Africans hiding wealth in offshore accounts are traitors

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Revelations after revelations from the “Pandora Papers” unearthed by the International Consortium of Investigative Journalists, (a consortium of some 300 journalists around the world), have been splashed through print and broadcast media, nonstop, throughout last week. The revelations are extracts from the financial details of some very prominent and wealthy individuals around the world, and their hitherto concealed wealth. It follows a leak of 12 million files exposing their offshore dealings. For clarity, an “offshore” dealing or account is a method of hiding wealth in an account in one of several “tax havens”, usually a remote island in the Caribbean, Latin America, and Europe, away from the prying eyes of the tax authorities in their home countries. Put simply, an individual with loads of cash at their disposal, who does not want ownership to be traced to him, would approach an agency specialising in hiding wealth overseas, far removed from their home jurisdiction, create fictitious companies with fictitious directors on some remote Island, where no tax deductions are payable. Once established, the beneficial owner of the wealth can begin to enjoy the proceeds by giving instructions to the agent on where and how to dispose of the wealth, usually by buying properties in choice locations in Western capitals.

The fictitious companies give the appearance of legitimate businesses, able to buy and sell properties, as well as move cash around major financial hubs in Europe and America, anonymously, and completely legally. You are spending money, accumulating properties, but, no one knows your identity. No one knows you are the shadowy figure behind the fictitious (or shell) companies.

It sounds murky, cloak and dagger(ish), but that is capitalism at its worst. Fabulously rich individuals from the system do not fancy surrendering too much of their wealth to their country’s tax authorities. There are three principal reasons why a person might want to hide wealth in an offshore account. First, is to avoid paying income and inheritance taxes. Remember, there is a difference between tax avoidance and tax evasion. One is legal, the other is illegal. So, people hiding wealth to avoid paying taxes though morally culpable, but they are totally legit. The second reason people use offshore accounts is anonymity. Not every wealthy individual is comfortable with the source of their wealth being scrutinised in the media. The third and final reason why this method is adopted is criminality. That is, for the purpose of money laundering. People who have come into sudden wealth through bribery or theft find it a convenient way of moving cash around the world, gobbling up luxury yachts, fancy apartments in central London, Manhattan, New York, and Dubai without fanfare.

Since the revelations, many countries have been combing through the documents, looking to see if any of their citizens is highlighted. Indeed, many are, including from the ‘usual suspects’, Russia, India, Pakistan, Brazil, but, also, Spain, the UK, the USA, Australia, and several others. With specific reference to Africa, what boggles the mind is the thought that, with such a level of underdevelopment, and endless borrowing requirements from wealthy countries, any African citizen would embark upon taking money from the continent for hiding in secret locations, contributing to the development of other countries at the expense of theirs. It is even more galling to imagine that any political figure in Africa would stash their wealth away in foreign lands, whilst implementing policies that create economic hardship for their compatriots at home. Above all, it is sickening to imagine that anyone in a position of authority in Africa would be busy buying up pricey properties in Western capitals while the rest of the population live in shanty towns and in slums around major cities as a result of government’s inability or unwillingness to spread the wealth around in their own countries.

Do we have prominent Africans amongst the revelations? Of course, we do. Perhaps, the most prominent names that have come up are President Uhuru Kenyatta of Kenya, and in Nigeria, former Governor Peter Obi, and Senator Stella Oduah, both from Anambra State. The authenticity of all of the documents in the leak has never been questioned. For instance, the shell companies associated with the transactions linked with Obi and Oduah and the various properties bought overseas are precise and detailed. There is no escape from the cold truth. Be it Kenyatta, Obi, Oduah, or anyone of their ilk, it is an unforgivable betrayal of public trust. It is nothing but treachery. There is an urgent need for anyone standing for office in Africa to make a declaration about their interest in any offshore accounts. The public has the right to this information prior to an election for it should be an automatic disqualification from office. How can anyone seek to rule over an African country in whose financial regime they do not, themselves, have confidence?

Furthermore, no one seeking a position of power and authority in any African country should be permitted to basically stick up two fingers to millions of their impoverished citizens, more or less saying, Up yours! My (mostly) ill-gotten wealth is accumulating even more wealth for me out there in foreign lands. Assuming the monies in those offshore accounts are even legally held, they, nonetheless, constitute an affront to all sense of moral decency of the African. Kenyatta, Obi, Oduah & Co, are, by consequence, unfit for office. What is more, they and others like them should be held to account for the humongous amount of wealth stashed away for them and their families offshore. How could accountability possibly happen without having to prove criminality, a notorious route to recovering stolen assets? Incidentally, the UK (the one time favourite destination for looted cash from the continent), is now the leading thorn in the flesh for Africa’s “Politically Exposed Persons” and their illegal assets. “Scotland Yard” (the Metropolitan Police), in conjunction with Her Majesty Civil Service, Assets Forfeiture Team, have spared no efforts in tackling the rising tide of money laundering emanating from this continent in the last 20 years. This is far more than the Nigerian or any other government in Africa has managed in the same time frame.

The UK’s Proceeds of Crimes Act 2002, permits the confiscation of criminal property using a lower “civil” standard of proof. This was, however, limited to exceptional cases where prospect of criminal prosecution was unavailable or undesirable, particularly in the African situation where the suspects are usually part of the establishment relied upon to assist. This column came up with a novel idea of creating a ‘trust’ relationship between a public office holder, and the government property at their disposal. The ‘trust’ element obviates the need for anti-corruption agencies to prove wrongdoing before confiscation. This was deemed too draconian in the context of the UK. See, “Money laundering regulation and the African PEP: Case for tougher civil remedy options”. ‘Journal of Money Laundering Control’, Vol 9, 1, 2012. Not satisfied to rest on their laurels, the UK government later came up with an innovative legislative hammer of their own in form of “Unexplained Wealth Orders”, included in the Criminal Finances Act 2017. It was targeted at people linked with serious crime or who hold public office outside the EU, in other words, political office holders here, in Africa, and elsewhere. It took effect from January 2018. Two things left to accomplish: “Unexplained Wealth Orders” should transform into a UN Convention. Then, it should be domesticated in home countries, subsequently, across Africa. No offence, no crime would have been committed before the likes of Kenyatta, Obi, Oduah etc, are requested to account. Never mind offshore accounts, this would be a game changer in the fight against official corruption on African shores.

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