Wednesday, March 10, 2010

Ghana - dirty money conduit, via Barclays?

In September 2007 we raised a red flag about the conduct of Barclays Bank, which appeared to be working to help Ghana, an imminent oil producer, become a tax haven. Now we have this, from a Ghanaian news organisation:

"Ghana has been urged to strengthen institutions and master the political will ensure that the country does not become a safe haven for money laundering activities , as its offshore banking ambitions ‘ risk being soft touch magnet for flood of dirty money’."

The warning comes from a London-based attorney, John Hardy. His comments are right, as far as they go, but what he should have said was that turning itself into a secrecy jurisdiction is a recipe for further undermining the economies of African countries (we'd be particularly worried about oil-rich Nigeria.)

As with oil, the provision of financial secrecy for outsiders provides a source of easy rents that create no links of accountability between rulers and citizens - and thus this plan, if it comes to fruition, is likely to prove to be a curse on large numbers of ordinary Ghanaians too.

As Jeffrey Owens of the OECD rightly said in January:

"The last thing Africa needs is a tax haven in the centre of the African continent."

Well said, Mr. Owens.


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