Liberia's new AML/CFT law is a step towards good governance in a country looking to the future (Credit: Kenneth Harper, Flickr Creative Commons)
On May 2nd, the President of Liberia signed into law a long anticipated bill to counter money laundering and terrorism financing (AML/CFT). The new Act, which included amendments to various other laws, will provide more effective legislative tools with which to fight corruption, money laundering and other financial crimes. The new Act will provide the legal basis to establish a Financial Intelligence Unit as the central coordinating agency in these efforts, provide better tools for authorities to seize and freeze the proceeds of crime, and improve cooperation in information- sharing and investigations. It will also require financial institutions and other entities often used to launder proceeds of crime, to identify and report suspicious transactions to authorities.
Photo: Arne Hoel
In Uganda, teachers in public primary schools are absent 27 percent of the time. In Chad, less than one percent of the non-wage recurrent expenditures reaches primary health clinics. In West Africa, about half the fertilizer is diluted before it reaches the farmer.
Many of the objections to my blog post, “Another reason why aid to Africa must increase” centered around corruption. “I disagree. Africa needs to get rid of corruption…” said one commentator, while another said, “Aid to African countries must follow country steps in good governance, democracy, fighting corruption, etc.”
I think we can agree on the following two facts:
- There is considerable corruption in Africa. The recently-released Transparency International Corruption Perceptions Index for 2009 finds 10 African countries in the bottom decile (with Somalia at the very bottom of the list). Of the 47 African countries reviewed, 31 scored less than 3 out of 10, “indicating that corruption is perceived as rampant.” Another data source, World Governance Indicators, reaches a similar conclusion.
- Corruption undermines economic growth and poverty reduction.
But even with these two facts, it doesn’t necessarily follow that aid should be cut off from countries with high corruption.