{"id":272576,"date":"2026-02-03T23:01:17","date_gmt":"2026-02-03T23:01:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/272576\/"},"modified":"2026-02-03T23:01:17","modified_gmt":"2026-02-03T23:01:17","slug":"asian-financial-hubs-are-reshaping-africas-offshore-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/272576\/","title":{"rendered":"Asian financial hubs are reshaping Africa\u2019s offshore economy"},"content":{"rendered":"

As traditional offshore havens like Switzerland tighten regulations and financial scrutiny, African elites and companies are increasingly turning to Asian financial hubs \u2014 notably Dubai, Singapore and Hong Kong \u2014 according to a recent University of Oxford study<\/a>.<\/p>\n

Capital flight exacts a heavy toll on African economies, with the continent haemorrhaging over $88 billion each year according to U.N. figures cited in the study. The three Asian financial centers are increasingly attractive destinations for this money and have become among \u201cthe fastest growing and most significant transnational connections for Africa.\u201d<\/p>\n

The study, a working paper that has not been peer-reviewed, was authored by Ricardo Soares de Oliveira, professor of political science at Sciences Po and a senior research fellow at Oxford.<\/p>\n

The research \u201cwas motivated by the fact that African offshore links with Asian financial centres have massively increased over the past decade or so, but that there are few studies addressing this dynamic,\u201d de Oliveira told the International Consortium of Investigative Journalists.<\/p>\n

He said that: \u201cWhile some financial centres have become more tightly regulated, and less accessible to African financial flows, other centers have come up to replace them. There is certainly no lack of supply to meet the demand, and no reason to believe that hiding money abroad has become more difficult.\u201d<\/p>\n

Among Asian financial hubs, Dubai stands out for its deep financial ties to Africa, not only through the presence of large emirati firms on the continent but also through the emirate\u2019s role in illicit financial flows and commodity-based money laundering.<\/p>\n

Dubai is now the fourth largest source of foreign direct investment to the continent.<\/p>\n

The city\u2019s proximity to Africa and extensive flight connections, combined with its developed infrastructure and glitzy image, have helped make it a destination of choice for wealthy Africans, according to the Oxford report. Beyond that, the emirate has actively lured high-net-worth individuals with tax incentives, light regulation, and financial secrecy.<\/p>\n

The report details Dubai\u2019s emergence as a hotspot for money laundering and illicit financial flows \u2014 a development highlighted by the Panama Papers<\/a> and other investigations by the International Consortium of Investigative Journalists. As ICIJ\u2019s Swazi Secrets<\/a> investigation revealed, much of that money is laundered through gold.<\/p>\n

According to the Oxford study, Dubai has become \u201cthe lynchpin of gold smuggling from across Africa, accounting for some 95% of the illegal trade from East and Central Africa in 2020.\u201d<\/p>\n

Once in Dubai, illicit gold is smelted with other gold and from there shipped to international markets.<\/p>\n

There is certainly no lack of supply to meet the demand, and no reason to believe that hiding money abroad has become more difficult.<\/p>\n

\u2014 Ricardo Soares de Oliveira, report author and professor at Sciences Po\u00a0<\/p>\n

Dubai is also a notorious haven for corrupt elites and their assets, and for its reluctance to cooperate with foreign policing bodies. \u201cIf based there, the rich and powerful are almost certain to escape legal prosecution at home,\u201d the report noted.<\/p>\n

Among the prominent African politicians and businesspeople hiding in Dubai is Isabel Dos Santos, the daughter of Angola\u2019s former autocrat, who continues to evade Angolan authorities. The Gupta brothers, wanted in South Africa for grand-scale corruption, also remain safe there despite South Africa\u2019s attempts to have them extradited.<\/p>\n

Another example of Dubai\u2019s growing importance to African elites is the boom in real estate investments from Africa, which surged more than fourfold between 2013 and 2018.<\/p>\n

In a sign of growing international pressure, the Financial Action Task Force \u2014 a global anti-money laundering body \u2014 placed Dubai on its \u201cgrey\u201d list of countries under increased monitoring to address anti-money laundering deficiencies.<\/p>\n

