Kufuor


Barclays off-shore banking will bring more of this to Ghana

Barclays offshore banking will bring more slums like this to Ghana

In a move guaranteed to increase poverty and crime throughout Ghana and West Africa, Barclays Bank, at the 2005 invitation of former President Kufuor, is setting up off shore banking in Ghana. Other big banks are waiting to join in the tax haven business in Ghana following Barclays lead.

Barclays bank is playing a lead role in the establishment of a tax haven in Ghana, in a move that could see huge mineral wealth in west Africa vanish into it from poverty-stricken countries’ coffers, the Observer can reveal.

The controversial British lender has for the last four years worked closely with the Ghanian government to start an International Financial Services Centre offering low taxes and minimal financial disclosure.

Development charities fear that the establishment of a fully operating tax haven so close to oil- and mineral-rich countries such as Nigeria, Sierra Leone and Equatorial Guinea will encourage a rapid increase in tax and capital flight.

There is also concern that cocaine barons, increasingly using west Africa as a trafficking route into Europe, could launder drug money through Ghana.

Oil-producing nations are plagued by corruption and drug trafficking and the creation of this international financial services centre will make this worse – not better.”

This move was initiated in 2005 by former President Kufuor. In light of what we now know about the theiving and raids on the treasury by himself and his cronies, it looks like they were planning ahead to hide stolen assets from the people of Ghana. We know Kufuor initiated this move from an article on GhanaWeb in 2005, when the offshore banking plans got underway:

Barclays Bank to assist Ghana establish off-shore banking
2005 Accra, March 30, GNA
Barclays Bank Plc is to assist the Government to establish off-shore banking in Ghana, Mr David Roberts, Executive Director of the Board of Directors of Barclays Plc and Barclays Bank Plc, said on Wednesday.

“We have to make the necessary arrangements to make off-shore banking operational in Ghana,” he said in reaction to an appeal by President John Agyekum Kufuor that the Bank cooperated with the Government to establish offshore banking.

President Kufuor made the appeal when a delegation of the Bank’s Directors attending the first International Executive Committee Meeting outside Europe in Accra, paid a courtesy call on him at the Castle, Osu.

The discovery of oil in Ghana was not announced until June 2007. But by 2005 they knew it was in the works. The Cape Three Points Deep Petroleum Agreement was signed in 2002, and potential oil fields mapped, also in 2002. So it seems likely Kufuor and his NPP cronies were planning for the influx of oil cash, and a place to stash and hide the money conveniently close to home. Even without oil, their misappropriation of government assets is impressive. There are many examples documented on GhanaWeb, such as Massive looting at Ministries, especially since the change in government has brought a bit more transparency. Financial transparency is what every watchdog group says is needed in the African oil and resource business. Financial transparency is what off shore banking is designed to eliminate.

Barclays Bank has been repeatedly implicated in illegal and unethical banking operations. In March the Guardian published a number of internal memos from Barclays, from WikiLeaks:

The documents are copies of alleged internal memos from within Barclays Bank. They were sent by an anonymous whistleblower to Vince Cable, Liberal-Democrat shadow chancellor. The documents reveal a number of elaborate international tax avoidance schemes by the SCM (Structured Capital Markets) division of Barclays.

According to these documents, Barclays has been systematically assisting clients to avoid huge amounts of tax they should be liable for across multiple jurisdictions.

A commentator to the Financial Times stated:

I was lucky enough to read through the first of the Barclays documents…

I will say it was absolutely breathtaking, extraordinary. The depth of deceit, connivance and deliberate, artificial avoidance stunned me. The intricacy and artificiality of the scheme deeply was absolutely evident, as was the fact that the knew exactly what they were doing and why: to get money from one point in London to another without paying tax, via about 10 offshore companies. Simple, deliberate outcome, clearly stated, with the exact names of who was doing this, and no other purpose.

Until now I have been a supporter of the finance industry – I work with people there regularly and respect many of them, and greatly enjoy the Financial Times and other financial papers. However this has shone a light on something for me, and made me certain that these people belong in jail, and companies like Barclays deserve to be bankrupt. They have robbed everyone of us, every single person who pays tax or who will ever pay tax in this country (and other countries!)

If Barclays can get away with this in the UK, with UK laws and enforcement, how much more can they get away with in Ghana, where the current legal and enforcement communities have a much shorter history, and are grossly underpaid.

