CEEG Seminar Series: The effect of macroeconomic factors on illicit financial flows from the natural resource sector in Mozambique

On Wednesday 4 May 2022, Rafael da Cruz Macamo, CIC BATA (Centro de Iniciativas para la Cooperacion), will present a recent study entitled ‘The Effect of Macroeconomic Factors on Illicit Financial Flows from the Natural Resource Sector in Mozambique’.

The seminar is part of the CEEG Seminar Series, organized under the Inclusive growth in Mozambique (IGM) programme. The seminars offer a forum to share and discuss ongoing research on topics related to the work of the IGM programme and to foster a culture of research at the faculty and at UEM in general.

The seminars take place at the Faculty of Economics of the University of Eduardo Mondlane (UEM). It is a public event open to everyone. The presentation will be given in Portuguese.

About the study

The study investigates the illicit financial flows from the natural resource sector in Mozambique with a particular focus on the effect of macroeconomic factors. Relying on quarterly time series data (2008Q1-2019Q4), the study adopted the ARDL estimation procedure and a granger causality test for the purpose of analysis. From the results, it was revealed that real exchange rate and government budget deficit have a significant and positive effect on illicit financial flows from the natural resource sector in the long run. However, the short-run inflation and its first lag, the second lag of government budget deficit and external debt were found to influence the movement of illicit financial flows from the natural resource sector in Mozambique. Furthermore, granger causality results revealed a bidirectional effect moving between illicit financial outflows and external debt, and between control of corruption and illicit financial outflows.