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AFRICAN ANTI-CORRUPTION DAY

Step up fight for return of stolen money

AU Executive Council declared July 11 as the day to mark the AU Convention on Preventing and Combating Corruption.

In Summary

• This year’s theme is ‘Towards a Common African Position on Asset Recovery’

• African countries need to seriously reflect on and work towards developing a common position on asset recovery if it is to bear fruit

Today, July 11, the continent marks the Third African Anti-Corruption Day. The day provides a good opportunity to reflect on the progress made and the challenges faced in the fight against this obstacle that has undermined development in Africa for so long.

The African Union Executive Council declared July 11 every year as the day to mark the AU Convention on Preventing and Combating Corruption (AUCPCC).

The day, first marked in 2017, aims at giving prominence to the fight against graft in the continent. The AU then declared the following year, 2018, as the African Anti-Corruption Year.

 

Sixteen years after the adoption of the AUCPCC Convention in Maputo, Mozambique, on July 11, 2003, much still needs to be done to wrest the continent from the grip of the malaise.

In most countries, corruption continues to gnaw at efforts aimed at promoting good governance, social and economic change, peace and security. The AU knows that if corruption is not dealt with, Agenda 2063 and its first 10-year Action Plan, as well as the 2030 global plan for sustainable development, will never be realised.

So far, 40 AU member states have ratified the Convention, and there is hope of the remaining others doing so in due course. Most of the countries that have signed the Convention have made positive steps, including the establishment of national laws and the creation and establishment of anti-corruption agencies.

Accordingly, the frameworks for combating corruption and as well as potential areas for technical assistance must be identified and action plans developed.

Significantly, the theme of this year’s African Anti-Corruption Day is 'Towards a Common African Position on Asset Recovery', reflecting the burning desire by Africa to have stolen money stashed in foreign countries returned to develop the continent.

Asset recovery is a key strategy in the fight against corruption. This is a pillar African countries need to seriously reflect on and work towards developing a common position if the venture is to bear fruit. Accordingly, the frameworks for combating corruption and as well as potential areas for technical assistance must be identified and action plans developed.

Because of rampant corruption, illicit financial flows from Africa to, especially Europe and America continues to flourish unabated. This is having a drastic negative impact on the economies of Africa because money that should be circulating in the economies as investment and taxes paid into public coffers is ending up abroad, and or stashed in the accounts of corruption mandarins.

Money that should be spent on providing services to the mostly poor and vulnerable populations is syphoned off through embezzlement.

 

It is estimated that Africa loses in excess of $50 to $60 billion (Sh5.14-Sh6.17 trillion) every year through illicit outflows. In 2017, Global Financial Integrity estimated that Kenya lost over Sh1.06 trillion in accumulated illicit flows since 1970, being the worst case in Africa.

Juxtaposed with the grim poverty figures, the amounts involved are shamefully humongous. In Kenya, for example, the number of people living in poverty remains considerably large, yet billions of dollars stolen from the people lie idle in far-flung lands.

In a population of some 50 million, about 18 million people cannot afford to meet their basic needs. So many people stay in poverty because corrupt officials have siphoned billions of dollars out of the economy.

Like elsewhere in Africa, money is wasted in overpriced works by unfit companies chosen after having paid hefty bribes. Some are paid for non-existent works. These bribes may also be syphoned abroad by corrupt public servants that benefit from them.

That there has been little progress should motivate African countries to step up the fight. Yes, there have been seizures, confiscations, management, return and disposal of some stolen assets by various recipient countries. However, only small amounts of resources have been returned to the countries of origin.

These are just examples of how illicit financial flows reduce the resources available to reducing poverty. The consequences are dire: less food for the poor, fewer hospitals and schools, inadequate number of police officers, fewer or lack of roads and bridges to facilitate trade.

To add insult to injury, governments are forced to reallocate state resources from other public investment in order to fight corruption.

Matters become worse when it is understood that money laundering harms the financial sector as it undermines the capacity to attract investors and to fuel the economy.

While it is not easy to quantify the goods and services citizens could have received had these funds been put to proper use for development, it has been estimated that every $100 million recovered could, for example, fund full immunisations for four million children or provide water connections for some 250,000 households

The emphasis on this day on recovery and return of stolen assets is deliberate as it has been identified in the Addis Agenda as a crucial element towards the financing of the 2030 Agenda for Sustainable Development.

Besides, the return of the proceeds of corruption to the victim country is a “fundamental principle” of the United Nations Convention against Corruption.

But even as African countries fight to have all her assets back, there remains a dispute on how this should be realised, particularly when the victim country’s government is highly corrupt.

There is debate on whether to send recovered stolen assets to victim countries run by corrupt governments. Some argue that such return to a highly corrupt government frustrates the Convention’s most basic purpose — the prevention of corruption.

Before the OECD can fully cooperate, Africa must speak on this subject with one voice. All states should ratify the Maputo Convention, enact anti-graft laws and establish credible agencies.

Stakeholders such as the UNCAC Coalition’s Civil Society Working Group on Accountable Asset Return have pushed for clear global principles which include accountability and transparency in line with UNCAC Article 9.  

Such transparency should include publication of amounts recovered and to be returned, via the media and on government websites, prior to return, as well as the date the money is to be returned and the modality of return.

These funds should be allocated to support meaningful implementation of SDG 16 and to compensate the poorest sections of society most harmed by corruption. Today’s occasion should be part of efforts to find direction in these debates. It an opportunity for African nations to unite and amplify their voices in demanding for the return of these assets that rightfully belong to the continent.

That there has been little progress should motivate African countries to step up the fight. Yes, there have been seizures, confiscations, management, return and disposal of some stolen assets by various recipient countries. However, only small amounts of resources have been returned to the countries of origin.

Statistics are not easily available as surveys on asset freezing and return are not prepared every year, but in a 2014 survey of OECD members, foreign assets totaling $1.4 billion were frozen between 2010 and 2012, but only $147.2 million was returned to the country of origin.

The success of Africa’s push for the return of her assets depends on the level of cooperation from OECD countries. If all of them can establish legal and operational frameworks to investigate and prosecute offenders and to respond rapidly to developing country’s requests for mutual legal assistance or to an urgent request to freeze assets, there will be good progress.

OECD countries should therefore enforce more strictly the standards set by the Financial Action Task Force, particularly in conducting due diligence of politically exposed persons and establishing the real ownership of companies and trusts.

OECD countries should also put in place systems that more actively and effectively sanction overseas bribery payments. They should also provide better protection for whistleblowers.

They should also improve information sharing among jurisdictions and institutions and encourage and support developing countries in investigating corruption and managing returned assets.

However, before the OECD can fully cooperate, Africa must speak on this subject with one voice. All states should ratify the Maputo Convention, enact anti-graft laws and establish credible agencies.

The African Anti-Corruption Day is a reflection of the continent’s desire to end corruption and pursue the return of her asset.

Secretary/Chief Executive Officer, Ethics and Anti-Corruption Commission