RECENTLY, when the corruption scandal involving Credit Suisse’s phantom loan to Mozambique emerged, the UK’s Financial Conduct Authority, in reaction to the outrageous criminal act by Swiss bankers, said in a statement that the action had caused “a debt crisis and economic harm for the people of Mozambique”. This is what Africans have been saying for the last 30 years or more, long before the gravity of corruption perpetuated by Western bankers and their African collaborators started being exposed recently by various watchdog groups monitoring global financial crime.
In October, the Pandora Papers released 12 million documents exposing corruption globally. The unethical activities that fuelled the illicit movement of money were on a monumental scale.
Granted that some people might have felt that the huge sums of money that they had somehow contrived to make legitimately should not fall into the hands of governments through high taxation. That is their problem.
But when it comes to lumbering African countries with loans that were not used for the purpose that they were disbursed, and instead lined the pockets of European and African crooks, this is not on at all. Put plainly, these actions are a violation of the human rights of Africans who will have to bear the brunt of paying off phantom loans.
Article 3 of the Universal Declaration of Human Rights says: “Everyone has the right to life, liberty and security of person.” But if phantom loans such as the $2 billion arranged by Credit Suisse and the attendant kickbacks that were dished out are anything to go by, then the bankers and their cronies in Mozambique have not given Mozambicans a chance to benefit from Article 3.
Article 22 goes even further: “Everyone as a member of society has the right to social security and entitled to realisation, through national effort and international cooperation and in accordance with the organisation and resources of each state, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.”
With the unethical manner in which the $2 billion phantom loan was organised, Mozambicans, again, have been deprived of their human rights, as enshrined in Article 22. The bent bankers have not only robbed the people of Mozambique of these rights, but also other Africans whose corrupt governments have entered into such dubious loan agreements in the past.
These phantom loans have always been around in Africa. Ngozi Okonjo-Iweala, the current Director General of the World Trade Organisation, in her contribution to a 2003 book, The
Debt Trap in Nigeria, pointed out that when Olusegun Obasanjo became president of Nigeria in 1999, he ordered an audit of external loans that were contracted in the 1980s and 1990s, the height of illicit capital flight from Africa.
She said the Ministry of Finance discovered that 40 per cent of these projects “were never started, even though the loans were fully drawn, and of the remaining hardly any of them was economically viable to generate returns to service the debts”.
So, the Nigerians who were supposed to benefit from loans taken in their name did not. It meant that, in the case of such dodgy loan deals, African children were dying before the age of five because vaccines that were meant to stop preventable diseases were not available. African mothers were dying in childbirth because medical facilities were not up to scratch due to the suspicious loans. The atrocities caused by these faulty disbursements are continuing today.
It is all well and good for Swiss-based Civitas Maxima to be chasing Liberians on charges of international crimes during the Liberian civil wars. On its website, Civitas Maxima proclaims: “International crimes not only violate individual victims’ rights but also touch the humanity in all of us”. This is commendable. But the human rights body should look closer to home, where rogue bankers are regularly violating the human rights of Africans by encouraging bribery and corruption and granting ghost loans.
The US and UK governments have fined Credit Suisse a total of $475 million because of the bribery and fraud by its bankers. Shamefacedly, the bank said it would write off $200 million of Mozambique’s debt. Mozambicans instead want Credit Suisse to write off the suspect $2 billion loan. Indeed, Credit Suisse should.
In fact, just as Obasanjo ordered a review of loans granted to Nigeria, every African government should do the same now and take class action against Western banks that have violated the human rights of Africans through bribery and corruption.
Ann Pettifor, Coordinator of Jubilee 2000 Plus, noted in her contribution to The Debt Trap in Nigeria: “Humanitarian intervention to defend the human rights of a billion people in indebted nations will result in a transformation of the global economy. Intervention will challenge the dominance of finance capital. And creditors will invariably be disciplined.”
Eighteen years after this was written African countries are still fighting against the violation of their human rights through bribery, corruption, illicit financial flows and phantom loans strategically organised by Western bankers and their African co-conspirators.
Enough is enough.
This article first appeared in the November-December 2021 edition of the Africa Briefing Magazine