Vigilance is needed with Western companies

By Augustine Nghipondola

These days we are all giving our attention to the disgusting ‘Fishrot’ scandal. Meanwhile, newspaper articles focus mainly on our several former ministers and  CEOs that are probably linked to this conspicuous and sensational case, losing sight of another equally important aspect. I mean the involvement of several European companies.

According to a joint report by the African Development Bank (AfDB) and Global Financial Integrity institute, a research and advocacy group, between US$1.2 and US$1.4 trillion left Africa in illicit financial outflows between 1980 and 2009. These figures are roughly equal to Africa’s current gross domestic product, and surpass by far the money it received from outside over the same period.

The composition of these outflows challenges the traditional thinking about illicit money. The report states that corrupt activities, such as bribery and embezzlement, constitute only about 3% of illicit outflows. But commercial transactions by multinational companies make up a whopping 60 to 65%!

The International Consortium of Investigative Journalists concurs with the above mentioned report by stating that many multinationals, European politicians and corporate moguls use offshore companies and bank accounts to hide money and avoid taxes in Africa.

An example is a Canadian firm, SNC-Lavalin. In 2004 it turned to the island of Mauritius to create a treaty with Senegal that allowed the company to skip out on almost US$9 million in taxes.

Another example is connected to Jean-Luc Tchifteyan, a trade advisor to France. In 2001, together with his father Marcel, he established a beachfront hotel with tennis courts in Cotonou, the financial capital of Benin. Some years later they opened a mall there and was awarded the National Order of that country.

But a look at the tax filings of the Tchifteyans, however, showed how the superstore and the hotel steered supplier payments through a Panamanian company and a bank in Monaco in order to avoid paying taxes in Benin.

One of the surprising challenges that the corruption fighters still confront: the resistance of a handful of wealthy nations, including the United States, to abolish one of the last legal exceptions to bribery bans. It is known as “facilitation payments” or “grease payments” – small fees paid for basic administrative tasks.

The USA permits facilitation payments under the Foreign Corrupt Practices Act, despite recent cases when illegal bribes had been recorded as facilitation payments. In 2012 an American pharmaceutical company payed a customs official in one of the East African countries to release products from a port without permission.

According to Tito Dragon from Inter Press Service, control over coltan mines was one of the main features behind the occupation of the parts of the Democratic Republic of Congo in 1998 by Rwanda and Uganda – with US support.

Washington also used the religious context by sponsoring a 20,000-strong army of Seventh Day Adventists headed by Rwandan pastor Nkunda. America Mineral Fields Inc., which has been pillaging the Congolese resources since the beginning of 1990s, was supplying Nkunda with money for the maintenance of his neophytes and used them for its exploitative purposes.

The most recent example is connected to the American oil giant Chevron that paid “donations” to Dr. Quao, the former AU permanent pepresentative to the US, that was just fired from her position.

Why am I saying all of this? At times our government demonstrates excessive love for western entrepreneurs. But let them remember at times that there are a lot of wreckers and imposters, like the above mentioned, or Chris Cox who once paid a courtesy visit to our President, referring to himself as a friend to Donald Trump.

This type of people first mulls over how to con us, and we shouldn’t be simpletons.