Corruption and collusion: lessons from Africa

By Elaine Porteous

Corruption is not unique to Africa, nor is it a new problem. However, Africa is perceived as the most corrupt region in the world as well as the most under-developed. Corruption is a complex social, political and economic phenomenon that slows economic development and contributes to governmental instability. There is no simple solution. There have been numerous academic studies and notable interventions by such institutions as the World Bank, the United Nations and the Norwegian Government, but progress remains agonisingly slow.

Economic development in Africa has been limited by the low level of foreign cash flow from businesses and the donor community. Investors are nervous and risk-averse; they have other, more attractive, options. Developed countries that support African countries through charitable donations and infrastructure projects are selective about what and where to fund. All of this contributes to slow growth, weak governance and continuing poverty.

Visible types of corruption
Bribes and non-monetary incentives are commonly offered to, or requested by, public officials in exchange for favouring suppliers. This can present itself in many ways: excluding potential suppliers from bidding, fixing evaluation criteria to suit preferences, splitting contracts and receiving gifts (material goods, cash or holidays). It can also include 'auto-corruption', where public officials award themselves or their family a supply contract, or seize land or ownership of assets.

Who is watching?
Transparency International (TI), the global watchdog, has coined the phrase 'grand corruption', meaning the abuse of high-level power that benefits the few at the expense of the many, causing serious and widespread harm to individuals and the society at large. According to TI, the 2018 Corruption Perceptions Index points to a more hopeful future for Africa. The transformations in Rwanda and Cabo Verde show that corruption is manageable with well-sustained effort. Long-term anti-corruption investments in countries, such as Cote d'Ivoire and Senegal, are also steadily paying off. Conversely, tackling corruption remains a mammoth task for countries at the bottom of the index, for example, South Sudan and Somalia.

Who is benefitting?
Some of the richest billionaires in Africa are public servants. But, how can that be so? When Sani Abacha, the former President of Nigeria, passed away, he was estimated to be worth $20-billion. In the Congo, Joseph Kabila and his family are among the richest people on the continent, owing their wealth to diamond mining. Uhuru Kenyatta, the President of Kenya and son of Jomo Kenyatta, was on the Forbes list of the richest men in Africa. When TI took a vote on the most corrupt people on the planet, Isabel dos Santos from Angola made the top ten.

The big spend
While bribery and corruption are not unknown in the private sector, the big numbers at risk are in the public sector. The infrastructure sector (roads, rail, sewage, water and government building projects, such as schools and hospitals) is more vulnerable to corruption than other economic sectors because of the large sums of public money involved. Because corruption discourages foreign investment in projects, the quality of public service delivery is affected.

According to TI, specific features which are unique to infrastructure make the sector more susceptible to corruption. These include the huge size of projects, direct control by government, the complexity of projects, multiple contractual links as well as a deep-seated culture of secrecy. Projects in other sectors, especially extractive industries such as oil, gas and mining, are highly attractive to corrupt players because of the enormous sums of money involved. Collusion and price-fixing within cartels are also rife.

Recent news
Ghana recently partnered with the Government of Switzerland to develop sustainable public procurement policies and practices. Ghana has been an active member of international procurement networks, such as the World Bank Advisory Committee on Procurement Reforms.

Rampant corruption and fraud in the public and private sectors have plagued South Africa for the last five to ten years. The country has suffered from 'state capture', where bribery and corruption infiltrated all levels of government. Our new President, Cyril Ramaphosa, declared that 2018 would be the year in which South Africa would turn the tide of corruption in its public institutions. TI's latest corruption ranking puts South Africa at #71 out of 180 countries.

In Rwanda, the Office of the Ombudsman publishes a list of public officials charged with and sentenced over corruption, including procurement-related offences. Since 2014, this list has featured some top government officials, including a former permanent secretary for soliciting money from a businessman for tenders.

What can be done?
The United Nations Economic Commission for Africa (UNECA) proposes key procurement practices that could be replicated in the procurement systems of African countries. These include:
- De-centralise procurement closer to where the goods and services are required. This allows for better monitoring of delivery as well as satisfying end-users. Decentralisation reduces the incentives for corruption.
- Promote healthy competition through the outsourcing of projects, which, in turn, will promote efficiency, flexibility and cost savings. This is a more cost-effective approach than in-house projects.
- Use information technology (IT) tools to address corruption within public procurement. Computer software solutions are progressively helping to improve procurement processing and track consignments.

"The ability to identify procurement fraud is enhanced with technology-enabled solutions that are useful towards the crackdown in both public and private business", says Rudi Kruger, General Manager: Risk Management, LexisNexis Data Services. "A number of developments in IT make it easier to identify non-compliant state employees, highlight potentially fraudulent activity and can be used to help streamline the process of bringing perpetrators to book."

The verdict
According to UNECA, although there has been some significant progress in creating a legal and institutional framework for public procurement, cultures and behaviours towards procurement have not yet changed significantly enough to make a major difference. Law enforcement continues to be lax and those responsible for managing and administering procurement lack accountability. Others suggest that Africa needs to strengthen democratic institutions in order to ensure governmental accountability and transparency. An open review of public-sector salaries and a free media, which creates awareness around wrongdoing (for example, Corruption Watch in South Africa), are additional steps that can be taken. It has, furthermore, been suggested that ethics training should be compulsory for our political leaders.

But, can ethics be learnt?

This article first appeared in Procurious.com, the leading online procurement platform

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