Power to plunder: How African oligarchs steal from the State


By NLM Writer

The sick daughter of Africa

With the world’s largest reserves of cobalt and significant portions of the world’s diamonds, gold and copper haul, the Democratic Republic of Congo is potentially the richest country in the world. Yet she remains among the poorest and most underdeveloped.

Rwanda’s Paul Kagame

The story of the DRC is a depressing one. In the convoluted history of independent Africa, the giant central African state has long been an attraction for swindlers and mercenaries, and a centre of bloodstained intrigue. Historians, no less than Martin Meredith, describe her as, but for the short period between June and September 1960 when Patrice Lumumba was Prime Minister, “hopeless”. Regime after regime, before independence and after, every covert act, often undertaken with the help of greedy foreign entities, has been with the aim of benefiting individuals with a share of the country’s wealth.

Before his assassination in January 1961, the CIA had branded Lumumba as a “Castro”, a communist sympathiser who had to be stopped at all costs. Dwight Eisenhower called him irrational and psychotic, even sponsoring campaigns about how his unstable mental state posed a danger to the people of Congo and the world as a whole. His rivals took this story and ran away with it. And when, with the active connivance of a cabal of powerful United Nations officials and encouragement from the Central Intelligence Agency, a young Colonel Joseph Desire Mobutu declared that he was suspending politics for the rest of the year and assuming office, Eisenhower and friends propped him up like he were the Messiah that the DRC needed, even sponsoring mercenary crowds to celebrate “the fall of politics”.

Gnassigbe Eyadema of Togo

In truth, all the rich men of the West wanted was a business partner – a man who would allow them free reign over the DRC’s wealth while buying their weapons to deal with dissidents or for public relations, “find a lasting peace”. And they had found him in Mobutu. By the time he was vacating office, actually fleeing Kinshasa under a hail of enemy gunfire, Mobutu had looted billions of dollars earning himself the unenviable tag, “The Great Plunderer”, the last great despot of the Cold War era.

Not that his successor, Laurent Kabila, fared any better, nor Kabila’s son, Joseph Kabila, after him. One of the principle causes of the senior Kabila’s assassination, it is alleged, was the Angola government’s displeasure with him for selling Congo’s diamonds to UNITA – then a rebel movement in Angola. Some say that he was even worse than Mobutu.

To his credit, Joseph Kabila has ruled in a less corrupt fashion than his two predecessors. But he and his family have built vast business empires on the back of his political power. An explosive investigation by the African Investigative Publishing Collective in partnership with Africa Uncensored and ZAM reveals that Jaynet Kabila, Joseph Kabila’s sister as the owner of multiple shell companies abroad set up specifically for smuggling, and the holder of multiple offshore accounts into which proxies pay the proceeds of the disposal of the DRC’s natural wealth. According to a report by the Congo research group, Jaynet also holds more mining licenses than a DRC citizen is allowed to have. In fact, the only difference between Joseph Kabila and Macias Nguema of Equatorial Guinea, who personally received, kept and budgeted foreign exchange is that, in Kabila’s case, there are people to do it on his behalf.

Following are highlights and excerpts from the report.

It is not just mining and metals sales. A Bloomberg investigation recently listed dozens of interests held by companies in the Kabila Empire, from telecommunications to money exchange to hotels and from airlines, freight transport to computers. Another investigative piece by Reuters in April 2017 revealed that even the proceeds of the new fancy biometric Congolese passports ended up in the hands of family associates. The passports cost of Sh18500 (a year’s salary for majority of Congo’s citizens) is for a large part paid outside the DRC to a bank account held in Belgium by a company that in turn pays yet another company in the United Arab Emirates, believed to be owned by close relatives of the Kabila’s.

On his appointment, Kabila’s Special Advisor on Corruption, the Honourable Ex Minister of Justice, Luzolo Bambi said that the country losses $15b (Ksh1.549 trillion) annually in illicit outflows. The official state budget left is around $5b (Sh516.5 billion), which simply isn’t enough for necessities such as schools, hospitals and roads. According to then Prime Minister Adolphe Muzito, the DRC in fact has no budget, “there can never be one when a few men are richer than the state itself,” said Provincial Minister Paulin Odiane speaking in a Kinshasa workshop in 2015.  Curiously, Muzito himself was the majority owner of the country’s only national airline CAA and a number of state-built real estate during his tenure as prime minister.

