World Bank working paper reveals astonishing amount of aid money to the African continent going directly into tax havens!

The World Bank working paper named ‘Elite Capture of Foreign Aid – Evidence from Offshore Bank Accounts’, which was finally released yesterday is a devastating read. Not because of the facts in it, but because of the extent of the misuse and theft of aid money. The World Bank are now proving by small samples how much of their loans, grants and funds, which is given by donors to the WB, which happens to be moved to tax havens by the regimes that needs it. That is eating of the plate of the poorest and living lavish on others people’s dime.

Just in the Annex, the truth really comes forward, where it is only a small samples, but showing the distasteful enterprise still. Like from table one. You can see that a certain amount of African countries have taken out huge funds into havens deposits and non-haven deposits.

The report explains this about the table one: “The table shows the 22 countries in our main sample and presents summary statistics for the main variables in our analysis. The sample includes all countries for which annual disbursements from the World Bank are equivalent to at least 2 percent of annual GDP on average. Sample mean is the average of the 22 countries in the sample. Annual WB aid (% of GDP) is annual disbursements from the World Bank as a fraction of annual GDP. Annual ODA aid (% of GDP) is annual Official Development Assistance (ODA) from all sources as a fraction of annual GDP. Haven deposits is foreign deposits held in the 17 countries classified as havens. Non-haven deposits is foreign deposits held in the countries not classified as havens” (World Bank Feb 2020).

Nation Haven (million USD) Non-Haven (million USD)
Burkina Faso 32 88
Burundi 103 19
Eritrea 8 11
Ethiopia 64 155
Ghana 76 446
Guinea-Bissau 8 16
Madagascar 193 232
Malawi 31 82
Mali 27 133
Mauritania 32 150
Mozambique 40 161
Niger 29 79
Rwanda 149 41
Sao Tome and Principe 4 8
Sierra Leone 32 82
Tanzania 145 437
Uganda 73 188
Zambia 117 306

When you add into the A6 Table of the modestly aid-dependent countries. You see yet more African countries, where the money a flowing out of the coffers. Where surely not all aid is going where its supposed too.

The report explains table A6 like this: “The table shows the 24 countries for which annual disbursements from the World Bank are between 1% and 2% of annual GDP on average. is the average of the 24 countries in the sample. Annual WB aid (% of GDP) is annual disbursements from the World Bank as a fraction of annual GDP. Sample mean is the average of the 22 countries in the sample. WB aid disbursements is annual disbursements from the World Bank as a fraction of annual GDP. Annual ODA aid (% of GDP) is annual Official Development Assistance (ODA) from all sources as a fraction of annual GDP. Haven deposits is foreign deposits held in the 17 countries classified as havens. Non-haven deposits is foreign deposits held in the countries not classified as havens” (World Bank Feb 2020).

Nation Haven (million USD) Non-Haven (million USD)
Benin 42 96
Cape Verde 14 20
Central African Republic 18 53
Chad 11 91
Comoros 7 27
Democratic Republic of Congo 910 93
Cote d’Ivoire 387 787
Gambia 24 82
Guinea 54 114
Kenya 1277 1784
Lesotho 11 28
Senegal 253 487
Togo 82 146

Without going into deep technicalities of these operations, neither how the World Bank came through these numbers. We can see there is a staggering amount of funds that disappear and goes missing. Which was supposed to go to development or directly to support the state functions. Which happens to end up in tax-havens, surely by someone closely associated with the state or heads of state. Since, these sorts of amounts couldn’t have left the nations without the approval of the executive or head of state.

We can also clearly see, that some aid is directly feeding the rich and keeping tax-havens alive. Giving them financial stimulus and also covering the expenses of the elites in the respective places. There is certainly a mismanagement and a need for more oversight from the World Bank. But also more mechanisms to stop the misuse of aid. If it is supposed to help and not just create a very vastly elite in the nation in question. Because, with this sort of operations, they have clearly achieved that. Peace.

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