In Mozambique, as in many other developing countries, illicit financial flows (IFFs) pose one of the greatest challenges to ensuring that resources from the extractive industry contribute fairly and effectively to development. These flows represent an undue outflow of capital that could be invested in strategic areas such as poverty reduction, job creation, and the promotion of inclusive and sustainable economic growth.
While accurately measuring the scale of IFFs in the Mozambican extractive sector remains a challenge, it is frequently identified as a sector prone to abusive tax practices, from transfer pricing manipulation to base erosion. The government has taken some responsive measures, but the need for a stronger, more transparent, and effective institutional framework to reduce the- se practices and ensure that the country’s mineral wealth benefits society as a whole remains evident.
Discussion of this topic, therefore, remains high on the agenda regarding natural resource exploitation and tax justice. This text presents the main highlights of the conference on illicit financial flows in the extractive industry in Mozambique, held in July by the CDD in partnership with the Tax Justice Network Africa (TJNA).
The conference aimed to promote an evidence-based discussion on IFFs in the extractive industry in Mozambique. Based on the results of a study produced on the subject by the CDD, the session analyzed the main sources and dynamics of IFFs in the mining and hydrocarbon sectors, assessing the country’s legal, regulatory, and institutional preparedness to address this phenomenon. The session also promoted reflection on policy recommendations to strengthen domestic resource mobilization and strengthen governance in the extractive sector.
