South Africa Moves Against Secretly-Owned Companies

The Tax Justice Network-Africa has issued a press release praising the South African government’s commitment to register and make public the “beneficial owners” of all companies incorporated in the country. “Beneficial owners” are those who ultimately benefit from a company. In many countries, governments do not require such information, resulting in anonymously owned companies that may be used by corrupt politicians or others who want to hide their identity. The “Panama Papers” highlight the role such companies play in activities ranging from money laundering to tax evasion.

The South African government’s announcement was made on the margins of the Africa regional meeting of the Open Government Partnership. It includes reference to the register being available to the public, not just the authorities. Denise Dube Mubaiwa, of Economic Justice Network of the Fellowship of Christian Councils in Southern Africa, commented, “Public registers give investigators, journalists, civil society, and the general public the tools necessary to peel back the layers of secrecy that anonymous companies create.” She called on the Zuma administration to send to parliament quickly the necessary draft legislation.

Former South African President Thabo Mbeki chaired in 2015 the High Level Panel on Illicit Financial Flows from Africa. The panel urged governments to create public registers of beneficial ownership. The panel estimated that Africa loses some $50 billion every year through illicit financial flows.

The Open Government Partnership presses governments to promote transparency and good governance. Some sixty-nine governments now participate. However, sub-Saharan Africa is underrepresented. In addition to South Africa, only Malawi, Tanzania, Kenya, Ghana, Benin, Ivory Coast, and Sierra Leone participate. Notably absent is Nigeria, which U.K. Prime Minister David Cameron has artlessly characterized as one of the most corrupt countries in the world. Nigeria is ostensibly the largest economy in Africa and in the midst of a major anti-corruption drive sponsored by President Muhammadu Buhari.