Tuesday July 10, 2018
Offshore entities are not illegal, but banking secrecy in places like Mauritius and Luxembourg can be used to evade taxes and hide illegally obtained cash.
Corruption drains $148 billion annually from Africa, according to the African Union. At an estimated 25 percent of the continent's average gross domestic product, the AU calls it a huge drain on Africa's productivity.
At the 31st AU Summit in Mauritania last week, African heads of state said they want to prevent billions more being stolen by seeking to abolish banking secrecy and tax havens.
They also discussed a mechanism to return corruptly acquired funds, most of which are hidden in countries that allow the practices.
However, Senegalese tax inspector Elimane Pouye says the fight against corruption in Africa requires more than just statements at international summits.
These measures are usually just a facade, he said, adding that donors put pressure on states to show they are fighting corruption so that they can receive aid.
Elimane Kane, head of LEGS-Africa, a think-tank promoting ethical governance across the continent, says too few African heads of state have taken a stand against corruption.
Paul Kagame has done good work in Rwanda, Kane said, but there are many African leaders who take advantage of tax havens.
The International Consortium of Investigative Journalists has been shining light on the shadowy world of offshore banking with the publication of leaked documents known as the Panama and Paradise Papers.
This year, the ICIJ worked with a network of West African journalists to study approximately 30 million leaked documents, now known as the West Africa Leaks.
Their findings revealed the secret companies and bank accounts of some of the region's most powerful politicians and business leaders.