Illicit flows cost Zambia over K91 billion, representing nearly 42% of 2025 national budget —CTPD

Zambia potentially lost over K91 billion in 2024—nearly 42 percent of the proposed 2025 National Budget—due to suspected Illicit Financial Flows (IFFs), the Centre for Trade Policy and Development (CTPD) has claimed.

According to the 2024 Financial Intelligence Centre (FIC) trend report, suspected IFFs amounted to a staggering US$3.5 billion in a single year, largely driven by tax evasion, trade misinvoicing, and illegal mining.

CTPD Public Finance Researcher, Robert Mwale, described the situation as alarming, noting that the estimated losses far exceed the combined 2025 budget allocation of K73.9 billion for key sectors such as education, health, social protection, and housing.

“These leakages rob Zambia of the much-needed resources to fund critical services like free education and essential medical supplies,” Mwale said in a statement issued on Thursday.

Read more: Financial Intelligence Centre says multi-million dollar mineral smuggling network uncovered

He warned that if left unchecked, IFFs could further deepen Zambia’s development challenges. Mwale called for urgent and targeted reforms, including the continued strengthening of tax administration and customs intelligence—particularly in high-risk sectors like mining and wholesale trade.

Among his key proposals were:

Ring-fencing recovered assets and tax assessments for reinvestment in health, education, and social protection.

Strengthening and reforming Law Enforcement Agencies (LEAs) like the Anti-Corruption Commission (ACC) and Drug Enforcement Commission (DEC) to enhance prosecution of financial crimes.

Fast-tracking the revision of the Companies (Amendment) Act No. 12 of 2020 to improve beneficial ownership transparency and expose shell companies enabling IFFs.

Accelerating implementation of the Integrated National Registration Information System (INRIS) to combat identity-based financial crimes.

Mwale cited a K28.9 billion assessment by the Zambia Revenue Authority (ZRA), arising from FIC leads, as a key opportunity for asset recovery and reinvestment.

“CTPD remains committed to supporting evidence-based policy reforms that restore fiscal integrity and improve the lives of ordinary Zambians,” he stated.

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