Illicit Finance in Africa: What Business Accountants Need to Know
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A new report by the Global Initiative Against Transnational Organized Crime (GI-TOC) reveals how illicit financial flows (IFFs) are enabling corruption, organised crime, and underdevelopment across Africa. And while the networks may seem distant from day-to-day accounting work, the risks are far closer to home than many realise.
What is Illicit Finance?
Illicit finance includes any movement of money that is illegal or concealed. In Africa, this includes proceeds from wildlife trafficking, illegal mining, cybercrime, fraud, tax evasion, and corruption. These funds are often hidden through trade, real estate, charities, and even professional services.
According to the report, IFFs are deeply embedded in many African economies and often operate in plain sight. From front companies to under-invoicing in trade, these activities drain public finances and weaken service delivery.
South Africa's Dual Role
South Africa plays a major role in the region:
Firstly, it has the continent’s most advanced financial system and strong regulations.
Secondly, it also acts as a source, route, and destination for illicit funds. High-profile corruption cases, complex company structures, and weak enforcement have made it a hotspot for money laundering.
Accountants are often unknowingly caught in the middle. Whether through processing suspicious payments, preparing financial statements for shell companies, or overlooking beneficial ownership structures, the profession can be exploited.
How Criminals Move the Money
The report highlights several common tactics:
Trade mis-invoicing: declaring incorrect values to move funds across borders.
Real estate: buying high-value property to clean dirty money.
Cash-based businesses: using informal sectors with little oversight.
Crypto and digital platforms: sending money via anonymous or under-regulated systems.
Criminals also use professionals to make transactions appear legitimate. This puts accountants at risk of being used, whether they realise it or not.
What is Your Responsibility as a Business Accountant
As a business accountant, you play a key role in detecting and preventing financial abuse. Here's what you can do:
Know your client: Take beneficial ownership seriously. Who really owns or benefits from the business?
Watch for red flags: Large cash transactions, offshore structures, unexplained wealth, and vague source-of-funds statements are all warning signs.
Stay FICA-compliant: Make sure your systems and staff understand their reporting and due diligence obligations.
Don’t look away: If something feels off, it probably is. Speak up or seek expert advice. Report suspicious transactions and cash transactions over R49,999 to the Financial Intelligence Centre.
Why It Matters
Illicit finance isn't a niche issue. It’s draining tax revenue, funding criminal empires, and holding back the continent's development. As accountants, we’re not just bookkeepers, we’re gatekeepers of financial integrity. This report is a reminder that even everyday transactions can either fight crime or enable it. Let's make sure we’re on the right side of that line.
