The Nexus between Illicit Financial Flows and Tax Revenue: New Evidence from Resource-Rich African Countries

Joshua Adeyemi Afolabi, Abayomi Samuel Taiwo and Sheu Nurudeen Adebayo
Additional contact information
Joshua Adeyemi Afolabi: Nigerian Institute of Social and Economic Research (NISER), Ibadan, Oyo State
Abayomi Samuel Taiwo: Tai Solarin University of Education, Ijagun, Ogun State
Sheu Nurudeen Adebayo: Federal College of Education (Special), Oyo, Oyo State

Scientific Annals of Economics and Business (continues Analele Stiintifice), 2024, vol. 71, issue 3, 381 - 398

Abstract: Resource-rich economies, especially those in Africa, are plagued with the resource curse and Dutch Disease syndromes, which undermine the quest for effectively mobilizing domestic resources toward sustainable and inclusive development. Empirical evidence on the role illicit financial flow (IFF) plays in this regard is relatively scarce. Thus, this study evaluates the volume of IFF and its effect on tax revenue in seven resource-rich African countries. Panel data, sourced for the 2009-2021 period, were analysed using the fixed effect and random effect models while the Instrumental Variable Generalised Method of Moment (IV-GMM), a dynamic estimator, was used for robustness check. Findings revealed that IFF has been on the rise and has detrimental effects on the tax revenue of the sampled countries’ national governments. This is inimical to sustainable development. Thus, the governments and policymakers in these countries must develop pragmatic policy and institutional approaches toward tackling the IFF menace.

Keywords: tax revenue; illicit financial flows; sustainable development; fixed and random effect models; Africa. (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://saeb.feaa.uaic.ro/index.php/saeb/article/view/2133 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aic:saebjn:v:71:y:2024:i:3:p:381-398:n:3

DOI: 10.47743/saeb-2024-0019

Access Statistics for this article

More articles in Scientific Annals of Economics and Business (continues Analele Stiintifice) from Alexandru Ioan Cuza University, Faculty of Economics and Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by Sireteanu Napoleon-Alexandru ().