Zambia risks a deepening fiscal crisis unless it tackles an estimated USD 3.5 billion in illicit financial flows (IFFs) uncovered in 2024, the Centre for Trade Policy and Development (CTPD) has warned. According to the 2024 Financial Intelligence Centre (FIC) trend report, large-scale tax evasion, trade misinvoicing and illegal mining accounted for the vast majority of these outflows.
The scale of the problem is stark: at over ZMW 91 billion, the estimated IFFs represent nearly 42 percent of Zambia’s 2025 National Budget, and far outstripped the combined ZMW 73.9 billion allocation for critical sectors including Education, Health, Social Protection, Housing and Community Amenities. “These leakages deprive our country of resources desperately needed to fund free education, essential medicines and social services,” said the CTPD in its statement.
CTPD has urged the government to launch a suite of urgent reforms to stem the tide of illicit outflows and bolster domestic revenue mobilization:
Strengthen law enforcement agencies. Reform bodies such as the Anti-Corruption Commission and Drug Enforcement Commission to improve responsiveness and effectiveness in prosecuting financial crimes.
Enhance corporate transparency. Fast-track amendments to the Companies Act to require full disclosure of beneficial ownership and dismantle shell companies.
Bolster tax and customs intelligence. Focus resources on high-risk sectors—particularly mining and wholesale trade—to detect and deter misinvoicing schemes.
Implement a unified registry. Accelerate roll-out of the Integrated National Registration Information System (INRIS) to prevent identity-based fraud.
Ring-fence recovered funds. Ensure that assets and tax assessments recovered through FIC investigations—such as the recent ZMW 28.9 billion assessment—are dedicated to health, education and social protection.
“Without decisive action, Zambia will struggle to meet its development goals,” CTPD warned. The think tank called on policymakers to treat IFFs as a national emergency akin to any other leak in the public purse.
Founded as a non-profit, membership-based organization, CTPD advocates for pro-poor trade and investment reforms at national, regional and multilateral levels. It works to ensure that trade policy contributes to poverty eradication and sustainable development across Zambia.
