ANALYSIS: Trump’s Executive Order could worsen corruption in Nigeria, other African countries

United States (US) President Donald Trump’s executive order this week suspending the operation of the Foreign Corrupt Practices Act (FCPA) will likely be felt particularly sharply in Africa, where corruption drains about $10 billion a year. Some estimates are as high as US$140 billion.

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The FCPA was introduced in 1977 and prohibits US companies and individuals – as well as foreign entities with a US connection – from bribing foreign public officials. The ‘connection’ can be as minor as a telephone call, email or text sent or received from the US in a corrupt business deal, giving the law its broad scope.

David Lewis, who founded South Africa’s Corruption Watch, told Currency that the FCPA was “the most effective anti-corruption instrument in the world, without a doubt,” and said suspending it would definitely increase corruption. He was referring mainly to South Africa, but the act has been used to prosecute many cases across Africa.

Mr Trump suspended the FCPA for 180 days pending a review of its operations. He said the act had been increasingly “stretched beyond proper bounds and abused in a manner that harms the interests of the United States.’ It had done so by reducing US companies’ competitiveness in ‘gaining strategic business advantages whether in critical minerals, deep-water ports, or other key infrastructure or assets.”

In other words, Mr Trump was saying the FCPA’s criminalisation of US companies that bribe foreign governments was putting them at a disadvantage against companies from other countries that don’t criminalise bribery.

This decision was similar to other orders Trump has issued in his first three weeks in office, slashing restrictions, regulations and other controls on US businesses – and in doing so, putting their interests ahead of those of ordinary people in America and beyond.

“[The FCPA] was the first law of its kind in the world,” Transparency International (TI) said this week. It said that by suspending it, Trump had delivered a major blow to the fight against foreign bribery worldwide. “It risks undermining decades of progress in tackling cross-border corruption and puts international stability at risk. This pause will work to the advantage of unscrupulous business actors around the world who until now feared US criminal pursuits.”

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TI said the US had long been respected as a global leader in foreign bribery enforcement. In 1997 the FCPA was internationalised with the adoption of the Organisation for Economic Co-operation and Development Anti-Bribery Convention, which now has 46 parties.

According to TI Chair François Valérian, “US enforcement of the FCPA has long been a gold standard in the fight against corruption. Weakening it will empower wrongdoers and send a dangerous signal that bribery is back on the table. Foreign bribery is by no means, as suggested by last night’s decision, a routine business practice.”

As an example of FCPA achievements, TI cited a recent case where a multinational mining company was found to have bribed officials in countries such as the Democratic Republic of the Congo and Nigeria to secure lucrative business deals. Since the company was US-listed, authorities could take action for violating the FCPA.

This appeared to reference the US Department of Justice (DOJ) case brought against the Swiss-based mining conglomerate Glencore for violations of the FCPA and commodity price manipulation.

The DoJ said in 2022 that, among other bribery schemes, between 2007 and 2018, Glencore and its subsidiaries paid about US$79.6 million in bribes to obtain and retain business with state-owned and state-controlled entities in Nigeria, Cameroon, Ivory Coast and Equatorial Guinea. This included corrupt deals to buy crude oil and petrol from Nigeria’s state-owned oil company and to win crude oil contracts.

“In the DRC, Glencore admitted that it conspired to and did corruptly offer and pay approximately $27.5 million to third parties, while intending for a portion of the payments to be used as bribes to DRC officials, in order to secure improper business advantages,” the DoJ said. Glencore pleaded guilty and agreed to pay over $1.1 billion to settle the cases.

The FCPA has also been used to prosecute many other cases in Africa. Last December, consulting firm McKinsey’s South African subsidiary was ordered to pay over $122 million to settle an FCPA case in which the company bribed Transnet and Eskom officials to win contracts. This was part of the state capture saga under former president Jacob Zuma.

In 2023, the multinational mining company Rio Tinto agreed to pay a $15 million fine under the FCPA for paying $10.5 million to a Guinean government official to retain certain mining rights in that country.

In 2018 the US DoJ used the FCPA to indict Jean Boustani, an executive of the international shipbuilding company Privinvest, for bribing, among others, then Mozambican finance minister Manuel Chang. This was to authorise US$2 billion of loans to Chang’s government to buy patrol and tuna fishing boats.

Mr Chang was convicted of conspiracy to commit wire fraud, securities fraud and money laundering in a New York court last year, and was sentenced to eight and a half years in jail, plus a US$7 million fine, with more to come.

Adriano Nuvunga, Director of Mozambique’s Centre for Democracy and Human Rights and former chair of the Forum de Monitoria do Orçamento (Forum for Monitoring the Budget), which pursued Mr Chang in the courts, lamented Mr Trump’s decision to suspend the FCPA.

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“In vulnerable regions like Africa, especially Mozambique’s extractive sector, corruption has long exploited natural resources, damaging local communities,” he told ISS Today. “Mozambique is already suffering from the consequences of corruption – embezzlement, mismanagement, underdevelopment, environmental degradation and widespread poverty.

“Suspending the FCPA will only encourage further exploitation and corruption without accountability. Instead of promoting transparency and justice, this decision weakens crucial protections for human rights and sustainable development. It’s a dangerous step backward that deserves global condemnation.”

With a stroke of his overworked pen, Mr Trump turned the clock back about half a century to an era when corporations mostly from the industrialised north routinely bribed officials mostly from the developing south to win natural resources or infrastructure contracts. Bribes that some European governments even allowed their companies to claim as tax deductions.

Peter Fabricius, Consultant, Institute for Security Studies (ISS) Pretoria

(This article was first published by ISS Today, a Premium Times syndication partner. We have their permission to republish).