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Capital Flight and Tax Havens in Africa

5 min read.

One of the many strengths of the book, is the representation of experts from the Global South. This can be seen in the make-up of the team of this collection: Thirty in total, they include experts, academics, activist, political and economic advisors, and importantly come from a variety of backgrounds and geographies.



Capital Flight and Tax Havens in Africa

Odd-Helge Fjeldstad, Sigrid Klæboe Jacobsen, Peter Henriksen Ringstad, Honest Prosper Ngowi Lifting the veil of secrecy: Perspectives on international taxation and capital flight from Africa (Bergen: Chr. Michelsen Institute, 2017). The book is available as open source and can be accessed here.

This is a timely collection. Published when newspapers are saturated with tax-related scandals and fraud allegations, the book analyses some of the main issues surrounding illicit financial flows, in particularly concerning tax heavens. The focus of the book is Africa – the continent that suffers most from capital outflow, not only but especially in terms of economic development. Targeted at, among others, policy makers, tax practitioners, civil society organisations, students and researchers, the aim of the book is to contribute to widening the debate around tax havens and offer policy-relevant data and findings.

The book starts by considering the scale of the problem. Loss to African countries in corporate tax evasion is higher than anywhere else in the world – with a tax system which enables tax avoidance. Particularly egregious is the behaviour of multinational companies in the extractive industry who pay absurdly small amount of tax by registering profits to tax havens. Among the continent’s rich wealth is frequently hidden in havens outside national tax authorities and beyond judicial reach.

As the book tells us, ‘the global network of offshore financial centres … popularly known as ‘tax havens’ or ‘secrecy jurisdictions’ … make it possible for rich elites and large multinational companies to drain large amounts of wealth out of Africa.’ Many of these tax havens are located in predictable places, small tropical islands such as the Cayman and the British Virgin Islands, but also in rich OECD countries such as Ireland, the Netherlands, Luxembourg, Singapore, and the United Kingdom.

Despite the notorious difficulties in assessing the scale of the problem, the authors present some shocking figures. Globally, there is approximately USD 8 trillion of personal financial wealth in offshore accounts. This figure rises to USD 32 trillion when tangible asset like property, artwork and jewellery are included. Yet as a proportion of total wealth, Africa is the most afflicted continent in the world. ‘Africans hold USD 500 billion in financial wealth offshore, amounting to 30% of all financial wealth held by Africans.’ In terms of lost taxation from this ‘flight’, it is suggested that African countries are deprived of an estimated annual figure of USD 15 billion. However, as the book states, ‘The inclusion of non-financial wealth, or higher estimates from available literature, could push this figure as high as USD 60 billion annually.’ In short, the situation is catastrophic.

One of the many strengths of the book, is the representation of experts from the Global South. This can be seen in the make-up of the team of this collection: Thirty in total, they include experts, academics, activist, political and economic advisors, and importantly come from a variety of backgrounds and geographies. As a few examples: Professor Annet Oguttu – first black woman to get a doctorate in tax law at the University of South Africa, where she later became the first female Professor; Dr Honest Prosper Ngowi – an Associate Professor of Economics at Mzumbe University in Tanzania; Professor Leonce Ndikumana – Professor of Economics University of Massachusetts at Amhest and Dr Caleb Fundanha – the Director of the Institute for Finance and Economics and Chief Executive Officer of Macroeconomic and Financial Management Institute of Eastern and Southern Africa.

The volume is organised into five sections: each one opens by introducing a topic and is then complimented by shorter articles with more in-depth discussion and case studies. Setting the scene in the introduction, the authors take up, what seems an unwieldy task: not only understand the impact that tax havens have in economic terms on the continent, but also explore ways in which the global networks of offshore financial centres affect domestic tax bases, political institutions, and citizen’s participation. To note briefly, there is no clear explanation as what kind, or in what, the ‘citizen’s participation’ is referred to.

After defining some important concepts and giving an overview of the historical evolvement of tax heavens, the book moves to talk about its estimated scale and impact on the African continent as well as about the intricate relationship between capital flight, global corporations, bank secrecy and the elites, i.e. the power-accumulation nexus.  Importantly, there is an acknowledgement of the difficulty in quantifying the exact amount of money being lost due to, amongst other things, the mismatch in trade statistics and often inaccurate methodologies used to estimate losses. This is an argument that is widely adopted by the international community as the search for more reliable methodologies continues.

