Cape Argus

Africa shouldn’t become oligarch haven

- BLESSING MBALAKA Mbalaka is a junior researcher at the Institute for Pan-African Thought and Conversati­on, at the University of Johannesbu­rg

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.

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