Illegitimate Trade Pees $ 2.2 Trillion from Global Economy

By Abdul Rahman Suagibu –

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Photo Credit: Texpertis

NEW AFRICA BUSINESS NEWS, Freetown, Sierra Leone- It is of the essence to collectively kick against unlawful trade across boarder, going by the revelations by the United Nations Conference on Trade and Development (UNCTAD), those economic leakages that has created conduit pipe of leakages to the tune of $ 2.2 trillion yearly from the global economy.

UNCTAD in a communiqué after a forum of illicit trade said, the economic losses are nearly 3% of the world economy, while the illegality poses a threat to the achievement of global goals and requires concerted actions. From smuggling, counterfeiting and tax evasion to the trafficking of humans and wildlife, illicit trade is holding back progress, increasing costs and pushing Sustainable Development Goals (SDGs).

UNCTAD’s Head of Competition and Consumer Policies – Teresa Moreira said, “A dark side of globalization and the expansion of trade has been the alarming emergence of illicit trade”.

Example, she said illicit trade in pharmaceuticals is valued at between $ 75 billion and $ 200 billion annually, noting that; “If the trade were an economy, it would be eight largest in the world”. Moreira said illicit trade on the black and gray markets clearly risks all aspects of SDGs as it impoverishes governments of revenues for investment in vital public services.

Director General – Transactional Alliance to Combat Illicit Trade (TRACIT) Jeffrey Hardy, highlighted the impact of illicit trade on various countries, from illegal fishing affecting marine resources in Coastal Rica, to counterfeiting draining $ 93 billion from the European Union’s Gross Domestic Product (GDP) as well as 790,000 jobs. He said that, the statistics are pointers of the problems adding that; wildlife crimes are worth $ 23 billion.

“Insufficient attention has been given to substantial impact that illicit trade has and how it is holding back progress” Hardy said. He added that TRACIT has profiled into different strata, illicit trade on SDGs to help governments and businesses better understand and how illicit activity undermines progress on each of the goals. “Illicit trade has ‘macro impact ‘ as it cuts deeply across many of the SDGs undermining the achievement of the economic goals for poverty reduction, decent jobs and economic growth.

“When it generates revenue for organized criminal and a terrorist group, illicit trade undermines goals for peace and stability”, Hardy noted.

He argued that most firms of illicit trade also plunder natural resources, abuse supply chains and ultimately expose consumers to fake and potentially harmful products, affecting related goals. It is feeding violence and breeding corruption, undermining trust in institutions, generating enormous illicit financial flows fueling organized crime and heightening threats to national and global security, the communiqué said.

Taonga Mushayavanhu – Ambassador of Zimbabwe to the United Nations Office at Geneva said, curtailing illicit trade is particularly critical for developing countries as they struggle against odds to finance SDGs through domestic revenues. He said illicit trade was a drag on his country’s minerals sector which generates over 60% of the nation’s foreign export earnings and constitutes 3% of its DGP.

The country’s clothing and tourism sector has also taken a big hit from trade in illegal markets. To remain on track towards the SDGs, UNCTAD said countries must prioritize efforts to reduce the deterrents focus of illicit trade and plug the fiscal leakages associated with it.

For New Africa Business News Abdul Rahman Suagibu Reports,  Africa Correspondent

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