Financial Crime World

Here is the converted article in Markdown format:

CENTRAL AFRICAN REPUBLIC: Financial Crime and Corruption Plague Nation’s Economy

Despite being endowed with valuable resources such as diamonds, gold, and uranium, the Central African Republic (CAR) is struggling to make a significant impact on its economy. The country’s Gross Domestic Product (GDP) stands at a dismal USD 2.52 billion, and corruption among the political elite and government officials has been identified as one of the main factors contributing to this poor economic performance.

Corruption Perception Index

According to Transparency International’s Corruption Perception Index, CAR ranked 154th out of 189 countries in 2021, a decline from its previous year’s ranking of 146th. The country needs to adopt a far better anti-corruption policy alongside a strengthened judiciary if it is to improve its economy and become a more attractive destination for investors.

Weak Constitutional Framework

One of the main challenges facing CAR is its weak constitutional framework for fighting corruption. The Constitution has two main anti-corruption provisions, including:

  • Responsible Governance article: Provides for the transparent and equitable distribution of resources
  • Financial Disclosure Article: Requires all civil servants to publicly declare their wealth for scrutiny by the constitutional court

However, despite these provisions being in place, a weak judiciary has led to the disregard of some corruption cases, preventing it from being an effective tool in the fight against corruption.

Effective Anti-Corruption Policy: Rwanda’s Model

In contrast, Rwanda, which is more populated and has fewer resources, has made significant progress in reducing corruption through its National Anti-Corruption Policy. The policy has resulted in:

  • Arrests of government officials and police officers
  • Introduction of harsh penalties for judges found to be corrupt
  • Effective judiciary: A special chamber of judges specifically designed to handle economic crimes

Corruption in CAR

In CAR, however, corruption is rampant across all three arms of government. Political influence over the judiciary has led to:

  • Disregard of many corruption cases
  • No consequences for non-compliance with financial disclosure articles

Corruption among law enforcement officers has also contributed to:

  • Reduction of the tax base: Private businesses often operate without licenses in exchange for bribes
  • Discouragement of investors from investing in CAR

Border Corruption

The country’s porous border points have also been a major source of corruption, with customs officials taking bribes and allowing smuggled resources to illegally leave the country. A study by the United Nations Panel of Experts found that:

  • 97.5% of gold produced in CAR is smuggled out of the country
  • Cameroon is the main destination

Way Forward

For CAR to reach its potential, it needs to adopt a national anti-corruption policy that contains guidelines for both the private and public sectors. The policy must also be accompanied by:

  • Strengthened judiciary: Currently understaffed and poorly funded
  • Reduced involvement of legislators in amending anti-corruption laws

Without a strong anti-corruption policy and a robust judicial system, CAR will continue to struggle with financial crime and corruption, undermining its prospects for economic development and opening it up to local and international conflict profiteers.