The actors involved in the network of tax heavens, including the so-called ‘Big Four’ (EY, Deloitte, PwC and KPMG) are explored in detail. These actors – also referred to as ‘lobbyists’ – according to the study, play one of the central roles in pushing for tax incentives and benefits for multinational companies, to the extent that this influences legislation in certain countries as explored by John Christensen here. The exploration of the extractives sector on the African continent and its relationship with tax havens is probably one of the most insightful parts of this collection. Detail-rich, it illustrates how multiple actors (including domestic players), navigate their way in interests-driven financial schemes in order to – to put in simple terms – squeeze as much revenue and pay as little tax.

The final section of the book gives an overview of some of the actors involved in trying to tackle issues associated with tax havens as well as the measures and initiatives these actors are supporting. The overview is comprehensive, covering the historical development of these initiatives, mentioning the current changes and importantly underlining the importance of building capacity in the African countries in tax administration, including taxpayer services and increasingly important e-tax systems.

Structurally, the book has various shortcomings. Due to the fact that some of the shorter articles in the five sections were not written specifically for this collection (but rather adapted), at times there is a sense that the information is fragmented. The lack of cross-referencing within sections and shorter articles throughout the book also adds to this effect. Moreover, there are several times where the same concepts are being defined and explained repeatedly, while it helps in our understanding, this repetition breaks the flow of the book.

What the structural inaccuracies also do is that they take away from effectively conveying the response to research objectives that were laid out at the start of the book. The data and analysis to further understand how tax havens affect domestic taxation bases, political institutions and ‘citizen participation’ gets somewhat diluted in lengthy explanations. While it is understandable that when trying to unveil the complex financial and political structures at play, there is a sense that there is not enough emphasis on how the material connects to the research questions. What is also lacking is a conclusion. The book seems to end abruptly and leaves the reader ‘hanging’; I would have liked to see the analysis being comprehensively concluded.

What the book does do however, it is it opens up a much-needed debate around the importance of looking beyond financial impacts of tax havens to start a wider discussion on its effects on domestic law-creation, people’s perceptions and attitudes toward taxation, in order to understand the mechanism and policy that can be used to deter the abuse of the global financial system. The book offers a solid grounding that can inform future research, studies and debates. Available as open source, graphically appealing and detail-rich, the book is an accessible resource for those interested in peering behind the veil of secrecy.

Lifting the Veil of Secrecy is available as open source and can be accessed here.

This article was published in the Review of African political Economy (ROAPE).

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Nataliya Mykhalchenko graduated from the University of Leeds in 2016 with a BA in International Development. She now works in London for a company that helps education, research, healthcare, non-profits and civil society institutions. Nataliya started researching anti-fraud initiatives on the African continent in 2015 as part of a funded five week Leeds University Summer Research Internship Scheme. In 2016, supported by ROAPE, she continued her research. To date she has looked at anti-fraud measures in South Africa, Ghana, Botswana, Nigeria, Tanzania, Kenya, Malawi, Rwanda and Zambia. Nataliya’s research was linked to the ongoing work of ROAPE’s Jörg Wiegratz at the University of Leeds on the political economy of anti-fraud measures in the Global South.


No Country for Our Real Heroes: A Monument for the Mau Mau at Last, but No Land

Kenyans choose to forget that the Kenya Land and Freedom army (also known as Mau Mau) did not fight for a monument. They fought for land.



No Country for Our Real Heroes: A Monument for the Mau Mau at Last, but No Land

Mau Mau heroes now have a monument, but no land. Earlier this month, they were invited to the unveiling of this monument in Nairobi; a “memorial to the victims of torture and ill treatment during the colonial period 1952-1960.” They turned up in large numbers, the majority wearing bright red t-shirts emblazoned with the words “Shujaa wa Mau Mau” – Mau Mau hero.

In their hundreds, they were a sea of red and black amidst the green of Uhuru Park, watching avidly for when their monument would be unveiled in the section of this commons called “Freedom Corner.”

And while the British and Kenyan government and collaborating NGO representatives, all younger than the actual heroes, were sitting within an expansive white tent, these aging freedom fighters were sat under the hot sun, waiting for the official ceremony to begin. Some were said to have arrived as early as 6 am.

Finally, we could say, at least some recognition for our people who were classified as terrorists until 2003. Finally something to honour the bravery of all freedom fighters and the significance of that period in our history.

