In his book Africa--Altered States, Ordinary Miracles, Richard Dowden quotes John Robertson, a Zimbabwean economist, on corruption. Robertson says: “We imagine corruption to be like a tick on a dog. There are some places in Africa where the tick is bigger than the dog.”
Transparency International’s 2009 Global Corruption Report (GCR) bears out Robertson’s insight. Yet, corruption in Africa does have its explanation. In her book Dead Aid, the Zambian economist Dambisa Moyo, writes: “Throughout the latter half of the twentieth century and up until the 1990s, the Cold War had provided richer countries with the political imperative to give aid monies even to the most corrupt and venal despots in Africa. One of the features of the Cold War was the West’s ability and eagerness to support, bankroll and prop up a swathe of pathological and downright dangerous dictators from Idi Amin… to Mobutu Sese Seko… to Samuel Doe. Bokassa’s coronation as Emperor of the Central African Republic in 1977 alone cost $22 million.” This view is augmented by a World Bank study which found that as much as 85 percent of aid flows were used for purposes other than that for which they were initially intended, often diverted to unproductive, if not grotesque ventures.
According to Transparency International, Mobutu is estimated to have looted Zaire of $5 billion. Roughly the same amount was stolen from Nigeria by President Sani Abacha and placed in Swiss private banks. In Africa, natural resources such as oil, minerals and high-quality wood provide unlimited opportunities for personal wealth accumulation.
Corruption happens at many different levels of bureaucracy, and has become a way of life. According to Transparency International, in Africa, the informal sector amounts to more than 40 per cent of the economy in many countries, reaching well over 50 percent in Nigeria and Tanzania. The lack of legal protection and the desire to dodge regulations makes the informal sector easy prey for extortion and the solicitation of bribes by corrupt officials. According to a May 2008 study, 90 percent of entrepreneurs in Burundi think paying bribes is standard practice. The main reasons include reducing tax payments, advancing a file in the tax service and avoiding fines. But other reasons include “persuading” an official to retrieve a “lost file” urgently needed for business or immigration purposes, and avoiding the harassment of police for invented traffic offences.
In Morocco, integrity studies found that only 7 percent of Moroccan companies say they have attempted to act when faced with corruption. Companies were unsure if they would be vindicated for their actions or even feared reprisals if they reported corrupt activities. In the words of the Transparency International report: “corrupt practices constitute a destructive force that undermines fair competition, stifles economic growth and undercuts a businessman’s own existence.”
In the last two years alone, billions of dollars have been paid in fines due to corrupt practices. This brings about low staff morale, loss of trust among customers and prospective business partners. To paraphrase author Moyo: In a world where money is just for the taking, there is no need or incentive to trust your neighbor, and no need for your neighbor to trust you. Thus the essential fabric of trust that is needed between people in any functioning society is eroded.
A section of the Transparency International report is dedicated to regulations, procurement, transparency and undue influence. In Angola and Uganda, for example, the costs of starting a business surpass the average per capita income, putting formal status well beyond the means of many informal entrepreneurs. According to Ethiopia’s Central Statistical Agency, the urban informal sector of this overwhelmingly rural country comprised almost one million people in 2003, with an initial capital of $4 billion, despite the rapid growth of the formal sector.
Morocco experiences an annual loss of some $3.6 billion, owing to lack of transparency, a considerable portion of the $13.8 billion spent annually on public procurement.
Specifics abound. In 2006, the Tanzanian government contracted a U.S. firm to build and operate a power plant. Most of the contract negotiations were carried out in secret and ultimately the plant fell behind schedule, incurring great costs. An investigating committee issued a detailed report in 2007 alleging that high-ranking officials had influenced the decision to retain the U.S. firm despite objections made by the technicians. As a result the prime minister and the current and former ministers for energy and minerals resigned.
Transparency International’s report documents many cases of managers, majority shareholders and other actors inside corporations who abused power entrusted to them for personal gain. In developing and transition countries alone, companies colluding with corrupt politicians and government officials have supplied bribes estimated at up to $40 billion annually. Research shows that one half of the international business executives polled estimated that corruption raised project costs by at least 10 per cent. Ultimately it is the citizens who must pay.
The revolving doors between public office and the private sector, also documented in the report, provide a smooth path to deceitful public procurement deals where non-competitive bidding and opaque processes lead to immense waste and unreliable services and goods. Again, it is the ordinary man and woman who suffer the devastating consequences of corruption, through water and power shortages, exploitative work conditions, unsafe medicines, illegal logging, and poorly and illegally constructed buildings that collapse and kill.
But there are promising public and private sector developments. When Ghana began to facilitate and promote registration of informal businesses, entrepreneurs reported being exposed to less corruption. Ghana and Senegal have licensed or are considering licensing informal water vendors, and have established guidelines for tanker operators and independent entrepreneurs, in an effort to reduce exposure to abuse. And in Kenya, in 2007, a new licensing law eliminated over 140 different business licenses that had previously been necessary to open a business. These excessive regulatory requirements had bred widespread opportunities for bribery in order to avoid compliance. Almost 90 per cent of the top 200 businesses worldwide have adopted business codes, according to the Transparency International, but fewer than half report that they monitor compliance. This type of corporate ethics lip service is exactly why corruption in still one of Africa’s leading growth sectors.
