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Africa Exploitation

China’s obsession with financial secrecy is causing problems overseas … even when it’s giving $55M away



Photo: Shutterstock

By Jenni Marsh and Nectar Gan, CNN

May 21, 2021

Hong Kong (CNN)China is once again causing controversy in Africa for doing something that, in theory, should win praise — giving away money.This week, it emerged Beijing had secretly gifted Sierra Leone $55 million to fund a controversial “fishing harbor” on an undeveloped stretch of coastline, which supports the local fishing industry, borders protected rainforest, and is home to endangered turtles and pangolins.The deal only came to light after residents were told by officials in the Whale Bay area, where the harbor is planned, that there was a hold on any land exchanges because of a Chinese deal, says Jane Aspden Gbandewa, who runs an an eco-tourism business in the area.The rumor mill got busy. The Chinese were allegedly funding the sort of fish meal factory that has proliferated along the West African coast recently — businesses that are devastating to the local environment, gobbling up vast quantities of fish and spewing out toxic, odorous waste.Beijing and Freetown were forced to deny the rumors but acknowledged a deal had been made — even if no details were forthcoming.On Tuesday, Sierra Leone President Julius Maada Bio said the project was part of Beijing’s “international Belt and Road Initiative” and would support the local fisheries sector. All “environmental due diligence will be done,” he added.Nevertheless, such moves don’t align well with President Xi Jinping’s calls to build an “ecological civilization” at home in China, and his determination to be a global leader on the climate crisis.In a statement to CNN, a spokesperson for China’s Foreign Ministry said “a modern fishing pier” had been a “long-cherished wish” of the people of Sierra Leone since the 1970s.The Foreign Ministry declined to clarify which Chinese bank or body was involved, when the funds had been exchanged — or if they were still in China — and the terms of the grant: such as whether a Chinese company will carry out the construction work. It simply said: “The ownership of the land and the port belongs to Sierra Leone.”Expansion of Sierra Leone’s fishing industry, vital for its food security and export industry, could be a boon for the country, if done responsibly. Yet caginess around money only breeds suspicion — even if it is a common factor in many deals brokered by China. A study of Chinese loan contracts earlier this year revealed secrecy clauses are a staple of Belt and Road deals.As Cobus van Staden, senior China-Africa researcher at South African Institute of International Affairs, wrote this week: “The result is that any Chinese deal, no matter how above-board, comes in for suspicion, already pre-tainted by the massive trust gap between national governments and local communities.””It’s no surprise that the ‘debt trap’ narrative has proven so durable in Africa,” Van Staden added. “Even as its specifics have been debunked many times, the story fits so neatly into the continent’s lived experience that it’ll likely never die.”

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Africa Exploitation

Probe Into Who Benefits Most In Nigeria’s Extractives Sector



The Nigeria Extractive Industries Transparency Initiative, NEITI, says that it is forging closer ties with the Corporate Affairs Commission, CAC, to unravel the actual owners of oilfields and other assets in the country. Oil is Nigeria’s main export and a cloud of uncertainty hangs over U.S.$62 billion in outstanding taxes and royalties owed to Nigeria by major oil operators. Executive Secretary of NEITI, Orji Ogbonnaya said: “the exclusion of information about our natural resources was at a huge cost to the Nigerian economy and affects the country’s optimisation of revenue from its natural resource wealth”. Another sector under investigation is the solid mineral sector which is experiencing revenue leakages, waste and other illegal activities.

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Africa Exploitation

The Downfall of an Angolan Dynasty



The crumbling of the dos Santos family empire reveals how Western companies allegedly enabled corruption in Africa.

MAY 5, 2021, 11:57 AM

Welcome to Foreign Policy’s Africa Brief.

This week’s highlights: Former Angolan billionaire Isabel dos Santos’s empire is crumbling, Zimbabwe releases fantastical unemployment figures, and will Fela Kuti finally enter the Rock & Roll Hall of Fame?

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From “Princess” to Pariah

Once Africa’s richest woman, Isabel dos Santos has seen her empire crumble after the publication of the so-called Luanda Leaks, a trove of documents that accused her and her associates of corruption.

