The Africa Governance Report The proper management of natural resources could provide the revenue needed for investment in social services such as health and education. Poorly managed, extractive industries have the potential to generate violent conflict, poor economic growth, corruption, environmental degradation and its related social ills, human rights violations, and gender-based violence. In a conflict prone or fragile environment, poor management of these industries can heighten the risk of conflict or worsen existing ones. The AMV is to be implemented in phases, the idea being to integrate the mineral sector into the economy of each country. To support the realization of the AMV, the AU established the Africa Minerals Development Centre (AMDC) in 2013, to support Member States by providing strategic operational support for the Vision and its Action Plan. A core function of the AMDC is to support Member States to enhance their capacities for effective mineral policy and regulatory design and implementation. Member States have also been encouraged to review and align their national mineral policies and regulatory frameworks with the AMV. So far, many Member States have not yet aligned their mining regimes with the AMV, although their mining policies and laws address the goals of the AMV in various respects. 6.3.2 Illicit Financial Flows Illicit financial flows (IFFs) have an impact on good governance and Africa’s development priorities. The High-Level Panel on Illicit Financial Flows from Africa defines IFF as “Money that is illegally earned, transferred or utilised. These funds typically originate from three sources: commercial tax evasion, trade mis-invoicing and abusive transfer pricing; criminal activities, including the drug trade, human trafficking, illegal arms dealing, and smuggling of contraband; and bribery and theft by corrupt government officials”.55 The drivers of IFFs include the desire to hide illicit wealth, weak regulatory structures, unnecessary tax incentives and poor governance. Central to all these is poor governance, which undermine Africa’s goals of self-sustainability, and its ability to domestically finance its development priorities at the continental, regional and national levels. A major finding of the High-Level Panel was that Africa is inadvertently a net creditor to the rest of the world. The implication is that despite the inflows of ODA, the continent suffers from a continuous crisis of insufficient resources for its own development, social services, infrastructure and funding of investments. In brief, African countries are unable to mobilise domestic resources to implement their development goals. It is therefore necessary for the continent to track, stop and even reverse IFFs to ensure development. The High-Level Panel observed that increased illicit financial outflows coincided with a period of relatively high economic growth in Africa, and that IFFs are therefore negating the positive development of, and is fully integrated into, a single African market; sustainable and well-governed mining sector that effectively garners and deploys resource rents and that is safe, healthy, gender and ethnically inclusive, environmentally friendly, socially responsible and appreciated by surrounding communities; A mining sector that has become a key component of a diversified, vibrant and globally competitive industrialising African economy; A mining sector that has helped establish a competitive African infrastructure platform, through the maximisation of its propulsive local and regional economic linkages; A mining sector that optimises and husbands Africa’s finite mineral resource endowments and that is diversified, incorporating both high value metals and lower value industrial minerals at both commercial and small-scale levels; A mining sector that harnesses the potential of artisanal and small-scale mining to stimulate local/national entrepreneurship, improve livelihoods and advance integrated rural social and economic development; and A mining sector that is a major player in vibrant and competitive national, continental and international capital and commodity markets (AU, 2009). 55 AU/ECA Conference of Ministers of Finance, Planning and Economic Development, 2015. “Illicit Financial Flow Report of the High Level Panel on Illicit Financial Flows from Africa”. Page 72 of 96