LANCASTER, PENN. - You'd have to be living in a cave not to know that Martha Stewart got a "five and five" sentence a few weeks ago for lying about her stocks. Chances are, you're not living in a cave, but you still don't know about one of the biggest con jobs of our time: The misuse of foreign aid to Africa.
Perhaps this is because it's not as sexy as Ms. Stewart's trial or as gut-wrenching as the genocide in the Darfur region of Sudan. Or perhaps, it is because it has been such an embarrassment to Western governments and private organizations who keep on believing that foreign aid will help Africa.
As long as corruption exists at its current levels in Africa, and as long as donors continue to look the other way, foreign aid will simply serve to keep African kleptocrats in power.
Consider this: Sub-Saharan Africa has received an estimated $114 billion in bilateral and multilateral aid from 1995-2002. Yet African countries have consistently ended up at the bottom of the United Nations Development Program's Human Development report, which measures life expectancy, gross domestic product per person, and literacy.
So you may ask the billion-dollar question: Where did the money go? Perhaps the British high commissioner to Kenya, Edward Clay, was asking the same question about official graft last month when - suggesting donor aid to Kenya could be suspended - he publicly accused unnamed Kenyan officials of behaving so gluttonously at the aid trough that they are now "vomiting on the shoes" of donors.
And sub-Saharan Africa has seen the likes of many gluttons. Some of the most infamous include Mobutu Sese Seko, the former president of Zaire (now the Democratic Republic of Congo) who allegedly stole $5 billion, and Sani Abacha, former president of Nigeria, who allegedly looted more than $2 billion. Both former leaders are dead, but their legacy of corruption continues to afflict their nations.
Corruption may not be as bad as genocide, but it is also a crime against humanity. Corruption is a killer of initiative and trust. It drives away foreign investment and undermines the development of the rule of law.
But most callously, corruption robs African children of a better future. Just ask the students in Kenya who could have had 15,000 new classrooms with the $188 million that Mr. Clay alleged has gone missing under President Mwai Kibaki's so-called anticorruption administration.
Transparency International, a Berlin-based nongovernmental organization (NGO) that tracks global corruption, ranks most African countries at the bottom of its list. Even some of the purported African success stories, such as Uganda, are at the bottom of that list.
But is there hope for the future? Much hope has been placed in the New Partnership for African Development (NEPAD), an Africa-wide initiative that calls for good governance, accountability, and a peer-review mechanism as part of its monitoring process.
The African Union (AU) - the successor of the Organization for African Unity - even adopted a Convention on Preventing and Combating Corruption last year, and 30 countries have signed it. But only three countries have ratified it - and it requires 15 ratifications to take force.
The UN has also initiated a UN Convention Against Corruption that has been signed by more than 100 countries, including Kenya which has also ratified it.
But why should America care? While many Americans are debating whether Martha Stewart should have gotten more or less than the five months in prison and five months house arrest she got for lying about her stocks, African bureaucrats are literally getting away with millions. For donor agencies and nations, as well as African societies themselves, not to make political and civil leaders accountable for aid money is to be complicit in the perpetuation of corruption.
Congress is poised to increase foreign development assistance to the world's poorest nations by nearly $2 billion, with most of that money going to combat HIV and AIDS. But HIV and AIDS spending is not free from corruption either. Fly-by-night briefcase NGOs have sprung up everywhere, even with AIDS funds and even in countries that have a great track record like Uganda.
Some donors have taken a hard line against corruption, such as DANIDA (Danish International Development Agency) which cut off aid to Malawi and Kenya as a consequence of blatant corruption. The IMF and the World Bank have also instituted the HIPC Initiative (Highly Indebted Poor Country), which provides debt reduction tocountries that have developed transparency, accountability, and a poverty reduction strategy. To date, 23 of the 27 countries under the HIPC initiative are African.
The US Millennium Challenge Account - which disburses aid to recipient countries on the basis of their good governance, health and education initiatives, and free market economic policies - is a step in the right direction.
Ultimately the only real security against corruption is if Africans make their leaders accountable and demand transparency. The international community has an obligation to help eradicate poverty, but the international community also has the right and the obligation to demand accountability and transparency as well. Donors should work more closely with each other to ensure that African governments that turn a blind eye to corruption get cut off from foreign aid.
Kudos, not criticism, should go to Edward Clay for having the courage to speak bluntly against corruption in Africa.
• Susan Dicklitch is associate professor of government at Franklin & Marshall College and has conducted research in Uganda, Cameroon, and Ghana. She wrote 'The Elusive Promise of NGOs in Africa: Lessons from Uganda.'