Cooking invoices costs Africa billions

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AUGUST 16 2016

Trade misinvoicing is a reality. Importers often overprice incoming goods for the purpose of shifting money abroad. Exporters often underprice outgoing goods for the same reason. The process contributes to about $50bn-$80bn a year moving out of Africa, mostly from resource exporting countries.  Compiling data on and curtailing these flows is a major challenge.

The most flagrant example of purposeful trade misinvoicing yet involved diamonds exported from SA. For much of the 20th century, diamonds left the country with no export data reported. In 1997, I went to the South African Reserve Bank seeking historical statistics on diamond exports and was told it had been a state secret since the early 1900s. A second request two years later produced the same answer.