African elites and companies are increasingly routing money through Dubai, Singapore and Hong Kong as traditional offshore centers such as Switzerland tighten scrutiny, according to a new University of Oxford working paper reported by the International Consortium of Investigative Journalists. 

The study, described by ICIJ as a non-peer-reviewed working paper authored by political scientist Ricardo Soares de Oliveira, argues that Africa loses “over $88 billion” a year to capital flight and that the three Asian hubs have become among “the fastest growing and most significant transnational connections for Africa.” 

Dubai stands out in the paper for its deep financial ties to Africa and its role in illicit financial flows and commodity-based money laundering, ICIJ reported. The paper notes Dubai has become the continent’s fourth-largest source of foreign direct investment and has actively courted wealthy Africans with tax incentives, light regulation and financial secrecy, helped by proximity, flight connections and its image. 

The Oxford study also links Dubai’s offshore appeal to gold, describing the emirate as “the lynchpin of gold smuggling from across Africa,” accounting for roughly 95% of the illegal trade from East and Central Africa in 2020, ICIJ said. 

The report further characterizes Dubai as a haven for corrupt elites due to limited cooperation with foreign law enforcement, citing figures such as Angola’s Isabel dos Santos and South Africa’s Gupta brothers, and points to a surge in African real estate investment in Dubai that grew more than fourfold between 2013 and 2018. 

The study characterizes Singapore and Hong Kong as less popular residential destinations for African elites than Dubai but increasingly important to Africa’s offshore economy, offering similar asset protection, secrecy and tax exemptions. 

“While some financial centers have become more tightly regulated, and less accessible to African financial flows, other centers have come up to replace them,” de Oliveira said in the report. “There is certainly no lack of supply to meet the demand, and no reason to believe that hiding money abroad has become more difficult.”

Read more at ICIJ

Read the report here