Professor Léonce Ndikuma’s report from the University of Massachusetts Amherst has revealed Ghana’s staggering and unacceptable loss of nearly $50 billion due to capital flight in the last 50 years.
The report analyzed the complex interplay of factors driving capital flight in selected African nations, including Ghana, Cameroon, and Zambia, which have abundant natural resources.
The report shows that the misreporting of trade values, particularly in the gold mining and cocoa industries, is the primary cause of the loss.
The report further highlights that Ghana significantly underreported its gold exports, leading to a considerable disparity between the recorded export values and the actual value received by the destination countries.
This revelation is a clear indication of the need for more stringent measures to prevent such losses in the future.
An illustrative example provided in the report pointed out the incongruity, as Ghana’s exports of gold to South Africa in 2020 to 2021 amounted to approximately $15 billion, while questions surrounding the reconciliation of these figures loom large.
In the cocoa industry, losses due to capital flight were relatively modest, primarily due to the Ghanaian government’s significant stake in the cocoa trade. However, the report highlights the stark contrast in control within the cocoa value chain, with Ghana retaining a 4.0% share as a producer, while a substantial 79% of the value chain is overseen by the processing and distribution sector.
The report also sheds light on a cumulative private wealth of approximately $56 billion, with 110 Ghanaian multimillionaires boasting equity in excess of $10 million. Consequently, the report recommends that Ghanaian business owners focus their investments on enhancing the value chain within these sectors.
Beyond Ghana, the report underscores a profound issue affecting the entire African continent, revealing an astounding capital flight of about $2 trillion from 1971 to 2018.
Titled “Capital Flight from Africa and Perverse Global Connections: Analysis and Possible Solutions,” the report highlights the imperative need for closer scrutiny and measures to curtail capital flight in order to promote sustainable economic development across the African continent.