Today is International Anti-Corruption Day. We’re highlighting stories related to corruption and government accountability. We look first at the aftershocks of corruption cases in South Africa, Malawi, and the Democratic Republic of Congo. Since corruption is a global problem with myriad enablers, we then look at the potential aftershocks of landmark actions in the US, EU, and UN.

Top News

Inquiry irony: Next week, South Africa’s parliament will vote on whether to launch an impeachment inquiry into President Cyril Ramaphosa. The inquiry would focus on his alleged involvement in the movement and subsequent theft of a large sum of undeclared foreign currency from his game farm. The potential inquiry is not without irony: Ramaphosa has strengthened oversight institutions deliberately weakened by his predecessor, Jacob Zuma. It appears those efforts may be working as intended, potentially at Ramaphosa’s expense. That is cause for optimism that South Africans may yet get their democracy to work for the masses and not just a privileged few. Though with several other high-level officials implicated in corruption scandals, there’s much more work to be done.

No good deed: Malawian police arrested the head of the country’s anti-corruption bureau, Martha Chizuma, on charges of prejudicing judicial proceedings. Chizuma has been investigating Vice President Saulos Chilima, who was arrested last month on charges of graft over a bribery scandal. The investigator’s arrest ostensibly was in response to a leaked audio recording in which she accused the country’s president and other government officials of not supporting the bureau’s investigation into the vice president. Chizuma has been instrumental in the arrests of other public officials for corruption, including the anti-corruption bureau’s former director and the former director of the country’s Public Procurement Agency. Later, Chizuma was released and President Chakwera condemned her arrest. Some Malawians are calling for President Chakwera to fire the Director of Public Prosecution, who ordered Chizuma’s arrest. Hollywood and Nollywood script-writers, take note.

A bad business model?: Multinational mining company Glencore will pay the Democratic Republic of Congo $180 million in fines over alleged corrupt practices in the country from 2007 to 2018. The DRC settlement is the latest outcome of a series of investigations into Glencore’s alleged use of bribery and market manipulation in several countries, including Brazil, Cameroon, the DRC, Equatorial Guinea, Ivory Coast, and Venezuela. The DRC settlement and those with the UK, US, and Brazil put the company on the hook for roughly $1.3 billion in fines. That represents just 7% of the $18.9 billion in record profits the company reported in the first half of 2022. The DRC’s compensation could come at a cost: the terms of its settlement with Glencore prevent it from seeking future compensation under ongoing Swiss and Dutch investigations into the company’s misconduct. 🤦🏽‍♀️

Enabling behaviour: Critics say that Ugandan President Yoweri Museveni should not be invited to the US-Africa Summit, citing his record of alleged corruption and human rights abuses. Museveni is one of 49 invited African heads of state. Advancing “good governance” is on the crowded summit agenda, though it’s unclear how substantive any discussions about governance will be. The first such summit, held in 2014, yielded lots of promises with little accountability. A large group of African and US organisations – led by the FACT coalition and the Stop the Bleeding Consortium in Africa – are calling on leaders to advance a new partnership to curb illicit financial flows, corruption, and tax dodging. Meanwhile, US legislation that would help crack down on money laundering into the US has stalled. The “Enablers Act” would require businesspersons who facilitate large cash transactions – such as lawyers and investment advisors – to perform basic due diligence on their clients. The bill passed the House but is being held up in the Senate, with just days left before the Congressional clock strikes midnight and the bill dies a quiet death.

Secret Santa: A court in Europe delivered an early holiday present to Russian oligarchs, kleptocratic leaders, and other corrupt actors that rely on secrecy to move and hide illicit money. The European Court of Justice (ECJ) recently ruled that the portion of a European Union law that required public access to company ownership (also known as “beneficial ownership”) registers is invalid. Only legal authorities and others with a legitimate interest will have access. The ruling’s implications could ripple far beyond the EU, which had helped establish a gold standard for transparency now at risk of being weakened. Advocates (including ONE) have long argued that public registers are the best solution to tackle corruption. The Panama Papers, the result of cross-border collaboration by investigative journalists, have resulted in government investigations in over 80 countries and the recovery of at least $1.36 billion, much of it in European countries. 💸 Even governments tacitly recognise the value of expanded access to the data, sometimes haranguing journalists for access to leaked information that could unlock legal investigations.

Death and taxes: 37% of multinational corporations’ profits globally were shifted to tax havens in 2019, resulting in a tax loss of roughly €250 billion. That’s up from just 2% in the 1970s, marking a stunning increase despite recent efforts to combat the problem. In 2015, the OECD – at the G20’s behest – agreed on a plan to curb tax avoidance. New research, however, suggests the OECD’s approach is inadequate at best and failing at worst. Lower-income countries, which rely heavily on corporate taxes, are disproportionately impacted by tax avoidance. African countries lose the equivalent of nearly 30% of their public health budgets to the problem. That just might explain why lower income countries have been highly critical of the OECD process and pushing for the UN to set global tax policy instead. ¯\_(ツ)_/¯

Beasts of burden: A month-long international police effort seized 2,200 wildlife and forestry products smuggled between 125 countries and led to the arrest of hundreds of people. Imagine what they could do with two months. 👀 Corruption is a key facilitator of the illegal wildlife trade: border guards, law enforcement, prosecutors and other officials are often pressured or brought into these lucrative schemes. A kilogram of rhinoceros horn is worth up to $400,000 – more than four times the going rate of heroin.

From the ONE Team

• ONE’s David McNair breaks down the European Court of Justice’s decision on company ownership and why it got it wrong.

The Numbers

• $483 billion: The estimated tax lost annually due to global tax abuse.
• 3.7%: The estimated GDP loss in Africa stemming from illicit financial flows ($88.6 billion in 2020).
• 2: The number of African countries (Benin and South Africa) that provide sufficient budget information to their citizens.

QUOTE OF THE WEEK

"Anonymous companies are often used as the get-away vehicles of the corrupt, helping syphon these funds out of Africa – often to Europe – denying countries revenues that could be used to boost economies, and fund health and education systems."

– The Center for Fiscal Transparency and Integrity Watch, a Nigerian civil society organisation

What you should read, watch & listen to

• Corruption in water resources management? Not our job, say water-sector professionals. (The Global Anticorruption Blog)
• Civil society to the US: repair the damage Italy has done to global anticorruption efforts. (The Global Anticorruption Blog)
• We need a pandemic treaty that holds nations accountable. (The Washington Post)
• The East African Crude Oil Pipeline poses a risk not just to the climate but also to marine biodiversity. (The Africa Report)
• Democracies perform better in combating climate change, unless they’re corrupt. (V-Dem)

A look ahead

9-11 December: The 2022 African Economic Conference takes place in Balaclava, Mauritius under the theme of “Supporting Climate-Smart Development in Africa”.

10 December: Human Rights Day.

12 December: International Universal Health Coverage Day.

13-15 December: The US-Africa Leaders’ Summit takes place in Washington DC. See here and here for related events.

The ONE Campaign’s data.one.org provides cutting edge data and analysis on the economic, political, and social changes impacting Africa. Check it out HERE.

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