But, as social movement activist Gacheke Gachihi asked, what can we gain from a narrative that continues to posit them as “victim” instead of victor over the British? And even while recognizing the inhuman excesses meted out against them, what are the motivations for a rewriting of history that perpetuates a narrative of their victimhood and, as is appearing to be more and more the case, erases the full extent of their struggle?

Spoken interminably at the monument unveiling was the word “reconciliation,” followed closely by “ending” and “closure.” It seems that this monument is also meant to make us reconcile our past with all features of British imperialism; the £90,000 monument (an incessantly repeated figure) is where all further questions about the ravages of empire stop.

Inevitably, it seems also to be the national burial site for the land question.

Not one mention of it anywhere at this launch.

It was the elephant in the room, the solid yet invisible presence that no one spoke about. It was clumsily replaced by other buzzwords: reconciliation, closure, victimhood.

And while they turned up in their numbers, the show could definitely have gone on without the Kenya Land and Freedom army for in many ways these heroes were the appropriate props for the speeches and photo opportunities of innumerable people who were not Mau Mau, yet who will revel in the after glories of the praise that will come from being “important” at this event.

It is reported that these important characters then later went off to drink at the Norfolk, the oldest and, undoubtedly, most colonial of Nairobi’s hotels (even President Roosevelt stayed here in 1909 when he came to shoot half our wildlife to “collect specimens for the Smithsonian institute”) and whose terrace is “rumoured” to be the site where Africans were often shot for sport.

Meanwhile the actual shujaas then walked home, 80-year-old grandmothers bent over with no shoes walking through busy Nairobi to go back to their rural homes.

And in the the Nairobi headquarters of the Mau Mau, Mathare constituency, life continued as normal for Monica Wambui, a 101-year-old Mau Mau woman who has been living in her mabati tin house for the last 50 + years, and with no water, permanent shelter and still having to find her own firewood to cook.

And for this shujaa wa Mau Mau from Mathare, tells it all.

In this same place the descendants of these two heroes are caught in the spate of police killings that Mathare Social Justice Centre is working to document. And there will never be monuments for these young people who, in many ways, are also fighting for land.

A week later we are still being told about the £90,000 monument to “victims,” and being assailed constantly by the supposed generosity of the British government who solicited this monument at their “own” expense  (one twitter commentator remarked that this money is likely to have been easily raised from all the exorbitant visa fees Kenyans are charged to visit the UK) .

And in all the hyper-buzz about this memorial we choose to forget that the Kenya Land and Freedom army did not fight for a monument.

They fought for land.

This post is from a partnership between Africa Is a Country and The Elephant. We will be publishing a series of posts from their site once a week.

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I Am Samuel

The government should support our creative industries, and allow every Kenyan’s voice to be heard, and everyone’s point of view to be listened to.



I Am Samuel

“I may not agree with what you say, but I’ll defend to the death your right to say it.”

We first got introduced to independent documentary filmmaking in 2013, at a gathering of Kenyan filmmakers in a small office of the nascent DocuBox film fund. Pete Murimi, director of I am Samuel, and I, producer, had no idea that it was possible to tell stories independent of a broadcaster or funder. As a service producer, I was used to receiving agency or broadcaster briefs and working according to spec. Pete, as a filmmaker at the UN, was familiar with that style of telling stories.

This intimate gathering of filmmakers (which included directors of The Letter, Kenya’s submission to the Oscars in 2020, and the director of New Moon, winner of Oscar-qualifying 2018 DIFF Best Documentary award) did not know that it was about to embark on an arduous multiple-year journey to tell their stories, and self-release at global festivals. But we all somehow made it through the strength of community and the determination to have complete agency over the stories we felt were important to tell. Pete and I were committed to telling stories of outsiders, people who did not accept the way things were, just because.

Voltaire’s quote above is our fallback when asked about freedom of expression, the freedom we committed to when we decided we wanted to tell these stories. We are a diverse country, with complicated, layered realities. Allowing storytellers to tell these stories, no matter whether you agree with them or not, is a move towards greater inclusivity, democracy, and tolerance.

Shot over five years, I Am Samuel tells the story of a queer man navigating the tension between his life in Nairobi and his rural childhood home. He and his partner Alex want to build a life together, but his father and mother want him to get married, have kids, and live the exact kind of life they have.

Allowing storytellers to tell these stories, no matter whether you agree with them or not, is a move towards greater inclusivity, democracy, and tolerance.

