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Biggest recipients of Africa’s looted funds
October 29, 2017, 1:18 pm
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The hypocrisy of many Western nations that denounce kleptocratic African leaders, while at the same time facilitating the transfer and storage of their stolen wealth in Western vaults, was laid bare last week at the Center for Democracy and Development in Nigeria.

In a damning report, titled ‘From Maitama to Mayfair: How International Financial and Property Markets Fuel Corruption in Nigeria’, Mathew Page, a former US policymaker, indicted the United States and the United Kingdom for being the biggest recipients of funds looted from Nigeria and elsewhere in Africa.

Mathew Page, a senior policymaker at the White House, State Department and Defense Department for more than a decade, stated this in Abuja at a roundtable organized by the Centre for Democracy and Development (CDD), a civil society organization.

He pointed out that current banking, property and corporate laws in the US and UK were not only lacking in adequate safeguards, but were designed to facilitate illicit financial flows from Africa.

African kleptocrats deftly use both local banks and the international financial system, especially anonymous shell corporations and offshore tax havens, to launder stolen public funds and stash them overseas, often in the form of high-end real estate in London, Dubai, New York, and California, said the former policymaker.

"Despite possessing robust discretionary powers, the US and UK rarely deny visas to corrupt officials or report cases of suspected corruption or unexplained wealth back to law enforcement agencies in African countries.

Incriminating the UK as, “one of a small number of global financial centers that play a key role in processing substantial levels of corrupt capital”, Mr. Page cited a report by the global organization, Transparency International, which estimated that over US$75 billion was laundered within and through the UK in 2013 alone.

The combination of lax regulation and UK's financial institutions providing sophisticated methods to launder proceeds from criminal activity around the world, including those from drug trade, makes the country a global hub for illicit finance and a safe haven for the world′s malfeasants.

The UK government, despite taking the moral high-ground on corruption in Africa, deliberately turns a blind eye to this blatant corruption by banks and other financial institutions under its jurisdiction. However, the government’s duplicity has to be viewed under the context that this ‘dirty money’ represents a significant chunk of the total GDP of UK. The financial services industry accounts for major share of the services sector, which contributes around 80 percent of annual GDP in the UK. The country’s own National Crime Agency (NCA) estimated in 2015 that at least a hundred billion pounds of illicit wealth is laundered through the UK each year.

The report, ‘International Financial and Property Markets Fuel Corruption in Nigeria’ also provides a number of recommendations to address the challenges posed by looters in Africa stashing their ill-gotten wealth in the West. Among the suggestions are elimination of secrecy jurisdictions, and disclosure of beneficial ownership of companies and properties in the West.

Describing the London property market as highly vulnerable to corrupt wealth flowing into it, Mr. Page pointed out that "If African kleptocrats are unable to visit their properties and spend their ill­-gotten gains in luxury boutiques in London, Dubai, and New York, the incentives for off-shoring them, would likely diminish considerably.”

Without restricting the readiness with which the US, UK and other parts of the international financial system absorb illicit financial outflows from Africa, not much can be done by reform-minded African governments trying to curtail corruption and lessen the damage it inflicts on the continent and its people.

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