But even more curious is the fact that for a country that embraces cyber technology when it can make money for middlemen, it is shunned in sectors where information checking is vital; you guessed it, such as in exports. Congolese custom officials still record exports in handwritten forms that stay in books and files on officers’ desks and shelves never to be counter checked by anybody. The mining authorities and tax agencies then adopt these reports like they were gospel truths. A recent report by Global Witness Regime Cash Machine explains in detail how moneys that do enter the system, from formal mining revenue, tax payments on such sales and tax payments in general are siphoned off by fragmented tax agencies and the principal mining company Gecamines. This lack of connection is cited by global witness as one of the reasons why an estimated 40% of revenue from mining and other tax payments, even when declared, still does not reach the state budget, but stays in opaque bank accounts to be accessed by the powerful. In any case, only a small fragment of the remaining 60% in revenue reaches the state.  Normal practice is foe Companies to be extorted for money, which they pay but then book off as ‘tax paid in advance.’ They don’t pay tax again

An account by a former senior engineer of Canadian First Quantum mines illustrates how decent companies can be forced to abandon the DRC because of such practices: “In 2009, when we tried to pay the Direction Generale des Impots (DGI) our due US$ sixty million in tax (Ksh6.1 billion), one of the directors told us to pay him four million, pay six million to the government and keep the rest, because ‘no one here pays tax.’ We refused.” Months later, First Quantum had its copper mine seized and re-sold to President Kabila’s friend, mining tycoon ‘Mr Grab’ Dan Gertler.

Gnassingbé’s Togo

The DRC is not an isolated case. To the West in Togo, the export-mining sector has been colonized by the Moroccan-Israeli father-and-son couple of Raphael and Liron Edery, who administer Togo’s main mineral resource, phosphate, from the offices of President Faure Gnassingbé. From there, the President and his friends sell the country’s phosphates to whomever they want and at which price they want. Details are so scanty that, apart from the resource mining body the Société Nouvelle des Phosphates du Togo (SNPT), no one really knows how much phosphate the country actually produces annually. All that the citizens of Togo know is that the phosphate, nationalised in 1974 as a grand gesture of ‘economic liberation’ by President Gnassingbé (senior, the father of the current president) at the time, has been managed not by ‘the people,’ but by the Gnassingbés.

While Phosphate manager Raphael Edery controls the resource from the president’s office, Liron Edery helps from the office of the SNPT in Paris. Nobody knows why the SNPT has an office in Paris since according to export data; Togo doesn’t sell phosphates to that country. It is known, however, who the main buyers of Togo’s phosphates are: a family of shady Indian shippers called Gupta and their company Kalyan. According to company sales sheets over 2016 and 2017, the father-and son venture of Ashok and son Amit Gupta buys close to ninety per cent of Togo’s phosphates. The company web entry by the SNPT calls them their “privileged clients”

Kalyan buys Togo’s phosphates at higher prices than Ashok Gupta’s other company, Getax, did in Nauru. According to the SNPT sales sheets we obtained, Kalyan paid Togo’s state company an average of US$ 107 per tonne (Ksh11, 053) in 2015. This is however, still below market price, which in that year varied between US$ 115 (Ksh11879.50) and US$ 120 per tonne (Ksh12, 396). Remarkably, Australian importers, including Getax, got the phosphates still more cheaply. According to UN international trade statistics they bought the resource from Togo at a bargain price of US$ 100 per tonne (Ksh10, 330) in the same year. In comparison, Australian buyers of Moroccan phosphates paid US$ 166 per tonne (Ksh17, 147).

Sadly for Ashok Gupta, his bid -through Getax, together with Getax partner and Indian client Coromandel- last year to exploit the vast phosphates resources not yet mined by the SNPT failed. But the Ashok Gupta family did get a consolation price. A new hotel, the 2 Février Radisson Blu, rising mightily over the capital Lomé, has been funded with, in majority, a West African Development Bank loan and Togo state funds. Ashok Gupta’s family now runs the hotel of choice for West Africa’s multimillion-dollar traders, dealers and politicians. The 2 Février is also the President’s newest prestige venue: he addresses conferences and international partners here. Meanwhile, thousands of mine workers are dying annually from preventable conditions due to what the SNPT calls “lack of resources”.