It was removed from the list in 2024 in a move that was seen by some as driven by geopolitical considerations. Politico reported<\/a> that \u201ca group of European countries that originally supported sanctioning the United Arab Emirates began urging the body to remove the country from the gray list last year.\u201d This coincided with European attempts to win energy support from the Gulf after Russia\u2019s 2022 invasion of Ukraine.<\/p>\n

\u00a0The need for \u2018truly global\u2019 reforms<\/p>\n

The report notes that, compared to Dubai, Singapore and Hong Kong are less popular with African elites as places to live, but these two financial centers are of growing importance to Africa\u2019s offshore economy and offer similar laissez-faire regulation, asset protection, secrecy and tax exemptions.<\/p>\n

With the massive expansion of Chinese interests in Africa, Hong Kong has positioned itself as a stepping stone to the African market. The study notes that Hong Kong offers \u201cprivileged access to the Chinese mainland,\u201d ease of doing business, low regulation, and a credible common law legal system.<\/p>\n

Many Chinese firms in Africa, notably in the corruption-prone extractive industries, rely on opaque corporate arrangements and transactions in Hong Kong. The territory\u2019s secretive business environment enables tax avoidance and opportunities for money laundering that harm African economies, according to the report. For the same reasons, it is a favored destination for African elites to hide ill-gotten assets and as a conduit for illicit transactions.<\/p>\n

Leaks like the Panama Papers have shed light on Hong Kong\u2019s central role in the offshore world. The busiest offices of Mossack Fonseca, the firm at the heart of the Panama Papers, were in Hong Kong and China. <\/p>\n

However, the Oxford report points to a recent shift away from Hong Kong due to Western corporate flight amid China\u2019s slowing growth, Beijing\u2019s political repression and clampdowns on foreign businesses. And according to the report, the departure of Western firms works in favor of other offshore centres, like Singapore.<\/p>\n

ICIJ\u2019s Offshore Leaks showed the importance of Singapore-based firms like Portcullis TrustNet<\/a> and Asiaciti Trust<\/a> in setting up shell companies and structuring complex transactions to conceal assets and mask ownership.<\/p>\n

Prominent African elites have relied on the services of such firms to help them hide their assets and interests behind Singapore\u2019s secrecy laws. Among those elites, as reports from the ICIJ-led Pandora Papers investigation showed, were Zimbabwean mining magnate Billy Rautenbach, who was sanctioned at the time, and Abubakar Atiku Bagudu, a prominent Nigerian politician accused of having been complicit in the rampant looting of his country.<\/p>\n

The rise of the three Asian offshore hubs followed tightened financial regulation in Western economies in response to the 2008 financial crisis. While Africa continues to lose billions to illicit financial flows, African governments have been ambivalent about addressing the problem. \u201cThere are many reasons for this hesitation,\u201d de Oliveira argues, \u201cbut vested interests by those who benefit personally from offshore strategies is one of them.\u201d<\/p>\n

And despite the shift towards Asia, Western jurisdictions and firms remain central players in the offshore world. The offshore industry is completely interwoven and both Western and Asian offshore centers, the report notes, \u201cfunction in strikingly similar manners,\u201d while Western blue-chip companies remain key players in Asian offshore markets.<\/p>\n

Though the rise of the trio of Asian financial hubs is widely seen as \u201ca new post-West business arrangement\u201d unconstrained by \u201cgood governance moralizing\u201d and \u201cpractical barriers,\u201d the study suggests that these trends do not signal an entirely separate and competing offshore system.\u00a0 Instead, this represents the expansion and diversification of an existing global offshore network.<\/p>\n

Reforms to curb illicit financial flows, says de Oliveira, therefore \u201cneed to be truly global.\u201d<\/p>\n

\u201cIf they are not, tightening up in some jurisdictions merely shifts business away to other more permissive jurisdictions. If their home countries become more demanding, Western service providers are happy to follow the business and expand their footprint in the new locations.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"As traditional offshore havens like Switzerland tighten regulations and financial scrutiny, African elites and companies are increasingly turning…\n","protected":false},"author":2,"featured_media":272577,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":{"0":"post-272576","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-il","11":"tag-israel"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/272576","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=272576"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/272576\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/272577"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=272576"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=272576"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=272576"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}