Barclays have also been implicated in corrupt associations and illegal dealings with Equatorial Guinea, and along with other banks in Angola. From the BBC:

The same lax regulation that created the credit crunch has let some of the world’s biggest banks facilitate the looting of natural resource wealth from poor countries.

I have quoted Nicholas Shaxson in previous posts, but what he says regarding the movement of money is right on the mark:

There are basically three forms of dirty money. One is criminal money: from drug dealing, say, or slave trading or terrorism. The next is corrupt money, like the fromer Nigerian dictator Sani Abacha’s looted oil billions. The third form, commercial money – what our finest companies and richest individuals hide from our tax collectors – is bigger. The point – and this is crucial – is that these three forms of dirty money use exactly the same mechanisms and subterfuges: tax havens, shell banks, shielded trusts, anonymous foundations, dummy corporations, mispricing schemes, and the like, all administered by a “pinstripe infrastructure” of mainstream banks, lawyers, and accountants.
. . .
In this parallel secret universe the world’s biggest and richest individuals and firms, News Corporation, Citigroup, and, yes, ExxonMobil – can quite legally cut themselves loose from pesky full taxation and grow explosively, leaving smaller competitors, who pay their full dues along with the rest of us, choking in their dust. This undermines the very notion of capitalism: the big companies’ advantage has nothing to do with the quality or price of what they produce. If you are worried about the power of big global corporations, don’t always attack them directly, but attack bank secrecy instead. This is the clever way to take on the big fish, using a net that would also snag the Sani Abachas, the Mobutus, the North Koreas, the terrorists, and the drug lords.
(Poisoned Wells: The Dirty Politics of African Oil, by Nicholas Shaxson, p.225&227, ISBN 978-1403971944)

In 2007 Kufuor and Barclays raved on about what a wonderful opportunity offshore banking would be for Ghana:

President Kufuor said … the Government was fully aware of the numerous challenges and difficulties inherent in the operation of the facility and gave the assurance that the necessary safeguards had been put in place to stave off abuses.

Legal and administrative measures, he said, had been enacted to provide the needed checks and balances within the economy in particular and society in general.

“These measures should promote best practices in service delivery. More importantly, they should affirm the good faith and determination of the entire society to make Ghana a safe, secure and peaceful environment for investment.”

President Kufuor, through whose initiative the offshore banking had become a reality, said It must help to transform the financial system for accelerated socio-economic development.

He said last year, 658 billion dollars was transferred from developing countries to the developed countries, noting that if about half of this had been lodged in such a facility in Africa, the pace of development of the Continent would have been tremendously enhanced.

If that money had gone into offshore facilities in or near the developing countries, it would have made no difference. The reason for offshore banking is to evade the checks, balances, and safety measures. In fact, offshore banking will allow and promote the legal and illegal theft of money from Ghana, and is designed to do just that. Corporate money, drug money, stolen money, money from arms deals, money from illegal bunkering and corrupt politicians, all disappear offshore. Barclays and other big banks take money out of the reach of the countries those assets came from, and out of the reach of the governments and the citizens they are supposed to serve. I doubt Kufuor’s lavish praise for offshore banking was due to naivité. He was planning to be one of those advantaged by the bank at the expense of his own country. It is not for nothing he is known as Thiefuor to many of his countrymen.

Aside from those few who become very rich indeed, oil, and other extractive resources can make a country much poorer. The phenomenon is described in this article in Foreign Policy:

Collier’s model shows that producers of oil, timber, and minerals would on average see their gross domestic products rise by 10 percent in the first seven years, only to have them crash two decades later to only 75 percent of where they started. Sudden cash flows in unprepared countries, he says, lead to unsustainable public consumption, rising inflation, soaring inequality, trade protectionism, and a real danger of civil war.

As Shaxson points out:

People often put the problem like this: oil money would be a blessing but politicians steal it, so people don’t see the benefits. But it’s much worse: the oil wealth not only doesn’t reach ordinary people, but it actively makes them poorer.

