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Paper short abstract:

Poses practical development knowledge on challenges affecting developing countries. Advocating for the need to curb trade misinvoicing in developing countries. To learn a lot from development intellectuals

Paper long abstract:

It is an undeniable fact that Illicit Financial Flows have resulted in underdevelopment in developing Countries. Trade misinvoicing is the main source of illicit financial flows and existing estimates have suggested that developing countries lose hundreds of billions of dollars each year through trade misinvoicing (Spanjers and Salomon, 2017). It has caused financing gaps for developing countries to achieve Sustainable Development Goals.

A report by the African Union and United Nations Economic Commission for Africa 2015 on illicit financial flows reveals that 54 percent (a cumulative total of US$407 billion between 2001 and 2010) of Africa’s illicit financial flows is through trade misinvoicing (Mundenda, 2019, p3).

According to Freitas and Kar (2012), Zambia lost $8.8 billion from 2001-2010 to IFFs due to crime, corruption, and tax evasion. Of that, $4.9 billion can be attributed to trade misinvoicing, which is a type of trade fraud used by commercial importers and exporters around the world (Gascoigne, 2012). This usually takes place through the mines, especially in the mining of copper and the African government has lost revenue. In Zambia, this has had negative effects on economic growth, increased poverty and inequality, poor health and education provision, impediment on the attainment of the SDGs, debt defaulting of $ 6 billion, etc. This has called for concerted efforts to curb trade misinvoicing in Africa to achieve domestic resource mobilization which is needed for development financing to achieve the SDGs.