As South Africa takes on the G20 presidency for 2025, it has a unique opportunity to address two of the most pressing issues of our time: countering corruption and tackling illicit financial flows (IFFs) - the movement of money that is illegally acquired, transferred, or spent across borders.
Deemed an opportunity missed by Brazil during its leadership tenure in 2024, corruption and IFFs undermine the continent’s progress towards the African Union’s Agenda 2063 and its ability to meet the UN’s Sustainable Development Goals (SDG) targets.
South Africa’s G20 presidency offers an ideal platform to address corruption’s devastating impact on Africa and place it firmly on the global agenda.
Corruption facilitated by professional enablers in the global financial system divert resources away from critical areas like healthcare, education, and infrastructure, leaving the most vulnerable at a disadvantage. This deepens inequality, deprives marginalised communities of basic services, and widens the wealth gap. At the heart of corruption lies its lifeblood: illicit financial flows - cross-border movements of funds originating from and perpetuating corruption.
According to the United Nations Conference on Trade and Development, Africa loses an estimated $89 billion (R1.6 trillion) annually to IFFs, nearly as much as the combined total of official development aid and foreign direct investment inflows to the continent. In South Africa alone, the OECD estimates that up to 1% of the country’s GDP is lost this way. In turn, this significantly drains capital and revenues, undermines fiscal systems, and reduces governments’ capacity to provide essential services.
SA has a unique opportunity to act
South Africa’s 2025 G20 presidency presents an opportunity to positively influence this downward spiral, with IFFs appearing to be on the government’s radar. Encouragingly, the Minister of International Relations and Cooperation spokesperson highlighted them as one of the issues to be addressed during South Africa’s G20 presidency term, along with advocating for reforming the global debt architecture and addressing the substantial development financing gap.
Although the sets of problems confronted by countries from the global north and south differ in size and intensity, illicit financial flows are a shared challenge that requires collective accountability and action from all G20 members.
The financial systems of many G20 members serve as either the destination or conduit for corrupt money flows, and in some cases even provide the professional services that enable these illicit funds to be hidden and stashed offshore.
On behalf of all countries held back by these issues, South Africa has a crucial chance to force fellow G20 members to reckon with their own complicity in undermining sustainable development efforts by enabling dirty money flows
Key actions to address corruption relating to IFFs could include:
- Advocating for stricter global financial regulations and transparency, making it difficult for illicit funds to disappear into tax havens;
- Improving cross-border cooperation, strengthening legal enforcement, and facilitating information-sharing among nations to help track and recover stolen funds;
- Holding multinational corporations accountable and combatting practices like tax evasion and profit shifting that deprive nations of rightful tax revenues; and
- Promoting greater global cooperation and encouraging partnerships between developing nations to collectively push for fairer global financial systems.
These are some of the measures South Africa could implement to help disrupt the enablers of IFFs, making it difficult for funds to leave the countries they rightfully belong to.
South Africa’s theme for its G20 presidency in 2025 is ‘Fostering solidarity, equality, and sustainable development’. None of these focus areas operate in isolation, and all depend on a corruption-free continent where funds are appropriately allocated to essential services. Of course, this is easier said than done; corruption is a widespread global issue, particularly in Africa, where it only worsens existing socioeconomic issues like poverty and inequality in a vicious cycle where bribes and extortion are often seen as a means to obtain essential goods and services.
Illicit financial flows aren’t only an African problem but a global challenge that undermines trust, transparency, and equitable development. South Africa is taking important steps following the Zondo Commission to show its commitment cleaning up its act. As G20 host, it has an opportunity to encourage other G20 countries to join this anti-corruption journey. As it takes on this pivotal global leadership role, there is scope to act decisively to foster solidarity, reduce inequality, and create a more sustainable future for all. The time to act is now.
Karam Singh is the executive director of Corruption Watch.