Hundreds of millions of pounds of European Union aid to help the poor in Africa is being handed over without public scrutiny to banks and private equity companies and funnelled into tax havens, a new report claims.
Counter Balance, a group of non-government organisations, has investigated the €1.1bn (£932m) of annual aid from the taxpayer-funded European Investment Bank to Africa and the Caribbean. It alleges that the cash disappeared into African banks, a Luxembourg tax haven and a Nigerian bank whose managing director was under investigation for fraud.
The EIB is able to borrow billions on the markets to fund the aid because it has a triple AAA credit rating. This means Britain and other leading EU economies are underwriting its loans and there is now concern, following the Irish financial crisis, that there could be problems with its lending to Africa.
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