel of illicit flows is generally estimated to be that which occurs through the mispricing of trade, both between unrelated parties and within multinational companies.
Through these practices, Ghana for example lost to the US alone, over $631 million (631m ($150 from the over-invoiced imp, $481 from under-invoiced export) cumulatively over this period. Add to this, losses due to the over-pricing of imports and similar transactions with the country’s other major trading partners such as the European Union countries and more recently China, and the scale of the resource leakage could be staggering. The use of tax havens and secrecy jurisdictions to conceal profits is particularly extensive in European countries where many of the mining companies operating in West Africa are registered. These practices have effectively robbed West Africa of the benefits of minerals whilst seriously also undermining the national tax system generally.
Availability of information that provides a clear understanding of the prevailing context within which African countries lose potential revenue is pertinent.
3.0 Objective of the Assignment
The research activities aim at broadening the understanding of the context in which IFFs take place in the West African region and existing knowledge gaps within relevant government institutions and civil society organizations working on IFFs.
4.0 Scope of the Assignment
The study will cover detailed understanding of the context within which IFF takes place for four selected West African States including IFF knowledge gaps of the relevant government institutions and civil society organizations of the selected countries. The study will be undertaken within three months.
5.0 Activities of the Consultant
The Consultant shall carry out the following activities:
Partnering with Tax Justice Network (Global) and Tax Justice Network - Africa and the Governments of 4 selected project countries to undertake an IFF risk exposure analysis as pertains in the solid minerals and/or the hydrocarbon industries of the study countries.
Undertake an analysis of knowledge gaps of government institutions responsible for curbing IFFs in the selected countries.
Provide an analysis of the readiness of the selected countries’ institutional architecture to combat IFFs.
Assess country efforts to reduce IFFs and increase domestic revenue.
Provide training needs analysis; and recommendations for capacity improvement areas for relevant government institutions and civil society organizations working to curb IFFs.
The deliverables for this assignment are:
A regional study that provides an understanding of the context of IFFs in West Africa
A scoping report on the data needs, barriers and potential costs for the data needed to extend the trade mis invoicing study conducted in Ghana for USA and Europe to new trading partners such as China, ECOWAS area and the Middle and for a similar study in the selected research countries.
Draft Report by 30th April, 2022.
Final report by 30th May, 2022.
7.0 Duration of Assignment
The assignment is estimated to require 3 months.
8.0 Governance and Support by ISODEC
The Consultant will provide the above services, and will provide progress updates on a monthly basis as requested by ISODEC. The Consultant will report to the Executive Director of ISODEC through the Building Capacity to curtail Illicit Financial Flows Project Coordinator.
The following shall be made available by ISODEC within its premises where necessary:
9.0 Expertise Required
Interested candidates must provide information demonstrating that they have the required
qualifications and proven experience and track records of conducting similar assignments at regional levels.
10.0 Qualification and Experience of the Senior Data Analytics/Economist
An advanced university degree in development economics or its equivalent
A minimum of ten (10) years of relevant work experience in the fields of development economics and/or international trade policy, financing and tariff regimes research
Knowledge of/or previous work experience in the fields of international trade policy,
Financing and tariffs;
Ability to work independently and under tight deadlines; and
A high level of attention to detail.
Interested applicants should send their CVs to [email protected] by 19th March 2022.