China and Africa: Corruption in Namibia

Posted: Friday, July 24, 2009
Author: Natalie Matthews

The biggest China-Africa news at the moment concerns allegations of corruption surrounding a contract in Namibia for a Chinese company recently headed by Hu Haifeng, the son of China’s president. The corruption probe surrounds Nutech Company Limited, which makes advanced security scanners used in airports and customs warehouses. Nutech’s Africa representative, Yang Fan, and two Namibians are accused of bribery to secure a $55.3 million contract to install Nutech scanners at customs inspection points in Namibia.

The cost was mostly to be covered by a soft loan granted by China on the condition the scanners were purchased from Nutech. The Namibian government paid $12.8 million as a “manufacturing deposit” to Nutech in February which was allegedly immediately transferred to a company listed as a Nutech consultant and then split among the defendants. The irregularity was discovered through a routine investigation under Namibia’s new money-laundering law.

There is currently no public evidence that Hu Haifeng or other high officials knew of the Namibian dealings. However, Hu Haifeng and Nutech have been tied to corrupt contracts in South Africa and Singapore. Nutech is currently facing accusations of “illegal dumping” in the European Union. Namibia’s prosecutor general has requested to interview Hu Haifeng as a witness.

The lives of top leaders are not subject to open discussion in China. The controversy surrounding his son’s business activities could have domestic political consequences for President Hu. This case could be especially damaging for Hu as China’s people become increasingly fed up with corruption.

President Hu began his administration with a strong anti-corruption position. The seriousness with which the scandal is regarded by the CCP can be seen in the internet censorship of the following search keywords: “Hu Haifeng Namibia, Namibia bribery investigation, Yang Fan bribery investigation, Nutech bribery investigation, southern Africa bribery investigation.” Popular news portals that covered the story (with no mention of Hu Haifeng) were shut down for a period of time and the articles removed.

The Namibia’s defense chief has been suspended and the corruption probe is likely to touch more Namibian officials. Chinese officials will likely remain untouched but the allegations are nonetheless damaging. The scandal will not significantly alter the way China does business in Africa. It is an interesting evolution in Sino-African relations that Namibia’s anti-corruption commission could reach such high levels of the Chinese government. Like the African protest in Guangzhou and threats to China abroad from its domestic treatment of minorities, this is certainly not business as usual.