Kenya: Financial Centres of Corruption: Why Kenya Can Do Better Than Turn to the UK for Advice

| March 8, 2013 | 0 Comments

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As President Kibaki prepares to step down from the centre stage of politics, his legacy continues to be focused on what is heralded as the economic boom of Kenya. With sights set towards the skyscraper horizon of New York and the financial bustle of London, Vision 2030 envisions Kenya as a middle-income country, attracting foreign investment and funding flows, and as a global financial centre in the heart of Africa.

In order to fulfil Kenya’s aspirations to become a centre of global finance, the government has turned to a United Kingdom (UK) consulting firm to advise and help model our financial centre on the City of London. The City of London is one of the largest financial centres of the world. It is a corporation in the heart of London that represents the interests of over five hundred banks and financial institutions, the London Stock Exchange and the world’s largest foreign exchange market.

The City has been granted various special privileges, such as to have its own mayor, its own police force and to enforce a peculiar form of democracy in which corporations assign votes. Various City of London activities and accounts are also not covered by the UK Freedom of Information Act, enabling the companies within its jurisdiction to operate under a shroud of secrecy.

As financial scandals rocked the United States and Europe during the economic crisis of 2008, it became apparent that bribery and corruption were the order of the day from Wall Street to the City of London. Yet, while some bankers and banks pushed the extremities of the system, very few actually broke the rules. This could only mean that the rules themselves were corrupt. And while the crisis forced political elites to put into place at least perfunctory reforms, a groundswell call to change the rules to favour people rather than profit swept the United States and Europe through the Occupy movement. Today, in the streets of London, far from the bustle of Nairobi in the throws of election campaigns, a growing mass of disgruntled citizens are mobilizing towards a national day-of-action to demand an end to the secrecy and exceptionalism in the City of London.

The City of London and big firms are also coming under intense criticism for evading taxes and providing havens for the world’s tax evaders.

While money stolen from African people is still stashed in Swiss bank accounts, the network of tax havens has deepened and enlarged enabling wealthy companies and corrupt elites to evade their obligations and reap more wealth from the pockets of the poor. Research has shown that US$ 21 trillion is stowed away in tax havens. This is more than ten times the total development aid received by ‘developing’ countries over the past twenty years. The City of London is the leading centre of global finance and is one of the biggest and most connected offshore tax havens in the world.

Kenya has struggled with the entanglement of corruption and politics.

Human rights, democracy and justice movements across the land have fought to keep political and economic elites in check. Yet, the reality is that greed surfaces whenever citizens rest. This was true with the recent send-off package that the outgoing parliament gave themselves despite the growing inequality of our society. This will be true if we allow our financial models to be based on the same systems that have stolen Africa’s wealth for centuries.

Kenya’s attempt to establish an African centre of global finance is not the first. Similar efforts have been unsuccessful in Ghana and Botswana.

Dominant narratives suggest that the possibility of an African international financial centre heralds the ‘arrival’ of Africa on the stage of the global economy and contends that the benefits will trickle down to all. Yet, these accounts cloud the dangers of a poorly regulated finance centre on Kenya’s economy as well as on the economy of the region.

It is time we amplify African voices in the call for an end to the secrecy in the City of London and within the global financial system. We must call on our new public officers as they come into office in March to not allow Kenya’s future to be tied to the same rules of corruption and tax evasion. Let us stay true to the letter and spirit of our constitution and ensure that Kenya be the leader of a transformed financial system where the wealthy are held to account.

To add your voice for tax justice visit: The rules

Hakima Abbas is a political scientist, policy analyst and activist.

Alvin Mosioma is the Director of Tax Justice Network- Africa.

Culled from :Here

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Category: Africa News