Africa Can Fight $88.6B Capital Flight with Blockchain, AI
Africa loses a staggering $88.6 billion annually due to capital flight, money illicitly moved to foreign bank accounts. This exodus, fuelled by corporate tax evasion, kleptocracy, and wealthy individuals securing profits, could be stemmed using blockchain and AI technologies. Olukoyede, Nigeria's EFCC chief, proposes this solution to boost development aid and infrastructure construction.
Blockchain and cryptocurrency activities in Africa could implement digital identity solutions, decentralised payment apps, smart contracts for automated import-export processes, and stablecoins for cheap cross-border payments. These innovations could enhance capital flow control, increase transparency, and reduce administrative costs. Olukoyede's plan likely involves tracking capital flight using Bitcoin, stablecoins, and blockchain analysis. This approach has proven successful, with $311 million recovered from a Nigerian leader in 2020. By making financial transactions more transparent, blockchain and AI could hinder criminals' ability to hide their activities.
Capital flight significantly hinders Africa's development. By harnessing blockchain and AI, Africa could potentially recoup $88.6 billion annually, providing substantial development aid for infrastructure projects like roads, hospitals, and schools. Olukoyede's proposal offers a promising path to combat this illicit outflow and foster growth.
