Offshore Haven Becoming Thorn In Africa’s Path..?

By Tesfu Telahoun Abebe – Greetings to all! Can you guess the name of the following African country? I’ll give you plenty of hints..not that your chances of getting the correct answer will improve by much!

It has about 1.3 million people with each person earning annually an average of more than USD 25,000 from a nominal GDP of over USD 32 billion. This first-world level of prosperity enables this nation to be a welfare state providing free universal healthcare, free education up to university and generously subsidized transportation.

Add in dirt cheap but highly efficient communications, utilities and other public and social sweeteners and what you get is a veritable Shangri-La. Its 2040 sq km make it the world’s 170th in terms of size-or more illustratively, Ethiopia is almost exactly 550 times larger. This urbanized state is also one of the most densely populated nations in the world.

It is blessed with a year round temperate climate nurturing lush forests brimming with rare, exotic and frequently unique flora and fauna. Its population is relatively content and somewhat egalitarian. Most of the employable have jobs or occupations in the thriving and rapidly modernizing economy. They indulge in equestrian and other sports and enjoy flourishing arts and literary events-that is, when not simply basking at virtually pristine beaches.

So, who pray tell, is this earthly Eden, you ask?
The answer is Mauritius.

This tropical paradise is regularly lauded for being the most unAfrican of the 55 states on the continent-except for somewhat turbulent electoral politics some years ago.
Why? Well, for starters and as I have shown above, it has consistently stood among the top 5 performers in various economic and social indicators.

Mauritius is the best place (in Africa) to invest, the least bureaucratic and one of the best governed states in the world.

So does this mean that, at long last, an African success story has been discovered? The answer is two-fold: a firm YES! and also an emphatic NO!
Let’s deal with the affirmative first. Yes, Mauritius is a success story in that it (government and people) has delivered on many of the prerequisites which define a properly functioning political-economy-balanced and even positive trade balances year after year, good quality education and consistent job creation, social harmony and ever improving opportunities for an educated workforce, etc. Few African states can boast such remarkable success-Botswana, Gabon and a couple of the Maghreb nations come to mind.

Now let’s move on to the negatory side of the issue. I would not go so far as to describe the island state as an African success story because I do have some serious reservations about certain aspects of its economic ‘success’ since it has been increasingly coming about at the expense of an unsuspecting Africa.
This is due to Mauritius’ status as the premier center for offshore banking, opaque company formation and registration and all manner of less than transparent financial activities.

For instance, some 22 Ethiopian companies have been wholly or partly sold to various international companies from India, the USA, Morocco, China and other countries. We the people are not told how much the deals are worth and actually have little to no control on Mauritius bound African wealth.

I have focused my research on Mauritius because its the most prominent offshore haven in Africa but there are other smallish states which actively participate in various forms of barely legal financial and banking collusion with multinational firms which ‘invest’ in Africa but do not register their presence neither in their home countries nor in the mainstream financial and commercial spheres.

Foreign investors are registered in Mauritius under special subsidiaries newly formed solely for the respective acquisition. I will not name names at this point in time. However, I do promise readers that I shall publish the results of my research into offshore registration and banking as soon as it is complete.

Mauritius would do well to wean itself off such an unsustainable and frankly, anti-African economic model. Its industrious people do not deserve to be labeled as thorns in Africa’s path to development.