Barclays and other big banks help make and keep the majority of people poorer. They insure there is no level playing field. Offshore banking is the tool that possessors of criminal money, corrupt money, and commercial money use to hide that money from its source, and to prevent reinvestment in the people and the places the money came from. That is why it is so shameful for Ghana to be setting up offshore banking. It is shameful that a former president initiated and promoted this tool to steal from the Ghanaian people, and it is shameful for the current government if they allow this to proceed as planned. If offshore banking goes forward, slums such as in the picture above will expand exponentially, people will suffer and die because their assets are being stolen from them, and they have nothing to fall back on.

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From Stratfor comes this assessment:

Nigeria is moving to block AFRICOM, the U.S. combat command for Africa, from establishing itself in the Gulf of Guinea region. A few countries will go along with Nigeria, but oil and natural gas newcomers Equatorial Guinea and Sao Tome and Principe probably will resist the move.

And Uzodinma Iweala asks:

I just wonder if YarAdua and his foreign/defense policy people are savvy enough to actually thwart this. What would it take?

1.) Security agreements with all of the major players (probably even a security agreement with the US). When our navy can’t even deal with oil bunkerers or the Niger Delta we’re going to go and patrol X thousand square miles of Open Ocean.

2.) Economic inducements (which we can do with Sao Tome and some of the smaller countries but we can’t hope to compete with the coercive economic power of the US)

3.) Pan African solidarity (almost laughable)

4.) A MAJOR arms/security deal with China (bingo! lets further sell ourselves to the Chinese).

I pray to God the US keeps out of this… otherwise you’ll see our leaders make some really foolish decisions perhaps more so than they’ve done in the past.


Nigeria seems to have come to the same conclusion I did, that the US is using terrorism to blackmail Nigeria into hosting a military base. There may be other reasons for the US playing the terror card.

There are plenty of other problems for the countries bordering the Gulf of Guinea, including devastating amounts of illegal fishing by European and Asian countries, drug and arms and other contraband smuggling, and plenty more. I know I read somewhere, but don’t know if it is true or exaggerated for humor, that the Nigerian Navy has more admirals than ships.

Also, Kufuor is due to be in the US this week. It seems likely the US will ratchet up the pressure on him. He also owes a lot to Nigeria.


There have been a number of reports of the discovery of a significant oil field off the coast of Ghana. Everyone I know is jubilating about it. Let us pray that Ghana does not fall victim to the oil curse. Poverty has increased in those countries that have oil, and agriculture that lets a country feed itself, has died.

Rawlings made some particularly brilliant moves when he governed Ghana, setting up the government in a way that tied a contemporary, and generally democratic government to traditional local and regional ways of governing. Ghana has the tools to make government work. Ghana also has problems with corruption that have gotten worse under Kufuor, who owes his position to some very corrupt people. Kufuor will be gone about the same time as Bush. He has used the Presidency as a paid travel vacation around the world. He is rarely and briefly in Ghana. Let us hope Ghanaians chose the next President wisely. Oil encourages corruption, and there are many dangers.

If Ghana is able to invest a significant portion of oil earnings in education, Ghana could become a regional strength and beacon. Ghana needs to restore compulsory free elementary education, as was the case after independence and before the coups. Ghana needs universal and compulsory secondary education, and it needs advanced learning, colleges and universities. The need and demand is there, but the supply has been neglected. Universities create economic success. For those parts of the United States that have invested heavily in universities, it has paid of in economic booms and sustained economic success. Businesses want to set up shop where they can find a trained and talented pool of workers. Education brings business, education develops business, and business brings money.

Ghana also needs to think long term. What happens when the oil runs out. Ghana needs to develop economic and energy resources independent of oil. And Ghana needs to protect her environment. No country yet has done very well in planning for the end of oil. I recently watched a tv program, Equator, in which Simon Reeves travels around the equator. In his travels through Gabon he said that with oil supplies depleted, and local agriculture barely in existence, President Bongo had declared a number of large forest areas as protected reserves, and is encouraging tourism as a source of income to replace oil. The program showed people in a rural village dancing for tourists, as that was their only means of making a living. They had little agriculture, and were forbidden to hunt in the reserves where they used to hunt. It made for a very peculiar situation. To my eye, there was little joy in the dance, and I really wondered what the tourists felt, and what they were thinking. I would not enjoy seeing this sort of thing again.

Some of the oil strike stories from:
The Statesman
The Daily Graphic
The Accra Daily Mail
Joy Online
BBC News

Also from BBC News:

Mr Kufuor said the discovery would give a major boost to Ghana’s economy.

