Panama Papers: African Union Calls for Investigations

Former South African President Thabo Mbeki in Khartoum.
Former South African President Thabo Mbeki, pictured meeting Sudanese President Omar Al-Bashir in Khartoum, Sudan, August 3, 2015, has called for a crackdown on illicit financial outflows from Africa in light of the Panama Papers leak. EBRAHIM HAMID/AFP/Getty Images

The African Union (AU) has called on all African countries to investigate persons and companies implicated in the Panama Papers leak.

Scores of high-profile Africans —including the nephew of South African President Jacob Zuma and the Nigerian Senate president, Bukola Saraki—have come under scrutiny after being linked to offshore accounts and shell companies in the leak of 11.5 million tax documents from Panamanian law firm Mossack Fonseca. South Africa's Finance Minister, Pravin Gordhan, has ordered an investigation into citizens of the country named in the Panama Papers, but other African countries have been slower to respond.

Former South African President Thabo Mbeki, who heads up the AU's panel on illicit financial flows, issued a statement on Friday referring to the leak as "most welcome" and calling for concerted action across Africa and the world to tackle illicit forms of tax evasion. Mbeki pointed out that the fourth most-used tax haven revealed within the Panama Papers was an African nation—the Seychelles—and said this meant that African countries "must not rest under the illusion that the issue of tax havens does not directly affect Africa."

Mbeki also cited a January 2015 report by his panel which highlighted that Africa is losing an estimated $50 billion per year in illicit financial flows through commercial tax evasion and other activities, some of which are criminal. Over the past half-century, the continent is estimated to have lost more than $1 trillion due to such activities, the report found.

Nkosazana Dlamini-Zuma, the AU's current chair, has said that the Panama Papers leak must prompt a dialogue about the return of lost African assets to the continent. Dlamini-Zuma added that the revelations point to the need to deal with corruption in the corporate sector, not just in African governments. A December 2015 report by anti-corruption watchdog Transparency International found that more than half of Africans felt that corruption had increased in their countries over the previous year.

A number of African politicians and businesspeople have been linked to offshore accounts—either directly or through close family and associates—by the Panama Papers. These include:

  • Former Sudanese President Ahmad Ali al-Mirghani, who died in 2008, was allegedly the owner of a company registered in the British Virgin Islands and through which he held assets worth $2.72 million at the time of his death.
  • John Agyekum Kufuor, the former president of Ghana, whose eldest son John Addo Kufuor allegedly controlled a $75,000 bank account in Panama through a company registered in the British Virgin Islands.
  • Nigerian businessman Aliko Dangote, Africa's richest man, who allegedly has links to at least four offshore shell companies, according to Nigeria's Premium Times. The Dangote Group, of which Dangote is the CEO, has denied any links to the offshore companies.
  • Rwanda's former intelligence chief, Emmanuel Ndahiro, who was allegedly the director of a British Virgin Islands-registered company named Debden Investments Ltd that was reportedly used to purchase a jet. The Rwandan Finance Ministry claims the company was established by the government in 1998 as "a special purpose vehicle to secure strategic services" and that it was not used for illegal transactions, private interests or tax avoidance.

Koji Annan, the son of former United Nations Secretary General Kofi Annan, who allegedly used an offshore company incorporated in the Pacific island of Niue to buy a $500,000 central London apartment. A lawyer for Annan said that his companies "operate in accordance with the laws and regulations of the relevant jurisdictions" and paid whatever taxes they were liable to.