South in Mozambique, company papers related to the ruby concessions in the mining area of Montepuez , show, amid two UK-based and one Australian gemstone multinational, a list of well-networked, ruling party-connected generals, security supremos, the mayor of Maputo, politicians, former and present high ranking ruling party members. The biggest concession, of Montepuez Ruby Mining aka MRM Gemfields, is partly owned by Mozambican General Raimundo Domingos Pachinuapa, a powerful member of Mozambique’s ruling party, former liberation movement Frelimo. General Pachinuapa’s company Mwiriti holds twenty-five per cent of MRM, of which the other seventy-five per cent is owned by UK multinational Gemfields. Pachinuapa also holds a quarter each of Gemfields’ other concessions, Megaruma and Eastern Ruby, as well as twenty other licenses of his own for ruby mining in Montepuez. His son Raime is MRM’s manager for corporate affairs.

Although ‘Formal’ mining is officially supposed to benefit the Montepuez region (according to provincial financial department administrator Fernando Djange MRM Gemfields has an agreement with the Mozambican state to pay it ten per cent of the sales value of each ruby auction in royalties), this money is either never paid or, according to Gemfields, it is paid but never gets to the people- which is fault of the state. Even then Whether Gemfields is responsible for the fact that millions of dollars in benefits from its mining are not reaching the villagers, or the Mozambican state, is difficult to answer. Its operational partners are the Mozambican state, after all. General Pachinuapa, his son Raime, and board member Samora Machel (son of former President Samora Machel) and others are influential precisely because of their political connections.

St. Kagame

Closer home in Rwanda, The Paul Kagame regime isn’t exactly saintly either. It turns out that farmers were severely victimized in the execution of the much-lauded one house one cow project. Seventy-two out of five hundred cows promised to help them become successful milk and meat producers in the still very poor country, have died. Others are sickly and not delivering as much milk as was expected. Seventy-six of the pregnant cows, for which good money was paid because of their status, have given birth to dead calves. But a check on the Netherlands’ side shows, -contrary to what Rwanda’s government mouth piece, the New Times, has alleged-, that the Dutch are not to blame. The Rwandans never paid the full price for the cows after they demanded an upgrade in the quality. In fact, the sickly lot they received was the best grade for the money they had paid.

Subsequent research in Rwanda had shown both a mess and a cover up amid allegations that part of the money, made available to farmers through loans from the Rwandan Development Bank (RDB), had been pocketed by high-level officials. Those allegations could not be proven, but that there had been duplicity on the side of the Rwandan bosses of the project was clear. An expert farmer’s representative was denied access to the buyers’ delegations’ plane leaving Rwanda’s Kigali airport at the last minute. After the business trip, when the cattle had been bought and arrived in Kigali, the agent of the RDB whose job it was to do so had -or so the Bank said- not been at the airport to receive the animals. In the cases of close to four hundred of the cows, medical certificates -on board on the planes with the animals- had gone missing.

In what should not come as a surprise by now, president Kagame and some high ranking officials were the largest beneficiaries of the project, never mind the fact that they are anything but poor farmers. Meanwhile, Théogène Turatsinze, who had been the CEO of the RDB at the time of the scam was forced to resign in either 2007 or 2008 (reports on the affair vary on the date), allegedly because he had refused to declare bankruptcy of the bank after large amounts of money had been used to fund loans to ruling party members. According to online postings by critics of the regime, the ruling party had insisted that bankruptcy should be declared and the debts of the individual politico-businessmen cancelled, but, still according to these reports, Turatsinze had not been amenable to this. He had moved to Mozambique in the same year before being assassinated shortly afterwards- curiously, a few days before officials of the IMF and the World Bank were set to interview him about the affair

From the Guptas’ dalliance with the Jacob Zuma regime in South Africa, state-sponsored killings in devout Christian Nkurunziza’s Pierre Burundi, the personalisation of national parks and air travel by the bachelor Khama Ian Khama in Botswana to the expansion of family business empires passed off as national development by the Kenyatta regime in Kenya, the story of how African oligarchs benefit themselves and their friends at the expense of country is a complex yet painful one to anyone willing to learn. Ultimately, the words of perhaps America’s greatest war hero Smedley Darlington Butler in his critical work, War is a Racket hold true – that every crisis is manufactured, with a profit motive to those who supply the solution. ^



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