Comrades-in-Theft

FROM PRESIDENTS DOWN TO CLERRKS, CORRUPTION IS BECOMING ENDEMIC IN AFRICA

Lazarus Sauti

Former President Rupiah Banda’s alleged corrupt dealings during his tenure as Zambia’s Head of State from 2008 to 2011 has reignited calls for deeper probes into the activities of Africa’s leaders.

According to figures made available by the AU in March this year, more than US$148 billion is lost to corruption in Africa every year, which is equivalent to 25 percent of the continent’s GDP.

A World Bank study adds that corrupt public officials in developing countries pocket as much as US$40b annually, a figure that represents 40 percent of official aid from America, Europe and Asia.

The UN Economic Commission for Africa (UNECA) estimates that each African country on average loses US$25b annually to corruption, smuggling and under-invoicing of trade.

In its report on illicit financial flows from Africa, the continent has in the past 40 years lost nearly US$2 trillion to Western countries through corrupt practices.

UNECA says capital flight resulted in financial resources loss between 1970 and 2008 estimated at US$854b.

A further US$945b has been lost to cross-border illegalities such as mis-invoicing and smuggling.

The Africa Research Online journal states that, “Illicit financial flows mean that Africa is the world’s biggest net creditor … (and) these outflows are at least double the amount of development assistance the continent receives.”

Southern Africa has lost a cumulative US$174.751b; West and Central Africa have lost US$374.109b, while North Africa’s losses are put at US$229.737b.

In Southern Africa, Angola leads with losses of US$71.513bn. Botswana lost US$1.828b, the DRC lost US$30.725b; South Africa lost US$36.161b; Zimbabwe lost US$22.623b, and Zambia lost some US$24.412b.

Mozambique, Malawi and Swaziland lost US$14.520b, US$2.293b and US$2.088b respectively.

Nigeria is the country with the biggest estimated losses at US$296.221b, followed by Angola’s plus-US$70b losses.

While court cases such as Former President Banda’s throw the spotlight on the actions of leaders, there has been very muted debate about what experts refer to as “quiet corruption”, and the role of Western corporations and governments in generally fuelling corruption in Africa.

The saying goes “it takes two to tango”, and as such the scourge of corruption will never be holistically dealt with unless all aspects of graft are tackled.

The scale of the losses shows that corruption has become endemic not just among Africa’s political leaders, but also among business leaders and ordinary people.

Quiet Corruption

Corruption by “big fish” often gets the spotlight, but “quiet corruption” is frequently simmering below the surface and hindering the continent’s growth.

The failure by public servants to deliver goods and services in the absence of kickbacks is a case in point.

A World Bank report says this “quiet corruption” is a significant obstacle to the realisation of the Millennium Development Goals in Africa.

“A child denied a proper education because of absentee teachers will suffer in adulthood with low cognitive skills and wealth health. The absence of drugs and doctors means unwanted deaths from malaria and other diseases…

“Farmers (who) receive diluted fertilisers may choose to stop using them altogether, leaving them in low-productivity agriculture.”

Brian Mavhudzi, a Zimbabwean policy and planning expert, says there can be no development when corruption is allowed to fester.

“Quiet corruption must be an area of concern for African governments. We need codes and regulations in place to monitor the conduct of all public servants, from Presidents down to cleaners,” Mavhudzi said.

Shanta Devarajan, chief economist for the World Bank’s Africa Region, adds: “Quiet corruption, although smaller in monetary terms, is particularly harmful for the poor, who are more vulnerable and reliant on government services and public systems to satisfy their most basic needs…

“Quiet corruption does not make headlines the way bribery scandals do, but it is just as corrosive to societies.”

Joel Kibazo of London-based think tank Chatham House says quiet corruption could be the most corrosive form of graft around.

“Of course the big corruption where you take millions or billions is really important – but in some ways that is not what affects everyday people, quite corruption does.”

Devarajan says tackling quiet corruption will require “a combination of strong and committed leadership, policies and institution at the sectoral level, and – most important – increased accountability and (participation) by citizens”.

What this means is that political will is needed to genuinely tackle corruption at all levels. Legislative gaps must be filled and law enforcement must be strengthened.

South African investigative journalist William Gumede says, “The corruption-fighting capacity of existing institutions should be strengthened.

Therefore, Africans need independent anti-corruption structures, which should be led by agencies in the private sector or civil society.”

As such, governments must start punishing corrupt behaviour through legal, social and political means, while also rewarding commendable behaviour by public servants so as to discourage dishonesty.

The International Hand

Phillippa Lewis, writing for Think Africa Press in March 2013, argues that corruption in Africa cannot be completely dealt with if corruption in the West is not concurrently tackled.

“Corruption is a problem with which most of the world is still struggling, developed countries included.

“In a telling case in 2008, for example, German multinational Siemens was found to have had a slush fund totalling more than (US$1.7b) to help win overseas contracts from 2001 to 2007. The company was investigated for bribe-paying, corruption and falsifying corporate books and, after much plea bargaining and negotiating, was fined a record US$800 million.

“This kind of corruption can sometimes also be part and parcel of African corruption in that such companies are on the lesser-examined supply side of bribes while African governments are on the demand side.

“In 2010, for instance, BAE Systems, one of the world’s largest defence contractors, pled guilty to criminal charges regarding contracts won from countries including Tanzania and South Africa. BAE was investigated by the UK’s Serious Fraud Office in a long-running case and ended up paying (US$460m) in fines.”

Lewis says the UK government and its British Export Credits Guarantee Department (ECGD) helps exporters invest in “high-risk” projects, many of which allegedly involve corruption and environmental destruction.

Countries like Lesotho reportedly owe more than 50 percent of their national debt to export credit agencies such as the British ECGD, and – Lewis says – while not all these debts are “necessarily economically corrupt, they contribute to a climate of broader corruption in which moral standards are seemingly bypassed in pursuit of economic gain by developed countries”.

Lewis says “local efforts (to combat corruption) can only be effective if they are not contradicted by wide-scale corruption at the upper echelons of public life, including at the international level”.

She concludes, “Corruption, toxic debt and dubious arms deals continue to plague developing countries, but the blame for this cannot be solely placed on those in the developing world.

“Instead, developed countries must look a little closer to home and realise that true change requires transparency and accountability at all levels and in all states.”

Under the relevant provisions of UN Convention Against Corruption (UNCAC), state parties have to trace, identify, freeze, and confiscate proceeds of corruption and repatriate them to the legitimate owners.

And both the UN and the World Bank concur that this provision is the most potent assault against corruption.

“However,” the UNECA report on illicit financial flows from Africa says, “in order to legitimately recover stolen assets under the UNCAC framework and international law, the stolen assets or their transforms have to be identified, which implicitly renders the following as the most pressing issues in the global fight against corruption: financial transparency particularly beneficial ownership, domestication of the UN convention, and streamlining of mutual legal assistance procedures.

“It demands implicitly that African countries rise to the occasion by quickly domesticating UNCAC provisions and concurrently improving their investigative infrastructures and prosecutorial acumen.

“This action plan should include where necessary a protocol for requesting financial and technical assistance from the global community in order to accomplish the ultimate goal of establishing an effective stolen asset recovery regime — the core of the anti-corruption strategy and better governance and institutions.”