Africans Urged to Tackle Money-Laundering

By Stephen Mbogo | July 7, 2008 | 8:15 PM EDT


Nairobi, Kenya (CNSNews.com) - Security experts in Africa want governments to speed up the passage of laws against money laundering, saying the practice is draining resources, distorting financial systems and funding crime and terrorism.

Only half of the 15 countries in eastern and southern Africa have adopted anti-money laundering legislation, said Charles Goredema, a senior research fellow at the South Africa-based security research group, the Institute for Security Studies.

"In each of the 15 countries, we have been able to establish a link between money laundering and specific organized criminal activity," he said.

Goredema said the effect that money laundering is having on national economies is much larger than the actual amounts involved, especially in cases where money is being transferred out of Africa.

Another Institute for Security Studies scholar, Nomzi Gwintsa, said an uneven legal situation in Africa was making it difficult for law enforcement agencies to fight money-laundering. The main focus, she said, is to establish exactly where laundered money was coming from and where it was heading.

Prof. Angela Itzikowitz of South African legal consulting firm Edward & Friendland said capital flight from South Africa in the form of hard currency and undeclared precious minerals contributed significantly to an annual US$80-200 billion money-laundering industry there.

Experts said it is difficult to quantify the size of the problem in Africa because most countries did not have figures available or were unwilling to give them out.

An underlying problem inhibiting effective legislation is the fact that politicians who make the laws are often themselves involved in money-laundering activities.

Money laundering has been linked to a growing trend by prominent African politicians to buy expensive properties in South African cities such as Cape Town.

Among those under investigation or facing charges are senior figures from Zimbabwe, Kenya, the Democratic Republic of Congo and the tiny oil-rich Central African nation of Equatorial Guinea.

Kenyan Finance Minister David Mwiraria said his government was quickly moving towards enacting anti-money laundering legislation to deny criminal networks sources of funding.

"The fight against terrorism is multi-faceted and combating the financing of the vice is crucial and hence the need to suppress money laundering," he said.

The global Financial Action Task Force on money laundering, a body established by the G-7 industrialized nations in 1989 to develop a coordinated international response, has urged African countries to adopt 40 recommendations to tackle the vice.

Among other things, they commit countries to ratify and implement the relevant U.N. treaties to criminalize the financing of terrorism, terrorist acts and terrorist organizations.

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