In January 2020, the International Consortium of Investigative Journalists (ICIJ) released more than 715,000 emails, contracts, accounts, and other documents showing how dos Santos allegedly used her political connections to build a multibillion-dollar empire. The leaks shone a light on the network of Western companies that allegedly enabled the looting of one of Africa’s largest oil producers.

In the past month, she has begun to engage with the press and social media to maintain her innocence, blaming her financial woes on the scandal’s global fallout and posting inspirational messages to her more than 270,000 Instagram followers.

Downfall of a dynasty. Dos Santos is the daughter of José Eduardo dos Santos, one of Africa’s longest serving leaders who ruled Angola for 38 years as head of the country and the liberation-movement-turned ruling party the People’s Movement for the Liberation of Angola (MPLA).

During the last decade of her father’s rule, Isabel dos Santos built an empire that spanned the telecom and energy sectors, a supermarket chain, a brewery, and significant investments in Angola’s former colonizer, Portugal. Amassing a personal fortune of more than $2 billion, dos Santos maintained she was a self-made woman.

“I’ve always said that if my father wanted to privilege his children and make them tremendously wealthy, the easiest option would’ve been to grant oil rights or concessions or trading contracts in the oil sector. I haven’t built anything in oil,” she told Bloomberg in April.

But the “Princess,” as she was nicknamed in Luanda, didn’t need oil. There were other jewels in her crown: a 25 percent stake in Angola’s largest mobile operator, Unitel; part ownership of one of the country’s largest banks, Banco BIC; a 42.5 percent stake in its Portuguese counterpart, EuroBIC; and stakes in Portuguese telecom firm NOS and the recently launched Angolan brewing company Sodiba.

A crumbling empire. Oil may not have been central to dos Santos’s business empire, but her activities in the energy sector have led to serious allegations of fraud. In Angola, she has been charged with embezzlement and money laundering over alleged corruption at Sonangol, the country’s state-owned oil company, which dos Santos briefly chaired between 2016 and 2017.

Of particular concern is a deal in which Sonangol, under dos Santos, sold off a 40 percent stake in an offshore holding company to an entity owned by her husband, the billionaire art collector Sindika Dokolo. (Dokolo died in a scuba diving accident in October 2020.) The national oil company’s lawyers now claim the deal did not benefit Angola but served only to enrich the former first family.

This month, a Dutch court will rule on whether Angolan authorities can seize a stake in the Portuguese firm Galp Energia that is still linked to dos Santos’s family, while in Portugal authorities have nationalized her majority stake in Efacec Power Solutions, an electricity infrastructure company.

Dos Santos denies wrongdoing, saying the Luanda Leaks documents were falsified. “The truth will come out, I had the mission to ‘save Sonangol’ from the years of harmful management that left it bankrupt. Today there are those who want me to be the ‘scapegoat,’” she wrote in a September 2020 Instagram post.

International impact. Allegations against dos Santos have had international ripple effects. A tax practitioner resigned from global auditing firm PwC after the leaks exposed how the company allegedly made $1 million from projects connected to dos Santos.

The company told the ICIJ: “Since then, among other things, a number of senior employees have left PwC or been subject to other remedial measures.” Portuguese regulators are also investigating “the role of Portugal and of Portuguese enablers in the alleged corruption and money laundering schemes,” Karina Carvalho, executive director at Transparency International Portugal told Foreign Policy.

New regime, old tactics. When Isabel dos Santos’s father stepped down in 2017, he may have expected his hand-picked successor, João Lourenço, would allow his empire to survive.

Instead, the new regime cracked down on the dos Santos dynasty. Isabel dos Santos’s half-brother, Jose Filomeno, faces five years in prison for allegedly siphoning funds from Angola’s sovereign wealth fund; and younger sister Welwitschia “Tchizé” dos Santos was suspended from the party for “unjust enrichment” and claims her media company is being targeted by authorities.

But Angola’s rot ran far deeper than the dos Santos regime—earlier exposés have alleged the MPLA and the Angolan military have all benefited from the country’s wealth while most of its citizens live in poverty. Last year, the president refused to fire his chief of staff after he was implicated in corruption; when citizens protested, police responded with violence, a reminder of tactics from the dos Santos era.

