Fraud EDge

Africa needs solid education to fight fraud



When corruption thrives and dirty money is kept in offshore accounts, Africa’s high levels of poverty remain. How do we reverse the trend? The solution lies in reviving countries’ primary educational standards and increasing fraud awareness and education.

Fraud is costly in Africa. According to the ACFE’s 2018 Report to the Nations, median losses for sub-Saharan Africa organizations are $90,000. The study finds corruption (49 percent), and cash on hand (21 percent), as the leading types of fraud reported in sub-Saharan Africa cases. The study also finds that the largest percentage of sub-Saharan African frauds are committed by employees (48 percent) with a median loss of $55,000, then managers (36 percent) with a median loss of $73,000, followed by owners/executives (14 percent) with a median loss of nearly $2,716,000.

In the 2017 book, Fate of the Nation: Three Scenarios for South Africa’s Future, the author, Jakkie Cilliers, explains that although other developing countries might experience the same levels of median loss of a single occupational fraud as in Africa, those non-African countries plough the illegal proceeds back into the economy rather than stash them offshore.

Corruption not only increases poverty, it reinforces it. According to the Institute for Security Studies (ISS), African countries remain poor as their leaders put their money in overseas banks and buy luxury real estate abroad. The solution lies in anti-fraud education and promoting ethics from the family up to national government. (See The fight against corruption in Africa is on, by Liesl Louw-Vaudran, Aug. 18, 2017.)

 


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