Thursday, March 04, 2010

How tax havens undermine markets - again

We've done a handful of blogs on how the use of offshore structures potentially disguises monopolistic practices in mobile telephony in the developing world, potentially raising costs and curbing prosperity. See here (Kenya), here (India) and here (Belize) just for examples that we've come across. Well, the same thing is possibly happening in Nigeria now. From the Financial Times:

"The Nigerian office of Minerva Group, the main financial backer of a $2.5bn bid for Nitel, the former monopoly in one of the world’s hottest telecoms markets, is hard to find.

"The Financial Times failed to locate it at an address given by a person who had visited it, at the bottom of an unpaved close in Abuja, Nigeria’s capital. . . Minerva’s West Africa representative refused to comment. Minerva was named earlier this month as part of a bidding consortium for Nitel alongside China Unicom, China’s second-biggest telecoms operator, and GiCell, a small local telecoms company. The winning consortium, called New Generation Telecommunications, described Minerva as its “financial backbone”."

So who is this company?

"Nigerian bankers and business people have struggled to track the group down to its Dubai headquarters."

And why Dubai? Well, this might be a clue. Will this be an example of Africa's growth potential and democratic accountability being curbed, on account of offshore secrecy?


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