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Obstacles to progress

Realities

“ The informal sector supplies well over the majority of demand [for housing] in Nigeria (80

percent), Ghana(90 percent), urban Ethiopia(65 percent), urban Senegal (80 percent), Zambia
(80 percent) and Cameroon (97 percent).'60 In Dar es Salaam, 80% live in informal

settlements.”
“The regulatory framework, unplanned development and urban poverty: 200
findings from Dar es Salaam,” Tanzania. Land Use Policy
J Kironde

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External Obstacles to raising Tax Revenue

Illicit Financial Flows (IFF)
“ The study finds that during this ten-year period, the developing world as a whole lost US$7.8
trillion. In real terms, these flows increased at 6.5 percent per annum. After a slowdown during

the global financial crisis, illicit outflows have been rising, topping US$1 trillion since 2011 and
reaching a new peak of US$1.1 trillion in 2013

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Our analysis shows that, of the $1 trillion in illicit flows leaving poor nations annually, over 83

percent is due to trade misinvoicing. Simply put, each year over $800 billion in illicit trade exits
developing countries. While the total value of this trade would not be applied to development
programs, the tax associated with this illicit activity could be allocated to various poverty

alleviation efforts. Given the trade volume, revenue could be in the hundreds of billions of
dollars.

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Sub-Saharan Africa tops the list when IFFs are scaled as a percentage of gross domestic

product (GDP), with illicit financial outflows averaging 6.1 percent of the region's GDP.
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The report also compares IFFs to official development assistance (ODA) and foreign direct
investment (FDI). IFFs have exceeded those measures--combined--for seven of the ten years of

this study. Despite these substantial recorded inflows, the continued growth of unrecorded,
illicit outflows has a pernicious impact on development aspirations in many countries. For
example: for every dollar of ODA that entered the developing world in 2012, ten dollars flowed

out illicitly “
"Illicit Financial Flows from Developing Countries: 2004-2013" 201
Dev Kar and Joseph Spanjers,
Global Financial Integrity

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