This was not an easy documentary to make. Samuel had to give up a lot of his privacy, and trust Pete and I, who were first-time independent filmmakers, balancing making this film with our day jobs. But Samuel allowed us into his life, without restriction. And that was a privilege that we could not afford to take lightly. Alfred Hitchcock once said, “In fiction films, the director is God; in documentary, God is the director.” We believe this to be true; life as it happens, with all its messiness and unpredictability, is what makes character-driven verité styles so difficult to do, but ultimately so rewarding.

I am Samuel was released at Hot Docs 2020, an international film festival that showcases stories from across the globe. It then toured the Human Rights Watch Film Festivals the world over and showed in South America, the Netherlands, and the UK. But our eventual goal was always to bring it back home. Because we felt this was a Kenyan story, we knew it would connect with audiences back home; mostly because Samuel’s lived reality as a queer, religious, traditional man is not unique. We applied for classification in Kenya to be able to screen it locally, and waited weeks for a response. We were asked to attend a meeting at the KFCB offices on Thursday 23rd September, but we were unable to make it in person. We then heard about the press conference, the ban, and the press release later that Thursday.

We are yet to receive a letter in writing or a certificate that shows our Kenyan rating.

We were deeply disturbed by the discriminatory language used in explaining the ban: they described it as “blasphemous” and “unacceptable, and an affront to our culture and identity.” The restricted classification of the film contained a number of inaccuracies. It referenced a “marriage” that never happened and said we were “promoting a homosexual lifestyle”. The board noted a “clear and deliberate attempt by the producer to promote same-sex marriage as an acceptable way of life. This attempt is evident through the repeated confessions of the gay couple that what they feel for each other is normal and should be embraced as a way of life, as well as the characters’ body language, including scenes of kissing of two male lovers.”

We were simply filming people’s lived experiences.

By banning the film, KFCB is silencing a real Kenyan community and trampling on our rights as filmmakers to tell Samuel’s story. Every story is important. And we are all equal in the eyes of the law and before God, in line with the religion the film board is invoking in this ruling. The arts – from filmmakers and novelists to painters and comedians – hold a mirror up to society and show us some of the difficult realities from which we often try to shy away.

The Kenya Film Classification Board is trying to censor a part of Kenya that has always existed, is a lived reality for millions and will always be a part of us. Several high-profile Kenyans are queer, including government politicians and public figures, but the intolerant atmosphere created by discriminatory statements like those of the KFCB make it impossible for them to live openly – and allow other Kenyans to continue to discriminate, wrongfully so, against LGBTQ+ Kenyans. As I Am Samuel shows, prejudice forces LGBTQ+ Kenyans to live in the shadows, fearful of being beaten up, fired from their jobs, or evicted from their homes. Stigma puts pressure on their families, who fear that if their neighbours find out they have a gay child, they will be ostracised.

The arts – from filmmakers and novelists to painters and comedians – hold a mirror up to society and show us some of the difficult realities from which we often try to shy away.

In their press statement, the KFCB appealed for content that “promotes Kenya’s moral values and national aspirations”. What are these values? The KFCB is assuming that the values of all Kenyans are the same – conservative and Christian. But Kenya is a diverse country and it is the responsibility of our government to represent and serve everybody. Our differences should be acknowledged as a strength, and shown through our filmmaking. Kenya is Africa’s third biggest film producer, after Nigeria and Ghana, making 500 films a year. African filmmakers are attracting international acclaim. Softie won an award at the prestigious Sundance Film Festival last year. The United Nations recently said that the African film and audio-visual industry generates US$5 billion a year and has the potential to create 20 million jobs. I Am Samuel is the third LGBTQ+ film to be banned by the KFCB, following Stories of Our Lives (2014) and Rafiki (2018). Among other movies that have been banned by KFCB are The Wolf of Wall Street (2014) and Fifty Shades of Grey (2015).

Our film is a true record of Samuel’s lived experience Samuel. Gay African men, gay African people, should be recognised and have their rights respected. This includes the right to freedom of expression, freedom of association and freedom from discrimination. Samuel himself is a strong Christian, and Kenya has several LGBTQ+-friendly churches that provide a place for queer Kenyans to worship together. Banning of films is a blow to Kenyan filmmakers as our audience is inherently local, and we need to have a wide distribution to reach audiences, to go regional, to go global, for so many reasons: telling our own narratives, correcting the misguided ones, creating jobs, and widening our own imaginations, exponentially, of what is possible for us as Kenyans. The Lupita Nyong’os and Edi Gathegis of this world should not only exist in a rare and unexplored vacuum.

