Illicit flows hit N$16.7 bIllion

Namibia has estimated that illicit financial flows through its economy amount to about N$16.7 billion a year, equivalent to 9% of nominal gross domestic product (GDP), highlighting a significant challenge to domestic resource mobilisation and economic governance.

The estimate is contained in Namibia’s first comprehensive assessment of illicit financial flows, approved by Cabinet and prepared by a technical working group led by the Bank of Namibia, with participation from 14 government institutions and technical support from the United Nations Conference on Trade and Development (UNCTAD).

Illicit financial flows broadly refer to money that is illegally earned, transferred or used across borders, or where its true origin, destination or purpose is deliberately concealed.

The assessment focuses primarily on tax- and commercial-related flows, including trade misinvoicing. This can involve deliberately overstating or understating the value of imports and exports to shift money across borders, reduce tax liabilities or avoid customs duties.

The assessment estimates that the state lost an opportunity to collect about N$2.7 billion in tax revenue over the two-year assessment period.

The government has set a target under the Sixth National Development Plan to reduce illicit financial flows from an estimated 9% of GDP to 5% by 2030.

Authorities say the assessment provides a clearer picture of the sectors, commodities and trading activities most vulnerable to illicit flows and will be used to strengthen enforcement, policy and revenue recovery.

The government said more than N$28 million in taxes was recovered in 2025 through coordinated efforts to address illicit financial flows. In 2026, a single investigation resulted in the recovery of more than N$45 million.

The findings come as Namibia seeks to attract substantial international investment into mining, petroleum and renewable energy projects. The government says strengthening the integrity of the financial system will therefore remain a priority as cross-border economic activity expands.