We’re going to really zoom, accelerate… and you’ll see that Ghana truly is the African tiger
Ghana’s President John Kufuor

“Oil is money, and we need money to do the schools, the roads, the hospitals. If you find oil, you manage it well, can you complain about that?” he told the BBC’s Focus on Africa programme.

I am praying fervently that he is right.

Moon of Alabama has a series of articles providing some history and some of the thinking behind the formation of Africom. Part I, part II and part III. A PDF version of the complete series is available here.

The U.S. African Command (AFRICOM) will replace the AOR (Area Of Responsibility) for each of three other geographic combatant commands (there are now a total of six) currently tasked with portions of the second-largest continent, with the small exception of U.S. Central Command (CENTCOM) retaining AOR for Egypt. Further details on operations have not been made public apart from the usual basic press briefings and the formation of a transition team, though it not a mystery to identify what role AFRICOM will play in both the U.S. and Africa’s future.
. . .
That context is centered on strategic energy supplies and, explicitly, that of oil. In the petroleum age, these energy stores – along with the territories concealing them — have taken on great significance in the foreign policies of the industrialized nations, fueled by an insatiable fever for black gold and the seemingly instant wealth and power it delivers to its possessor.
. . .
Oil is the lifeblood of contemporary, militarized western civilization.
. . .
Paradoxically, as the military reach grew, so too did the need for more oil. The Pentagon is currently “the single largest oil consumer in the world.”

The article is scholarly and well documented, complete with footnotes. I am just looking at Part I in this post, but will return to these articles. The Bush administration is very secretive. And there have been movements around the globe to block or limit the reach of US military bases. So what they are doing in Ghana is not clear. What I suspect is that the US embassy, like many around the globe is becoming more militarized. The US Secretary of State is weak, and seems unable to make deals. The Pentagon has the money and the clout under Bush. There have been publicized visits from important military figures to Ghana. In terms of what is happening, or may happen, with the US military in Ghana, I suspect that they are setting up lily pads.

In its efforts to secure other basing options, the United States has negotiated agreements granting it access to airfields and other facilities in several African nations. These facilities are often referred to as “lily pad” facilities, because American forces can hop in and out of them in times of crisis while avoiding the impression of establishing a permanent – and potentially provocative – presence. They include Entebbe Airport in Uganda, where the United States has built two “K-Span” steel buildings to house troops and equipment; an airfield near Bamako, the capital of Mali; an airfield at Dakar, Senegal; an airfield in Gabon; and airfields and port facilities in Morocco and Tunisia.

The article does not cite Ghana specifically in this regard. But I doubt either the Bush administration or the Kufuor government are eager or likely to provide details to their citizens as to what exactly they may be discussing. Africom is just beginning. It would be well to watch the direction it takes. Ghana, and other African governments will need to be extremely clever and nimble in their dealings with it. As I mentioned, the articles are well worth reading to understand a more complete picture.

Ghana’s President Kufuor reminds me of the United State’s President Bush. Both preceded their presidencies with a series of unsuccessful businesses. Both appear comfortable with looting the treasury for themselves and their cronies at the expense of the people in their countries. Both countries will likely survive these presidencies. But both will be damaged, and will the voters in both countries have the wisdom and the will to choose better leadership?

In many areas where Ghana was a leader 50 years ago, she has fallen behind. The most critical of these areas are education and health care. A healthy and educated population is the foundation of successful business and development. The best thing Ghana could do to improve her position in the world is bring back free universal public education. As an article on GhanaWeb points out:

Socially, Ghana’s government says the country has made strides in both health and education.

KSP Jantuah, disagrees.

“A child from a poor family had a better chance of going to a good school then than now”, he told AFP.

“We made (primary) school free and compulsory.

After the coups people had to start paying again”, he said, insisting that the same applies to health care.

If Ghanaian businesses wish to grow and expand, the best thing they can do is work to restore and expand access to education and health care.


Ghana celebrates her 50th anniversary amid both joy and controversy. At least 24 heads of state will be attending. There has been much criticism of the amount of money that is being spent on the celebration, when public sector workers have not been paid and education and health care badly need investment. Deforestation has caused environmental problems, including causing more drought. There is a list of ways the present government has sold out Ghana to foreign interests for the sake of a big party.