It is time for the government to accept and support our creative industries, and allow every Kenyan’s voice to be heard – because the banning also leaves us with questions about whether everyone’s point of view truly is listened to. The documentary has been released across Africa on the AfriDocs website, and we hope that African audiences will still get a chance to watch a film that is not accepted in its home country. . . yet.

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Freedom After Speech: Angolan Police Detain, and Beat Journalists Covering Protests

Angolan police should stop arresting and assaulting journalists and allow them to do their jobs freely, the Committee to Protect Journalists said today.



Freedom After Speech: Angolan Police Detain, and Beat Journalists Covering Protests

At least six journalists and one media worker were arrested – with four held for more than two days – and another was harassed while covering anti-government protests by civil society groups and opposition parties in the capital, Luanda, on October 24, according to news reports and Teixeira Candido, secretary general of the Union of Angolan Journalists (SJA), who spoke with CPJ via messaging app. All those detained were released without charge, Candido said.

“Angolan authorities must stop harassing and detaining journalists who are simply doing their work and must allow them to report freely,” said Angela Quintal, CPJ’s Africa program coordinator. “That three of the detained journalists and a driver were finally released without charge after more than two days in custody shows the police’s vindictiveness, as they were well aware that the journalists were simply covering the news of the day.”

Police forced two journalists from privately-owned Radio Essencial, Suely de Melo and Carlos Tome, photographer Santos Samuesseca of the radio station’s sister publication Valor Económico, and their driver, Leonardo Faustino, out of their car around 10:30 a.m. while the journalists were covering the protests, according to a statement by Evaristo Mulaza, the director of GEM Angola Global Media, the company which owns both outlets. In the statement, sent to CPJ via messaging app, Mulaza said that the journalists had identified themselves to police as journalists on assignment. He said that police beat the journalists and seized their cell phones and a camera. Geralda Embalo, the executive director of Valor Económico and sister publication Nova Gazeta, later provided further details of the assault via messaging app, saying the four were beaten with batons and kicked by police: “Nothing broken, [they were] just bruised, terrified humiliated…” Embalo said that police told De Melo: “Instead of covering demonstrations you should be looking for a husband.”

The four were taken to various police stations, until they were finally detained in Luanda’s Provincial Command, Mulaza said. The journalists and driver were interrogated by a public prosecutor and released without charge at 3 p.m. yesterday, he said, adding that no official had explained why the four had spent more than 50 hours in police custody. As of today Embalo said that the journalists’ equipment had not been returned.

CPJ spoke with Angolan police spokesman Nestor Gobel via messaging app on October 25, the day before the journalists and driver were released, and he told CPJ that police were working on getting the four out of custody. “Don’t worry things will be ok,” he said. Gobel did not respond to follow-up messages and a phone call regarding that and other incidents sent yesterday.

In a separate incident, two journalists who work for the private broadcaster TV Zimbo, Domingos Caiombo and Octávio Zoba, were detained and forced to delete their images of the protest on October 24, before they were released on the same day without charge, said Candido of SJA.

In another incident, two journalists, freelancers Osvaldo Silva and Nsimba Jorge who contribute to the French news agency AFP, were assaulted and harassed by police during the protests, according to both journalists. Silva told CPJ via messaging app that when he arrived at the protest, he was questioned by the police. He showed them his press credentials, but they insisted he needed police authorization to cover the protests. He said police hit him with their hands and truncheons, threw him on the ground and kicked him, and then bundled him into a police vehicle and confiscated his phone. He said he was taken to a police station and was released the same day but was unable to recover his phone until later. Silva said he returned to the protest, where police hit him on the buttocks, demanded his press credentials, and prevented him from taking photographs. Silva said he then left the protests. Nsimba told CPJ via messaging app that police wanted to confiscate his camera and when he resisted, they forced him to delete everything on his memory card; he said he was not detained.

In a statement provided to CPJ via messaging app, AFP’s Africa director, Boris Bachorz, said the agency strongly condemned the assault and urged Angolan authorities to ensure journalists can work without hindrance or threat. Candido urged the police to justify why they were repeatedly trampling on the rights of journalists and violating the right to media freedom recognized in Angola’s constitution.

Presidential spokesman Luis Fernando and Governor of Luanda Joana Lina did not reply to text messages seeking comment from CPJ yesterday or on October 25.

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