Africa shouldn’t become oligarch haven
AS THE Russian invasion of Ukraine hits its fourth month and the consequent global food and oil crisis deepens, world leaders are all looking for ways to end the conflict sooner rather than later.
One of the early options on the table was the blacklisting of so-called Kremlin allies, Russian oligarchs, and many Western countries jumped on the bandwagon immediately.
For instance, the UK sanctioned the assets of oligarch Roman Abramovich, while the US, similarly, seized $5.3 million (about R84m) from Konstantin Malofeyev’s US-held bank account.
Despite the blacklisting, the war has not diminished, and Russian oligarchs appear to still roam the world.
A new option that has been put on the table by members of the European parliament is blacklisting territories that have become safe havens for Russian oligarchs. The United Arab Emirates, for instance, has found itself in the cross-hairs of pro-sanctions campaigners as a result of leaked Dubai property data that revealed numerous property owners who are currrently under international sanctions.
In the face of these campaigns, there are two questions that we need to ask ourselves: Is the move to sanction the oligarchs justified? And are African countries destined to become a new haven for the movement of Russian assets?
In fairness, we can easily argue that mainstream Western media tend to overestimate the oligarch’s influence on Putin. Unlike state capture, Putin has captured the oligarchs with coercion. He has complete control of the oligarchs and ensures they are barred from political interference, and if they revolt, they risk being imprisoned or potentially killed.
Sanctions have not historically been successful; the only people who suffer are ordinary citizens.
African countries have not been spared from the global food and fuel price increases caused by the conflict.
According to the World Economic Forum Annual Report, 14 African countries get more than half of their wheat imports from Russia and Ukraine and approximately half of the continent imports a third of their wheat.
Still reeling from the economic devastation caused by the Covid19 pandemic, African countries are invested in ensuring that the conflict ends quickly. Yet, thanks to the fragility of many African states, for instance, Sudan, Libya and Mali, it is possible that Russian elites may find Africa an excellent place to hide their assets.
South Africa and the rest of the continent should ensure that their countries are not used to launder money. One of the measures suggested by civil society organisations such as the Financial Transparency Coalition is establishing a public beneficial ownership registry to improve financial transparency on the continent.
For many reasons, Africa, including South Africa, should not become the next haven for the oligarchs. The most important one is that allowing them sanctuary will make an already murky intra-African financial disclosure system impenetrable, which has implications for transnational crimes such as terror financing and money laundering. In every crisis lies an opportunity; African countries should use this period to tighten their policies and regulation around illicit financial flows. But, just as importantly, African states should not allow themselves to be used as a pawn in this conflict.