The former President Rawlings sent his congratulations to the Ghanaian people, but declined to attend. He explains his reasons in a press release here.

The present President Kufuor, is a member of the party who worked against independence, saying Ghana wasn’t ready, and was the person who refused to let Nkrumah return to Ghana when Nkrumah was dying of cancer.

Nevertheless, Ghana’s independence is a wonderful thing, and worthy of celebration by everyone who cares for Ghana and for Africa. Ghana has led the way in self government. And if she can invest in herself, and preserve her democracy, she can continue to lead the way. Martin Luther King was in Ghana on March 6, 1957, and preached a sermon one month later on what he saw and felt, that still resonates.

All of us who love Ghana, her people and her promise, should put our hands together, raise our glasses, and send all our best wishes and our love to Ghana on her 50th anniversary.

Former U.S. President Jimmy Carter, Deputy Executive Director of UNICEF Kul C. Gautam, and Director-General of WHO Dr. LEE Jong-wook, examine a Guinea worm patient. photo by A Poyo

And Ghana is not doing very well with its eradication efforts. In fact it is the only country that the Carter center has been working with whose efforts to eradicate guinea worm disease, also called Dracunculiasis, or GWD, have gone backwards.

As President Carter says:

Greetings from Ghana. We departed en route to Accra Tuesday afternoon with a mixture of anticipation and trepidation. Ghana was the first country in which Rosalynn and I ever visited endemic villages, and we’ll never forget seeing two-thirds of the total population incapacitated with the disease, many of them lying around under shade trees unable to walk. I described the scenes in my first message in this series.
. . .
There has been stagnation in Ghana’s efforts since then, and in the last three years the number of cases reported has risen from 4,739 to 8,283.
All nations except Ghana have made significant and steady progress in recent years, resulting in a total reduction . . . (of) -more than 99 percent.
. . .
The most disturbing event occurred last year when a serious outbreak of Guinea worm in the central section, around Lake Volta, was deliberately concealed. Solemn promises by the government to dig wells have not been honored. The Carter Center has marshaled a series of exceptional efforts to overcome these problems, but all have been fruitless. There is no doubt that our visit is timely, but we have received word that top officials are very concerned about our potential criticisms. Some intense observation, incisive analysis, and political diplomacy will be necessary.


So what is the reason Ghana has fallen backward. I think there has been a general neglect of health care and health care workers by the present government, based on what I hear from talking to people in Ghana. Kufuor had not responded to letters that Carter wrote before his trip, but did have a friendly meeting with Carter while he was in Ghana. In addition, as Carter writes, Ghanaian officials have been emphasizing borehole wells as a way of eradicating guinea worm. This will not necessarily eradicate the worm, and much simpler, cheaper, and more accessible technologies are at hand. Filtering drinking water through a cloth is a principle technique of effective eradication. In fact, the Carter delegation watched a
demonstration of filtering water and the application of Abate (a larvicide that kills the intermediate host, a water flea, that carries eggs.)

It became increasingly obvious to me that a basic problem was that Ghana’s officials, from field workers to the president, considered the drilling of deep borehole wells as the primary solution to the Guinea worm problem. The common theme was “a deep well will eradicate our Guinea worms.” Although highly desirable and much needed in every village, this is not the way to eradicate the disease. Extremely expensive and time-consuming, with no assurance of finding potable water in many areas, the borehole dream had become a substitute for simple filtering of each drink and keeping people with emerging worms out of the ponds.

Most communities throughout the world have eradicated Guinea worm without drilling a well, and many people are still infected even when blessed with a good underground source of water. Just stopping by the local pond for one drink is all it takes. I explained this to them in very strong terms, had the ministers adopt the same sermon for our joint press conference, and we continued this explanation during our very pleasant visit with President Kufuor when we returned to Accra.

When all our meetings had been completed, we felt that a new day may have come to Ghana in its eradication effort.

I certainly hope this is the case. There is no excuse for the problem of guinea worm worsening in Ghana. Ghana has the means and should be able to take the lead in eradication efforts. You can read President Carter’s remarks on Ghana, and on the other countries he visited this February here, and view the slide show of his visit to Ghana.

Information on guinea worm from the US CDC can be found here, you can view an illustration of the life cycle of the worm, and recent reports.

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