Tip of the iceberg? As Africa’s richest woman, dos Santos attracted a slew of media attention—and so has her downfall. But this overshadows what her rise and fall represent: the role of global companies in the corruption that still plagues Africa.

“The Luanda Leaks investigation was never just about one city, one country, or one person. The investigation used leaked records—as well as months of on-the-ground reporting and data analysis—to expose how professionals, especially in Europe and the United States, made good money and ignored warning signs of possible financial wrongdoing,” said Will Fitzgibbon, a senior reporter at the ICIJ.

The Week Ahead

May 4 to May 13: U.S. Special Envoy for the Horn of Africa Jeffrey Feltman travels to Egypt, Ethiopia, and Sudan.

May 6: The International Criminal Court will sentence former child soldier-turned-commander of the Lord’s Resistance Army in Uganda Dominic Ongwen.

May 6: The United Nations Office for the Coordination of Humanitarian Affairs will hold a briefing on South Sudan.

What We’re Watching

Elite corruption in Nigeria. Investigators looking to uproot corruption in Nigeria should look to London real estate. Chatham House researchers have pointed to 800 properties owned by politicians in London and Dubai to trace illicit financial flows of up to $400 million dollars.

Most of these properties are held by families, shell companies, and other proxies, researchers said at a workshop aimed at training Nigeria’s forensic investigators. The British education sector has also become an attractive way to move illicit funds offshore under the guise of educating children in elite schools, according to a separate report by the Carnegie Endowment for International Peace published early this year.

Women chant slogans during a demonstration calling for the repeal of family law in Sudan outside the Sudanese Ministry of Justice on International Women’s Day in Khartoum, on March 8, 2020.ASHRAF SHAZLY/AFP VIA GETTY IMAGES

Women’s rights in Sudan. Last week, Sudan finally ratified the United Nations’ 1979 Convention on the Elimination of All Forms of Discrimination Against Women. Yet, the majority male ruling transitional council still had reservations, refusing to endorse women’s equal rights in marriage and parenting.

Women were instrumental in the 2018 and 2019 mass demonstrations that led to the ousting of long-time leader Omar al-Bashir. However, women’s rights activists say the transitional government they helped usher in continues to curtail gender equality because it’s unwilling to challenge conservative norms and does just enough to appease the international community.

Zimbabwe’s questionable unemployment data. Despite a crumbling economy worsened by the pandemic, Zimbabwe recorded an official unemployment rate of only 6 percent, on par with the United States. Small to Medium Enterprises Development Minister Sithembiso Nyoni pointed to the large numbers of Zimbabweans making ends meet in the informal sector.

Where Nyoni saw resilience and self-reliance, observers say the country has failed to create jobs in a negative growth economy, and the unemployment rate is likely closer to 80 percent. The country has routinely misreported its unemployment figures in the past as the ruling party blames external forces for a failed economy.

Chart of the Week

Online media may represent the potential for greater freedom, but authoritarian leaders continue to curtail freedom of expression. As the world marked World Press Freedom Day on May 3, digital rights organization Access Now recorded 20 internet blackouts in African countries last year. Only Asia had more blackouts.

This Week in Culture

Will Fela Kuti finally enter the Rock & Roll Hall of Fame? The Nigerian multi-instrumentalist and arguably Africa’s most influential musician may finally be recognized by the Rock & Roll Hall of Fame. Kuti has already been immortalized in the annals of African music, and his performances, musicianship, and political messaging have laid the foundation for a generation of musicians in Africa and abroad.

His fans, however, say the recognition from an institution that’s often slow to recognize the contributions of musicians of color is long overdue, if only to make sure his music travels even further and is heard by a broader audience.

American bass legend Bootsy Collins saw Kuti in Lagos while touring there with musician James Brown in 1970. “Fela would jump off the stage. He would sing. He would dance. Then he’d jump up on the keyboard. He was really deep,” he told Rolling Stone. “It was just mind-blowing.”

African Voices

Will Eritrean troops leave Ethiopia? “It’s not going to happen,” wrote Seeye Abraha Hagos, a former Ethiopian defense minister and senior member of the Tigray People’s Liberation Front (TPLF), in Foreign Policy. “Eritrea’s involvement in the current war in Tigray is not a border or a national security concern. Instead, it is an opportunity for [Eritrean leader] Isaias [Afwerki] to unleash his wrath on his old enemy, the TPLF.”

