K2 Intelligence was delighted to host Professor Abdullahi Shehu as guest of honour at the Henry Jackson Society on 20 September 2016 for an event to discuss the commercial and legal challenges of operating in West Africa in the face of widespread corruption.
From 2006 to 2014, Professor Shehu served as Director General of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), a specialised institution of the Economic Community of West African States (ECOWAS) based in Dakar, Senegal.
During the course of his 27-year career, Professor Shehu has held positions in policy units, law enforcement, and academia, both in Nigeria and in international institutions. This has given him a rare and integrated perspective on the challenges that corruption in West Africa has caused both for investors and the local population.
In the course of the discussion, the following key points were highlighted:
- There remains significant opportunities for investors in West Africa. The challenges posed by corruption are not insurmountable, although successful navigation of the issues requires careful consideration and planning prior to making any significant investment.
- The state-led fight against corruption remains largely uncoordinated in West Africa. Investors looking to expand their footprint or embark on new investments need to develop a model that is specific to the circumstances of each country. Furthermore, the model needs to be adaptable to a range of situations and changing circumstances on the ground. A static, “one model fits all” solution will not be sufficient to deal with the diverse issues at the roots of corruption nor will it enable investors to tackle the problem in its varied manifestations.
- Robust training of local and foreign staff and the implementation of rigorous internal policies and procedures are key to mitigating operational and reputational risk—both of which ultimately negatively impact the bottom line. Such policies should extend to regular screening of suppliers and potential joint venture partners.
- Investors should remember that the problem of corruption is not restricted to the country in which the practice first takes place. As has been seen with a number of high-profile West African corruption cases over the years, “it takes two to tango”—the proceeds of corruption and illegal activity almost always find their way into foreign financial systems. In order to decisively tackle corruption in developing economies, and in West Africa in particular, foreign nations need to consistently demonstrate a willingness to address the dimensions of West African corruption that fall within their jurisdictions.
- International financial institutions are an important ally in the fight against corruption and related money laundering. Through their commitments to monitor robust anti-money laundering/countering the financing of terrorism (AML/CFT) systems, these institutions are expected to identify and block the proceeds of corruption. Such effective monitoring is vital to help reduce the advantage and financial benefit individuals gain from engaging in corrupt practices.
- On the part of local governments, state officials need to reduce the opportunities that provide space for corrupt practices to be entered into with impunity in a way that is suited to the local environment. This can be done in several ways, including reducing the discretion and autonomy of public office holders and vested interests.
- Greater civic participation and shifts in public opinion are key factors in tackling corruption throughout West Africa. The weight of public opinion is one of the more powerful weapons against corruption; until corrupt practices are no longer deemed “acceptable” it is unlikely they will be effectively halted, or curbed. Civil society has a role to play in building such grass-roots sentiment and pushing for greater accountability across all tiers of government and within state institutions.
If you would like to discuss any of the points raised in this article, or would like assistance in operating in West Africa, please contact Hugh Petre at firstname.lastname@example.org.