Windhoek: Namibia lost an estimated N$16.7 billion annually to illicit financial flows (IFFs) between 2021 and 2022, equivalent to nine percent of nominal Gross Domestic Product (GDP), the Ministry of Finance said on Wednesday. The ministry stated that these losses translated into an estimated N$2.7 billion in forgone tax revenue over the two-year period, according to estimates compiled by a 14-agency Technical Working Group chaired by the Bank of Namibia.
According to Namibia Press Agency, since the initial estimate, authorities have recovered more than N$28 million in taxes for the State during 2025, while a single investigation in 2026 recovered more than N$45 million. The Cabinet has approved the publication of Namibia's inaugural IFF estimates and their submission to the United Nations Statistics Division as part of the Government's commitment to safeguarding the integrity of the financial system, strengthening domestic resource mobilisation, and implementing recommendations contained in the African Union's Mbeki Report on illicit financial flows.
The ministry explained that IFFs are broadly defined as funds illegally earned, moved across borders through concealed channels, or whose true origin, destination, or purpose is disguised. These include losses resulting from tax evasion, trade misinvoicing, and proceeds of crime. Using the United Nations Conference on Trade and Development (UNCTAD) Partner Country Method Plus methodology, the ministry said IFFs remained at about nine percent of GDP between 2022 and 2024.
Trade misinvoicing, one of the most common channels for illicit financial flows, involves over- or under-pricing imports and exports to move money across borders, evade duties and Value Added Tax (VAT), or falsely claim government incentives. The ministry highlighted that the Government has strengthened several laws since 2023 to combat trade-related money laundering, including legislation relating to financial intelligence, the prevention of organised crime, virtual assets, payment systems management, and banking institutions.
Finance Minister Ericah Shafudah emphasized that Namibia's development aspirations depend on the country's ability to prevent and reduce illicit financial flows, as they diminish resources available for public investment and service delivery. She noted that the issue is particularly relevant as Namibia positions itself as a future exporter of renewable energy, green hydrogen, and petroleum products.
The ministry urged the public to declare the true prices and values of cross-border transactions and report suspicious transactions to the Namibia Revenue Agency (NamRA), Financial Intelligence Centre, Bank of Namibia, or Anti-Corruption Commission.