The Overlooked Role of Western Multinationals in African Corruption

British American Tobacco, one of the United Kingdom’s largest companies, has been accused of paying bribes to the notoriously corrupt former president of Zimbabwe, Robert Mugabe. The allegations come amid a number of other reports of Western multinational corporations allegedly engaging in questionable conduct on the African continent. 

A joint investigation released earlier this week by the Bureau of Investigative Journalism, BBC Panorama and the University of Bath found that BAT, the world’s largest tobacco company by net sales, was involved in a conspiracy to pay between $300,000 and $500,000 to the late Zimbabwean leader shortly before his 2013 reelection. The payments were facilitated to secure the release of private security contractors who had been jailed in Zimbabwe while conducting operations in the country to hamper BAT’s corporate rivals there. 

This revelation, coming on the heels of several long-running cases of corruption involving foreign multinational companies and African governments—including the Israeli mining firm BSGR Group in Guinea; the French transportation company Bollore Group in Ghana and other West African countries; Dan Gertler International in the Democratic Republic of Congo; and the Anglo-Swiss commodities giant Glencore in Nigeria and other oil-producing African countries—sheds light on the nature of corruption in Africa and the complex web of global actors that drives it.

Panorama obtained thousands of leaked documents showing how BAT funded a network of almost 200 secret informants across southern Africa. The files also reveal BAT was paying bribes in South Africa and employing illegal surveillance methods to damage rival companies. Most of this work was outsourced to a South African private security firm named Forensic Security Services, or FSS. Researchers elsewhere have also documented hundreds of examples of BAT making dubious payments between 2008 and 2013 in 10 countries, including Congo and Sudan, to influence policy in its favor and sabotage its competitors.

In some Western discourse about corruption in Africa, it is commonplace to posit Africans as the main instigators of corrupt practices, while foreigners and their corporations operating on the continent tend to be targets of and crusaders against it. Donor countries and international organizations continue to spend billions of dollars on combatting corruption in Africa, with mixed results. Western governments and organizations like the European Union have passed legislation and frequently impose executive directives on individuals found to engage in corrupt practices, yet those policies have not much affected the frequency or intensity of graft on the continent. 

One possible reason could be that many of these laws and directives typically focus not on the predominantly international actors who pay bribes, but on the officials who receive them. A 2016 United Nations report on cross-border corruption in Africa examined 1,080 cases of such graft between 1995 and 2014, finding that all but five of those cases involved non-African firms. This indicates that multinational corporations are not merely hapless victims of African corruption but, in fact, active participants motivated by profit to exploit weak institutions in Africa and cross-border tax loopholes. 

This is not to say that Africans themselves are innocent. The revelations this week from Zimbabwe confirm longstanding perceptions of corruption and state capture by the ruling party. 

“The biggest challenge in Zimbabwe is that there is conflation of the ruling party ZANU-PF, and government. Those in the party think they are the government regardless of what positions they do or do not hold in the party, and those in government act as if they are the party,” Denver Ncube, a U.S.-based Zimbabwean neuroscientist, told me. This ensures that the flow of money and resources moves “seamlessly between the government and the party.” Ncube added that bribery by multinational corporations operating in Zimbabwe is difficult to pin down due to the opaque nature of their operations, as well as the tendency for the country’s security services to be involved.

While it’s difficult to paint all multinationals in Zimbabwe with the same brush, individual power brokers in government or in the ruling party can solicit “donations” from willing collaborators, the kind allegedly made by BAT across the African continent. Ncube pointed to several examples of sweetheart deals between the Zimbabwean government and multinational firms, including a backdated tax exemption given to the Chinese telecom giant Huawei and a 2017 deal allegedly facilitated by then-Vice President Emmerson Mnangagwa—who has now been elevated to the presidency—between the Zimbabwean government and a South African mining company. 

Multinational corporations are active participants in corruption, motivated by profit to exploit weak institutions in Africa and cross-border tax loopholes.

For many Zimbabweans, allegations of BAT engaging in bribery and corruption are fascinating, but hardly surprising, given how endemic graft is in the country. “The only surprise here is that BAT, which operates profitably in Zimbabwe, went further to actively protect its turf like a mafia,” Tichaona Zindoga, a Harare-based journalist, told me. He said that the tobacco industry and its lucrative value chains have now effectively turned into an oligarchy involving British, American, Chinese and white-controlled South African firms, all of whom possess significant political clout.

Zindoga also noted that the former Mugabe regime had been under Western sanctions since the early 2000s, and that these kinds of shady dealings may have been useful in getting around the sanctions. 

The costs of corruption in Africa are considerable. Between 2010 and 2012, Congo reportedly lost over $1.36 billion from the underpricing of mining assets that were sold to offshore companies linked to Dan Gertler.According to Zindoga, these kinds of schemes are enabled by a lack of transparency, which makes journalists and civil society groups key to unearthing malpractice and holding both government and private companies to account.

Denver Ncube also said that in Zimbabwe, more transparency regarding transactions between foreign companies and government agencies might help, especially when they affect the country’s finances. “Zimbabwe’s constitution has provisions on how some aspects of such engagements can be subjected to parliamentary review. However, the recent trend has shown that the current ruling party wants to consolidate power in the Presidency and as a result, parliamentary oversight is going to be totally difficult to implement,” he told me.

Civil Society Watch

The aid and charity sector in Africa has long been criticized for, among other things, preserving the interests and preferences of donors from wealthier countries and perpetuating a neocolonial relationship between local people in the Global South and benefactors in the North. While international development and aid organizations have been involved in industry-wide discussions about race, racism and discrimination within the sector over the past year, those conversations have yielded few, if any, substantive remedial steps.

Writing in Reuters, Michael Hastings and Joakim Reiter discuss how Western funding agencies can work better with civil society organizations on the African continent. They discuss a new report titled “Barriers to African Civil Society: Building the Sector’s Capacity to Scale Up,” which examines the difficulties African-led civil society organizations face not only in building capacity, including funding and restrictive government policies, but also the power imbalances between them and international NGOs based in the Global North.

Culture Watch

Over the past two decades, there has been a resurgence of a globalized flow of contemporary and modern African art, where the boom of African works of art in global markets has led to the growth of museums, galleries and exhibitions across the continent and in the African diaspora.

Daniel Renjifo writes for CNN about the big splashes made by African artists on the continent and abroad.

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Chris O. Ogunmodede is an associate editor with World Politics Review. His coverage of African politics, international relations and security has appeared in War on The Rocks, Mail & Guardian, The Republic, Africa is a Country and other publications. Follow him on Twitter at @Illustrious_Cee.