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Corruption – a worldwide occurrence, with Africa a major culprit

04 June 2008 PricewaterhouseCoopers

Bureaucratic corruption has many faces. In the political and administrative arena, it is evidenced through the misuse of office for private gain or by the deviation from official behaviour to pursue private interests, and it is in essence the illegitimate and unethical use of public office for personal and private gain.

John Klinogo, a past president of The Institute of Chartered Accountants in Ghana, addressing the PricewaterhouseCoopers African Conference on Economic Crime, May 28th to 30th, says corruption is featured by the qualities of being illegal, illegitimate, secretive and motivated by personal or political gain. Acts of corruption include bribery, extortion, kickbacks, undue influence, nepotism, favouritism, retainers, embezzlement and campaign contributions and can be found across society – in government, the private sector, NGOS, and international organisations.

Klinogo says that private companies, usually those trading outside of their home jurisdictions, can feel pressured to offer bribes in order to win major government or parastatal contracts. “Companies who pay bribes outside of their home country often feel these payments are more ‘legitimate’ so to speak, because everyone is doing it in that region. They themselves may even actively encourage the offering of bribes – seen as a ‘gift’ to the receiver - to secure large contracts.”

Public officials can be susceptible to corruption on different scales. In developing countries, underpaid lower level government employees are looking for small benefits that will pay children’s school fees and feed a family. Whereas corruption of higher officials, in both developing and developed regions, who control decision making on large contracts, takes place on a much grander scale.

Transparency International’s Global Corruption Barometer for 2006 reveals that the police services are those most frequently accepting bribes. Registry and permit departments come in second, and third place is taken by the legal system and the judiciary, which is most disconcerting considering this sector is responsible for effective law enforcement. Those in the medical, educational, utilities and tax revenue sectors are also no strangers to bribery.

With regard to demographics, the barometer shows bribery levels are highest in Africa. The experience of bribery in the EU and North America is relatively low. In Africa, close on 55% of respondents to the barometer survey indicated they paid bribes to the police, followed by 32% in South America. Most respondents believe their relevant government’s efforts in eradicating bribery and broader corruption is ineffective.

Taking a look at The Corruption Perception Index (CPI) – a measurement which ranks countries in terms of the degree to which corruption is perceived to exist among public officials and politicians – Finland, Iceland and New Zealand are equally ranked as the least corrupt countries. The UK ranked 11th and the bottom end contained several African countries such as Angola, Congo, Kenya, Nigeria, DRC, Cote d’Ivoire, Chad and Sudan – with Haiti perceived to be the most corrupt. South Africa was ranked position 51 out of 163.

Another measurement, The Bribe Payers Index (BPI) – a ranking of leading export countries regarding the occurrence of bribery when operating aboard – for 2006, shows Switzerland as the country with the lowest propensity to offer bribes or undocumented payments when trading abroad. India sits at the bottom of this list as the most likely to offer illegitimate benefits South Africa is poorly ranked at 24 out of 30. The fact that all countries in this index fell well short of a perfect score reveals a considerable propensity for companies of all nationalities to bribe when operating abroad.

Klinogo concludes that developing countries and especially the African continent should place the fighting of corruption high on their agendas. “Important tactics would include improving financial and operational systems throughout and paying officials decent remuneration levels as part of the efforts in curbing corruption.”

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