Once again, I deem it a self-compelling civic obligation to raise public awareness on a rising yet under-discussed threat facing Ghana’s economy and national security—the perpetuation of illicit financial flows (IFFs) via digital payment platforms. While public attention on the platforms used for transferring and receiving illicit proceeds often focuses on traditional banking or human-to-human physical smuggling, there is an equally dangerous but quieter shift occurring—from the strict oversight of law enforcement officers and regulated banks to the looser, more anonymous space of digital payment apps and wallets.
What Are Illicit Financial Flows (IFFs)?
In simple terms, illicit financial flows refer to money that is earned illegitimately, transferred illegitimately, or used and moved in illegitimate ways—deliberately evading detection, tax obligations, or regulatory oversight, whether across borders or within them. In understanding illicit financial flows, three key elements must be considered: the source of the money, the mode of transferring the money, and the use of the money. When all three are illegal, it constitutes an IFF. Even when two elements are legitimate but one is not, it still amounts to an IFF and, by extension, an illegality. These flows deny the state critical revenue and create fertile ground for corruption, criminal financing, and national destabilization.
Common Examples of Illicit Financial Flows
To demystify this further, IFFs manifest in familiar forms—such as corruption, where individuals entrusted with public office misuse their position or power for personal gain; money laundering, which involves disguising the origin of criminal proceeds to make them appear legitimate; and trade misinvoicing, where individuals or firms deliberately understate or inflate invoice values to move funds illegally. These acts, although different in method, all serve one purpose: to conceal illicit wealth and move it undetected.
How Illicit Financial Flows Affect Ghana?
In Ghana, the economic damage is palpable and undeniable. Millions of cedis vanish each year through these means—money that could have been injected into infrastructure, social services, healthcare, and job creation. This financial hemorrhage not only weakens the economy but fuels inequality, widens the gap between the rich and the poor, and undermines public trust in institutions.
Traditional Banks and Anti-Money Laundering (AML) Mechanisms
To confront this threat, Ghana has built a robust legal and regulatory framework, particularly within the banking sector, where the Bank of Ghana has been very effective in enforcing these regulatory mechanisms. A key piece of legislation is the Anti-Money Laundering Act, 2020 (Act 1044). This Act repealed the earlier 2008 version and introduced stronger obligations on financial institutions. It mandates banks and financial service providers to conduct due diligence through Know Your Customer (KYC) processes, report suspicious transactions, and maintain records. Under Section 3 of Act 1044, reporting entities are required to report suspicious transactions to the Financial Intelligence Centre (FIC), and under Section 33, non-compliance attracts administrative sanctions and criminal liability.
Act 1044 works in tandem with the Anti-Terrorism Act, 2008 (Act 762), which criminalizes terrorist financing and places obligations on financial institutions to detect and prevent the movement of funds related to terrorist activities. Section 13 of Act 762 provides that any person or institution that knows or suspects funds are linked to terrorism must report to the authorities—failing to do so constitutes a criminal offence punishable under Ghanaian law.
Further oversight is provided by the Bank of Ghana (BoG) through its regulatory guidelines. BoG enforces Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) frameworks that all banks must strictly adhere to. These include transaction monitoring, customer risk assessment, and the filing of Currency Transaction Reports (CTRs) and Suspicious Transaction Reports (STRs).
Critical to the enforcement of these laws is the Financial Intelligence Centre (FIC), established under the Anti-Money Laundering Act, 2008 (Act 749) and now operating under Act 1044. The FIC functions as Ghana’s national agency responsible for receiving, processing, analyzing, and disseminating financial intelligence to competent authorities, particularly within the security and intelligence agencies. Section 4 of Act 1044 empowers the FIC to request information from any reporting entity and to share its analysis with law enforcement bodies. By this constitutionally mandated role, the FIC plays a major deterrent function against those engaged in IFF-related activities.
Closely working with the FIC is the Economic and Organised Crime Office (EOCO), created by the EOCO Act, 2010 (Act 804). EOCO’s mandate, as outlined in Section 3 of Act 804, includes investigating and prosecuting serious economic and organized crimes such as money laundering, tax fraud, cybercrime, and financial market offences. EOCO collaborates with banks, telecom companies, the FIC, and, at times, international intelligence and anti-corruption agencies such as the FBI, the UK’s SFO, and Nigeria’s EFCC to trace, freeze, and recover illicit funds. Their joint operations have been instrumental in disrupting several criminal networks operating within Ghana’s financial ecosystem.
