According to news reports, the managing director of Vodacom Tanzania and other telecom staff have been accused of fraudulent activities which caused the government to lose more than $2.55 million. The government has now charged several executives from the subsidiary of the UK-based Vodafone with “organis[ing] a criminal racket,” which allegedly included the illegal use of network facilities.
For President John Magufuli, who came into office in 2015 on promises to stamp out corruption, the development is promising – but also a reminder of just how far there is to go. Indeed, with powerful multinationals and corrupt staff able to easily exploit the patchy enforcement mechanisms in Tanzania and other countries in the region, it’s fair to say that Magufuli and his peers are facing an uphill battle. In order to get a proper grip on the financial crimes that are still draining African economies, it’s not only African governments that should get involved; foreign governments and businesses, too, must make their own enforcement mechanisms stronger.
Over the years, a lot of these crimes have continued to occur regularly across the continent. And not surprisingly, the situation is worse in countries where not only foreign actors are taking advantage of light enforcement, but governments themselves are also turning a blind eye.
Yves Bouvier’s ‘runnings’ in Angola
Take Angola, a country that – until the last presidential elections heralded the beginning of a gradual turnaround – was ranked as one of the continent’s most corrupt. The country is most notorious for the sharp practices enacted by the Dos Santos clan, which handed over power to current president Joao Lourenco in 2017. Yet the corruption that they allowed to fester in the oil-rich nation was also ripe for exploitation by enterprising outsiders as well.
For instance, the Swiss art dealer Yves Bouvier, who has been under investigation for potential irregularities related to his international business dealings, also managed to use his connections with controversial French fixer Marc Francelet to cosy up to former president José Eduardo dos Santos. According to local Angolan reports, Dos Santos handed a government contract worth €240,000 to Brave Ventures Pte Ltd., a company based in Singapore and owned by Bouvier, for the purpose of improving the public health sector in Angola. Yet after Brave Ventures received the funds, Bouvier allegedly transferred them to himself and never reimbursed the company. Anonymous Angolan sources have also suggested that some funds may have been channelled to Bouvier through an agricultural firm, Agro 88 Angola SA, which they described as “a front company to suck money from Angola.”
Perhaps not surprisingly, however, both government authorities and the international media have devoted far more attention to Bouvier’s alleged crimes in the wealthy nations of Switzerland, Luxembourg, and Singapore than to his dealings in the relative backwater of Angola. Bouvier is best known for his art scandals; he is being sued around the globe by his former clients, including billionaire Dimitry Rybolovlev. He’s also had to face up to accusations from Catherine Hutin-Blay, Picasso’s stepdaughter, that he had stolen some of the artist’s paintings, and Swiss authorities have suspicions over his residence in Singapore, while he continues to use the services of major European banks like HSBC—described by the BBC as a “conduit for drug kingpins and rogue nations.”
This is one of many cases that highlight the need for more attention to be paid to such crimes, particularly the role of foreigners.
Yahya Jammeh’s personal bank account
According to a new analysis by the Organised Crime and Corruption Reporting Project, former Gambian President Yahya Jammeh more or less coordinated the embezzlement of almost $1 billion in public funds over his 22-year rule. The investigation also points out that Jammeh’s network managed to divert, embezzle, and syphon money from a string of public institutions, stealing more than $60 million in pension funds alone.
But he didn’t do this alone. One of the key players in this saga also included a major Western financial institution – the Belgian bank KBC. According to the Mail & Guardian, this bank financed South Africa’s apartheid regime and later overlooked decades’ worth of illicit financial flows from the Gambia.
The string of scandals in South Africa
South Africa, too, has been no stranger to financial crime and home-grown corruption, with the United States and other Western powers even taking the unusual step several weeks ago of writing to President Cyril Ramaphosa to urge him to crack down on corruption in the country. Representatives of the US, Britain, Germany, the Netherlands, and Switzerland warned that unless concerted action was taken, foreign investment in South Africa would be at risk.
Yet considering the recent meddling of Western firms,’ the move was a bit rich.
For instance, a government commission last year revealed how major foreign consulting firms, including KPMG, McKinsey, and Bain & Co. were involved in a series of scandals there, including efforts to “dismantle” the national tax agency to help facilitate alleged graft. KPMG alone has since been forced to lay off more than 1,000 staff after clients dropped them after its auditors did questionable work for South Africa’s revenue agency and helped cause the collapse of a bank. Given all of this alleged exploitation of the situation in South Africa – which took place with nary a glance from their home governments – it’s not surprising that Pretoria called the joint memorandum a breach of protocol.
However, this is not to say that South Africa and other governments are innocent of any wrongdoing and mismanagement. Far from it: in all the cases cited above, home-grown reform efforts will be critical. But for true change to take place, it must be acknowledged that powerful foreign governments and corporations have their own role to play. In Tanzania’s case, for instance, though the government’s recent crackdown on Vodacom is a welcome development, the damage could have been avoided.