Part Two: The Architecture of Invisibility — Legal, Financial, and Data Mechanisms That Hide Beneficiaries
By Emmanuel Mihiingo Kaija
While Part One asked where the money goes, Part Two confronts the deeper question of how the system is designed so that we are not meant to know. Across East Africa, sectors generating enormous wealth—mining, construction, energy, transport, and finance—exhibit a paradox: they contribute visibly to GDP, exports, and investment, yet the ultimate beneficiaries are largely invisible. This opacity is not primarily due to corruption in the conventional sense; it is built into corporate structures, financial arrangements, and regulatory frameworks.
The corporate architecture itself is the first layer of invisibility. Major projects are rarely held by a single local entity with transparent shareholders. Instead, ownership is fragmented through special purpose vehicles (SPVs), joint ventures, and offshore holding companies. For example, Tanzania’s Geita Gold Mine, operationally managed by AngloGold Ashanti Tanzania Limited, is ultimately owned by a South African parent company, with financing routed through Mauritius-based holding entities (Bank of Tanzania, 2025). Despite producing USD 3.05 billion in gold exports in 2023, the natural persons or institutions that ultimately benefit are not publicly disclosed. Similarly, Uganda’s 50 MW Nzizi Thermal Power Station, which generated an estimated USD 45 million in revenue in 2025, is held by shareholders across Uganda, Mauritius, and the United Arab Emirates, yet no individual-level ownership information is available (UNCTAD, 2024). Kenya’s Standard Gauge Railway, costing USD 3.8 billion and generating more than USD 120 million in cargo revenues in 2024, demonstrates a comparable pattern: profits are distributed through complex arrangements among government entities, foreign contractors, and SPVs, obscuring final beneficiaries (Deloitte, 2025). In all these cases, wealth is produced and recorded in macroeconomic terms, yet the trail to actual recipients dissolves behind layers of corporate complexity.
Legal frameworks and policy incentives amplify this invisibility. East African countries intentionally structure investment regimes to attract foreign capital, often at the cost of transparency.
Double taxation treaties, such as Kenya–Mauritius (1988), Uganda–Netherlands (1994), and Tanzania–UAE (2000), enable profits to be routed through low-tax jurisdictions before reaching ultimate recipients. UNCTAD (2020) estimates that Africa loses between USD 50–90 billion annually through profit shifting, much of it technically legal. Beneficial ownership laws, introduced in Kenya (2019), Uganda (2021), and Tanzania (2022), mandate disclosure of ultimate owners, but compliance is limited. A 2024 World Bank audit found that fewer than 18 % of Tanzanian mining firms disclosed natural persons as beneficiaries, highlighting weak enforcement, incomplete reporting, and regulatory capacity gaps. Even when registries exist, they often stop at the level of corporate nominees rather than revealing actual economic beneficiaries.
Financial mechanisms further fragment visibility. Large-scale infrastructure and extractive projects rely on syndicated loans, blended finance, and hedging instruments.
For instance, the Devki Mega Steel Plant in Uganda, a USD 500 million project projected to employ 15,000 initially and generate USD 1.1 billion in exports by 2027, channels profits through multiple SPVs, offshore holding companies, and international banks (Business Times Uganda, 2025). Each participant in the financial chain receives legally mandated fees, dividends, or interest, yet the public cannot trace who ultimately benefits. These mechanisms are not accidental; they are engineered for risk management, capital attraction, and regulatory compliance, but they have the side effect of erasing beneficiary visibility.Transport and logistics sectors provide another clear example. Billions of dollars’ worth of goods move annually along the Northern and Central Corridors linking Mombasa, Nairobi, Kampala, Kigali, and Dar es Salaam. Every stage—ports, rail, trucking firms, warehousing, insurance, customs—generates revenue. Yet ownership is fragmented among private firms, concessions, franchises, and cross-listed entities. Container traffic, cargo handling, and rail tariffs are recorded in national accounts, but the identities of those who collect profits are rarely public. Infrastructure hums with visible activity; economic beneficiaries remain hidden.
Data governance and statistical practices compound the problem. East African national statistics offices excel at measuring GDP, sectoral output, and exports, but they rarely track ownership, profit distribution, or ultimate control. Investment authorities report inflows but not final recipients. Tax authorities monitor transactions but not networks of corporate control. Corporate registries maintain static ownership records without cross-referencing financial or customs data. The result is an economy that can measure production with precision while remaining blind to the beneficiaries of that production.The social consequences of this structural invisibility are profound. Agriculture still employs 65–80 % of East Africa’s population, yet high-growth sectors such as mining, construction, and finance contribute disproportionately little to employment or public investment relative to their GDP share (East African Community, 2025; World Bank, 2024). Citizens witness cranes, railways, and export booms, yet healthcare, education, and formal employment remain underfunded. When beneficiaries cannot be identified, accountability weakens, redistribution falters, and political legitimacy becomes fragile.The problem cannot be solved by targeting corruption alone. Much of what produces invisible wealth capture is legal, regulated, and professionally managed. Lawyers, accountants, and regulators design and enforce these structures. The deeper challenge lies in the architecture itself: legal rules, corporate arrangements, and financial incentives that facilitate growth while erasing visibility. Part Three will explore who can pierce this fog—regulators, journalists, civil society organizations, and researchers—and what reforms, cross-border coordination, and integrated data practices are required to make East African wealth legible again. Because an economy in which profits abound but beneficiaries are nowhere identifiable is not just inefficient—it is politically and socially unstable.
References
Bank of Tanzania. (2024). Monthly economic review. Bank of Tanzania.
Business Times Uganda. (2025, November 12). Devki Mega Steel Plant to generate 15,000 jobs at start-up.
Business Times Uganda.Deloitte. (2025). East Africa economic outlook 2025. Deloitte Insights.East African Community. (2025).
EAC statistical abstract. EAC Secretariat.Kenya National Bureau of Statistics. (2026).
Quarterly gross domestic product report: Q3 2025. KNBS.UNCTAD. (2020).
Tackling illicit financial flows for sustainable development in Africa. United Nations Conference on Trade and Development.UNCTAD. (2024).
World investment report 2024: Investment facilitation and digital government.
United Nations Conference on Trade and Development.World Bank. (2024).
Uganda economic update: Investing in people. World Bank Group.World Bank. (2025). Tanzania economic update: Growth, mining, and infrastructure. World Bank Group.
