Ghana - death of a budding tax haven? But is Kenya on the slippery slope?
Concerns about Ghana's ambitions to become a West African regional offshore financial centre led TJN to decide to include that country in the 2011 Financial Secrecy Index. Our research is already well under way, and we will continue to monitor the situation in Ghana, but this news suggests that OECD efforts have rid West Africa of a serious menace. Next steps: Botswana, Mauritius and Seychelles.
Meanwhile, on the downside, Bloomberg has reported this week that Kenya, in East Africa, has ambitions to launch its own offshore financial centre in Nairobi. According to Bloomberg:
The proposed Nairobi International Financial Centre will become a regional “offshore” financial services hub, Alex Owino, a project manager at the ministry, told reporters today in the city. He didn’t give details on how Kenya planned to attract companies to the industry.
Rumours abound about illicit financial flows circulating between Mauritius and Kenya, much of it allegedly involving round-tripping of Kenya capital via Mauritius for re-investment in Kenya under the guise of foreign direct investment. Nairobi's plans to follow Mauritius down this route bode ill. Back to Bloomberg:
Kenya aims to gain a stronger presence in sub-Saharan Africa’s growing financial services market, at present dominated by Johannesburg, South Africa and Mauritius, Owino (a Finance Ministry official) said. The finance industry accounts for 5.4 percent of Kenya’s gross domestic product, the fifth biggest contributor, and has the potential to expand to as much as 15 percent of GDP, Finance Minister Uhuru Kenyatta said at the same event today.
The mind boggles at the prospect of Kenya taking this route. We will be watching very closely.