Aid-dependent nations 'stole' funds

Kenya's ruling elite siphoned US$3.06bn of World Bank aid payments to offshore accounts between 1990 and 2010, a new study shows. The news comes as the EU prepares to sanction Mauritius, a popular tax haven, over money laundering and terror financing claims. Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts, offers details of how individuals connived to enrich themselves by wiring foreign aid money meant to help the vulnerable to foreign offshore accounts. The Nation reports that the study was conducted by Bob Rijkers of the World Bank, Jorgen Juel Andersen of BI Norwegian Business School, and Niels Johannesen of the University of Copenhagen. It compared data on aid disbursements from the World Bank with foreign deposits from the Bank for International Settlements, focusing on 22 aid-dependent countries including Kenya, Uganda and Tanzania. Globally, Jordan topped the list with more US$3.2bn siphoned, followed by Kenya. The Ivory Coast was third at US$1.1bn, while the DRC took fourth spot with US$1.02bn stolen. The money was carted away to tax havens like Switzerland, Luxembourg, the Cayman Islands and Singapore whose legal frameworks emphasis secrecy and asset protection.

Study

Full report in The Nation