debt service in the wake of COVID are especially debilitating,<sup>17</sup> and arguably hampers the development of a fiscal contract between states and citizens.

Resource-rich SSA countries are disproportionately vulnerable to grand corruption and progress on the transparency agenda in the extractives sector remains limited. Resource-rich countries are more likely to be prone to elite rent-seeking and corruption, with negative effects on institutional development (Masi et al. 2020, Sala-i-Marti and Subramanian 2003). In SSA, as illustrated in Figure 1 at the beginning of this paper, the rule of law tends to be below average in resource-rich countries, especially for countries endowed with oil resources. Countries endowed with natural resources also appear to be substantially more exposed to capital flight than others: Ndikumana and Boyce (2021) shows that six of the top ten African countries with the highest amount of capital flight are oil exporters, and that the problem of capital flight also afflicts countries rich in primary commodities such as minerals and agricultural commodities (e.g. Côte d’Ivoire and Zambia). Existing assessments of the transparency and accountability instruments in the extractives sector in African resource-dependent states show that they have had relatively limited effects; among other things, disclosure and transparency pertaining to state-owned and public energy and mining enterprises has left relatively untouched the connections between political elites, transnational corporations and global trading houses and offshore financial centers.<sup>18</sup> While anti-corruption reform remains challenging, some SSA countries have successfully experimented with localized, sector-based approaches. Experience in SSA and other world regions has shown that, while much-needed, the development of an anti-corruption ecosystem comprising of anti-corruption legislation, anti-corruption agencies as well as strong audit and justice institutions, is a protracted and challenging process, especially in low-governance environments (World Bank 2020). The nature of corruption flows, and the role of offshore centers in sustaining corruption, also point to the need to take the linkages between local and global governance seriously, and to tackle the role of offshore centers including through more transparent beneficial ownership – a complex enterprise.<sup>19</sup> In contrast, more targeted sector-based approaches addressing the institutional and political factors enabling corruption appear to have delivered more tangible results. For example, in Madagascar, in a context of customs malpractice and fraud which had led to considerable losses in revenue generation, performance contracts

> 17 This point is also made by Signée et al. (2020) who estimate that between 1980 and 2018, Sub-Saharan Africa emitted over $1 trillion in IFFs; and compare it with the levels of foreign direct investment (FDI) and official development assistance (ODA), which stood at about $2 trillion. See Signé, Landry, Mariama Sow, and Payce Madden. 2020. Illicit financial flows in Africa Drivers, destinations, and policy options. Brookings Institute. Africa Growth Initiative.

> 18 OECD (2022) and OECD (2016).

> 19 IFFs, in particular, clearly illustrate the globalized nature of corruption, and in particular the interconnections between the national and global scales, including the role of the offshore world and intermediaries in developed countries. Offshore centers originated in the strategies of some OECD states, corporations, wealthy individuals and financial sectors. In absolute terms, the offshore centers’ flow of capital and business continues to emanate disproportionately from developed and middle-income economies. Africa is affected to an unusual extent by the strategies of tax avoidance/evasion, outward financial flows and corruption enabled by the offshore world (Soares de Oliveira 2022). According to UNCTAD (2020), In Africa, on average, extractive export under-invoicing was equivalent to 16 percent of merchandise exports of the commodities from 2000-2015. The regulation and curtailment of offshore world practices, a complex and frustrating enterprise even for large and powerful states, is extremely challenging for African states to enact, despite some stirrings of collective action through organizations such as the African Union (see https://www.oecd.org/dac/corruption-accountability-illicit-financial-flows-oil-countries.pdf).

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