City of London wants to help create a new African tax haven

Posted from the Treasure Islands blog:

From Kenya's Standard (hat tip Martin Kirk)

Nairobi’s vision of following the footsteps of London, and becoming a global financial centre, has started taking shape with a financial firm appointed to deliver the work — TheCityUK — seeking partners to participate in the development of the project.

Let's see. Who is TheCityUK? Well, on their "Who we are" page, we have:

"TheCityUK champions the international competitiveness of the financial services industry. . . The President of the Advisory Council is the Lord Mayor."

That is the City of London Corporation, in partnership with the financial services industry. And the Standard continues:

"The bodies appointed to deliver the work, under the sponsorship of the Lord Mayor of the City of London and the Ministry of Finance in Kenya, are TheCityUK and the Kenyan Capital Markets Authority (CMA). . . . The Mayor said he looked forward to the successful conclusion of negotiations between TheCityUK, and CMA, in support of Nairobi’s plans to develop as an International Financial Centre."

Now make no mistake about this. I have seen "International Financial Centre" used many times before: it is a deliberate euphemism for 'tax haven.' They will try to get this thing off the ground through a mixture of new financial services, lax financial regulation, and almost certainly a strong measure of secrecy. These offerings are all in the nature of what they call a 'competitive' financial sector.

Some other efforts to launch African tax havens - notably Ghana and Botswana - have met with little success, and one reason is that many people don't want to send their money to an African country. But some have been more successful, notably Seychelles and Mauritius, with a range of harmful effects on countries in the region and beyond.

A space to watch, very closely. Read more about the background to all this, including the City Lord Mayor's role in trying to set up an offshore centre in Ghana, in Ingrid Johansen's excellent paper, here.