Nelson Mandela in Cuba. The late South African president’s friendship with Cuban leader Fidel Castro is well documented. In the New Frame, former anti-apartheid activist Raymond Suttner draws attention to Mandela’s 1991 trip to the island soon after his release from prison. The visit left an indelible mark on Mandela, not only influencing his policies but also his stance during negotiations with the apartheid regime a few years later.

The hustlers of Nairobi. “Hustling in Nairobi is born of urban marginalization and underinvestment in infrastructure, resources, and jobs,” wrote Lewis Mwaura in Africa Is a Country. The repression of the city’s informal traders has even deeper roots, and by harassing vendors, Kenyan authorities are perpetuating a dark colonial legacy.

Lynsey Chutel is the writer of Foreign Policy’s weekly Africa Brief. She is a journalist based in Johannesburg. Twitter: @lynseychutel

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Africa Exploitation

James Ibori: UK returns $5.8m stolen by ex-governor to Nigeria



Some $5.8m (£4.2m) recovered by UK agencies that was stolen by a Nigerian former governor and laundered in Britain have now been returned to Nigeria, the Nigerian authorities say.

Former Delta state Governor James Ibori was convicted of money laundering in the UK in 2012.

Prosecutors say he stole an estimated $165m (£117m) from the oil-rich state.

A Bombardier Challenger jet is among the items listed in court documents for a confiscation order against Ibori.

The £4.2m has been recovered from Ibori’s wife, sister and fiduciary agent, who were also convicted of money laundering.

Observers expect more money to be retrieved from Ibori himself.

Nigeria’s Attorney General Abubakar Malami hailed the return of the loot as a “demonstration of the recognition of reputation Nigeria earns” for managing recovered money, according to a statement from his spokesperson.

Who is James Ibori?

James Ibori went from petty thief to Nigerian state governor to convicted money launderer.

He went to the UK in the 1980s and worked as a cashier at a DIY shop in London.

Ibori was convicted in 1991 for stealing from the store but then returned to Nigeria and got involved in politics.

When he ran for Delta State governor, he lied about his date of birth to hide his UK conviction – which would have prevented him standing for office.

He became governor in 1999 and soon began taking money from state coffers. Delta state is the source of much of Nigeria’s oil.

Why did the British authorities convict him?

The British police began to take an interest in Ibori again in 2005 after they came across a purchase order for a private jet, made through his solicitor in London.

He evaded capture in Nigeria after a mob of supporters attacked police, but was eventually arrested in Dubai in 2010 and extradited to the UK.

He was convicted on 10 counts of fraud worth a total of nearly £50m in 2012.

After his release in 2016, Ibori was placed straight into immigration detention.

The publication of the court judgement revealed a Home Office email which had recommended keeping him in immigration detention to buy time to work out how to recover at least £57m.

What happened to Ibori?

Once he was eventually released, he returned to Nigeria and sued the Home Office for unlawful detention.

Ibori won the case but was awarded just £1 compensation.

In 2020 prosecutors in a UK court asked a judge to make a confiscation order against Ibori of £117.7m.

Court documents list several bank accounts owned by Ibori, as well as more than 10 properties around the world, ranging from flats on London’s famous Abbey Road to a £5m mansion in Nigeria’s capital Abuja.

The documents also list a Bentley car and a Bombardier Challenger jet valued at just under £17m.

How have Nigerians reacted?

The UK authorities’ announcement in March about how it promised to return the money to Nigeria provoked outrage.

The agreement laid out that the money would be used to contribute towards building a bridge and two roads.

The bridge, called the Second Niger Bridge, connects Delta state with neighbouring Anambra State.

But the two roads – the Lagos-Ibadan Express road and the Abuja-Kano road – are more than three hours’ drive from Delta state.

“It is bad news that this money is not going back to the victims,” said David Ugolor the Director African network on Environmental and Economic Justice on Tuesday.

Mr Ugolor is among the critics who argued that this money should have specifically gone to people in Delta state instead.

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