The Digital Dilemma: From Banks to Apps
However, as banks have tightened their systems in compliance with regulations and international best practices, bad actors in the IFF space are increasingly migrating from regulated banks to regulated-but-ineffective or entirely unregulated digital platforms—a trend I describe as the move from banks to apps. This new digital frontier includes mobile money services and cryptocurrency platforms that operate virtually, often beyond the effective reach of domestic regulation.
Why Digital Platforms Pose a Growing Threat
Digital payments have brought undeniable convenience—there is no debate about that. They have democratized finance, reaching people previously excluded from the banking system. But in doing so, they have also introduced significant compliance gaps. Unlike banks, many digital platforms operate with weaker due diligence protocols. Customer identity verification can be lax, and in some cases, transactions are processed with minimal oversight. Their systems are often not integrated with the traditional financial sector, making real-time monitoring difficult, if not impossible.
A major concern is that these digital operators do not always report to the FIC or EOCO in a structured and timely manner as banks do. There is also currently no statutory obligation compelling crypto exchanges operating in Ghana to comply with the same AML/CFT standards that banks follow. This creates a regulatory vacuum—one that criminals are quick to exploit.
The Societal Dangers of Loopholes in Digital Financial Systems
These loopholes are already being actively exploited and taken advantage of by high-risk actors. Terrorist financiers can send and receive money anonymously using crypto. Commodity smugglers and traffickers now rely on mobile money to collect payments across borders. In the illegal mining sector—commonly known as galamsey—digital wallets are being used to pay workers, purchase equipment, and launder proceeds while bypassing the banking system and government taxation.
Just about two weeks before writing this piece, during one of my field investigation expeditions to Anyinam—a town in Ghana’s Eastern Region that is fast becoming a hub for organized crime involving illegal mining, wildlife trafficking, and smuggling—I had a revealing conversation.
A young man in his early twenties, who was actively engaged in illegal mining, shared how he transacts business with foreign buyers.
“I sell my gold to some agents in Dubai,” he said. “They pay me through mobile money. That’s how we’ve been doing it for a while now.”
Curious, I asked him how these agents manage to send him large amounts of money, especially considering the transaction limits imposed by mobile money service providers.
“Oh yes, that’s a challenge,” he admitted. “But what they (the buyers) do is break the payment into smaller bits. Sometimes they send it over a few days, sometimes even weeks. That way, we don’t hit the daily limit.”
That short exchange revealed much more than just a clever workaround. It pointed to how digital platforms are enabling the easy flow of large sums of money under the radar of regulators. The fact that he receives foreign payments in this informal way and pays no taxes on them is a clear-cut case of tax evasion—and an equally clear case of illicit financial flow.
It is abundantly clear that these illicit digital flows are weakening the state’s ability to control its financial ecosystem. They drain public revenue, inflate underground economies, and make it nearly impossible to trace the origin and movement of dirty money. If left unchecked, they will destabilize financial markets, displace legitimate businesses, and strengthen criminal networks—ultimately threatening national security.
The Way Forward
The solution lies in urgently expanding Ghana’s regulatory reach. Mobile money operators and virtual asset service providers must be compelled to adopt and enforce full AML/CFT compliance. Their systems must be integrated with the FIC, the Ghana Revenue Authority (GRA), and the banking sector to enable seamless transaction monitoring. Digital identity verification must be strengthened, and laws must be amended to ensure that non-compliant operators face criminal penalties. Public education is equally critical. Ghanaians must understand that accepting unexplained funds or engaging in anonymous financial transactions could render them complicit in criminal activity.
In conclusion, the battleground for illicit financial flows has shifted. What once occurred through offshore accounts now happens on mobile phones and encrypted wallets—often held by faceless individuals. We must not be caught off guard. The legal frameworks are in place. The institutions exist. What remains is the political will, technical integration, and collective vigilance of the public. Let us act now—before convenience becomes the greatest threat to our national economy and security.
