Money laundering, defined as the process of disguising the source of unlawfully obtained money through transfers involving foreign banks or legitimate enterprises, is a serious threat to the socioeconomic fabric of countries, especially those in Africa.
Africa’s economic landscape, which includes successful economies as well as those struggling with poverty, provides good ground for money launderers.
Wealth and development disparities, along with the absence of adequate enforcement tools, create an environment in which financial crime can thrive.
Globalization and rapid technological advancements have also added additional aspects to money laundering on the African continent. Cybercrime, digital currencies, and internet platforms enable sophisticated criminals to abuse African countries’ financial systems.
The International Centre for Asset Recovery (ICAR) at the Basel Institute of Governance recently assessed the global risk of money laundering. The Basel AML Index assigns risk rankings based on information from 15 publicly accessible sources, including the Financial Action Task Force (FATF), the World Bank, and the World Economic Forum.
According to the research, over two-thirds of African countries are high-risk, with an overall risk score of 6.54.
| Rank | Country | Overall score | Global rank |
|---|---|---|---|
| 1 | Chad | 8.14 | 2 |
| 2 | Democratic Republic of the Congo | 8.10 | 4 |
| 3 | Republic of the Congo | 7.91 | 5 |
| 4 | Mozambique | 7.88 | 6 |
| 5 | Gabon | 7.73 | 7 |
| 6 | Guinea-Bissau | 7.69 | 8 |
| 7 | Madagascar | 7.43 | 11 |
| 8 | Algeria | 7.22 | 12 |
| 9 | Liberia | 7.17 | 13 |
| 10 | Sierra Leone | 7.09 | 14 |