JUNE 20, 2016
According to data on illicit financial flows in and out of Ghana gathered by Global Financial Integrity (GFI), a Washington-based non-profit organization, illicit financial outflows from Ghana have risen sharply since 2008 to record levels. The most affected products were cocoa, petroleum products and wood.
According to a report on the nature and extent of trade misinvoicing in Ghana authored by GFI, illicit financial flows experienced by Ghana from 2008 to 2012 due to trade misinvoicing, amounted to about $22 billion – more than half of the total flows since 1960 which is estimated at $40 billion. Exporters and importers in Ghana misinvoice trade volumes for private gain, to the detriment of the public coffers.
GFI says while some of the inconsistencies in trade can be attributed to accuracy challenges and statistical issues, deliberate misinvoicing can’t be ruled out. Exporters use under-invoicing to avoid taxes and bring less foreign exchange into the country and leave the remaining in offshore accounts. Over-invoicing of exported goods is also used to take advantage of export subsidies. Importers on the other hand, also under-invoice to avoid tariffs and over-invoice so that they acquire extra foreign exchange from the higher price which is false.