News and Events > Meetings > Policy Forum > 1997 Policy Forum Meeting  

Maputo, Mozambique, November 1-2, 1997
Corruption and Development in Africa

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Corruption and Development in Africa

Co-Chairpersons' Closing Statement

This statement reflects the conclusions of the Co-Chairpersons and draws attention to some of the issues which have been debated during the course of the Policy Forum. An expanded report of the meeting will be sent later.

We have been very impressed by the frankness and depth of analysis by participants of the scope and impact of corruption. Only a few years ago, it would have been impossible to discuss corruption in the open manner in which it has been discussed here.

Corruption is a worldwide phenomenon, and how it manifests itself differs from country to country. We feel that the meeting has led to a greater understanding of the problem of corruption in African countries, as well as of the devastating effect it has on their development.

It is clear that corruption in many African countries is a complex issue which requires that a range of actions be taken. It is equally clear that corruption in Africa -- as elsewhere -- is not merely a domestic issue. International business transactions are a source of corrupt practices. It also appears that in some instances rent-seeking and corruption have spread into development assistance programs.

It is obvious from our discussions that African countries cannot bear the costs of corruption. Corruption damages the political, social and economic systems of countries. It erodes the legitimacy of governments, undermines the effective functioning of institutions, and limits the ability of people to get ahead as the result of their own efforts.

Ordinary people, and especially the poor, are the primary victims of corruption. In most African countries, petty corruption is widespread, but grand corruption is perhaps more damaging because of the amount of resources involved.

In considering the causes and scope of the problem during the meeting, it became clear that although corruption may be motivated by poverty, it is more often due to greed. We also recognized that income inequalities exacerbate the problem. We noted that domestic corruption often involves the use of discretionary powers to award lucrative licenses and concessions to family, friends and political associates. Furthermore, bribery and extortion in public procurement, tendering and contracting exist at the national, as well as the international, level.

Our discussions highlighted that in African countries people often enter the public service because they can obtain preferential access or engage in rent seeking. We also recognized that complicated revenue collection and administrative mechanisms, highly discretionary authority, and off-budget expenditures and revenues which are not accounted for, lend themselves to corruption. Ghost workers and even ghost departments are one manifestation of this.

We noted that domestic corruption can encompass the diversion and also the actual looting of public funds by senior government officials and politicians. Corruption at this level encourages imitation at lower levels, leading to widespread petty corruption. Participants also commented on the growing incidences of corruption in the private sector.

It was clear from our discussions that attention has to be given to both those who corrupt and those who are corrupted if corruption is to be effectively addressed.

At the international level, bribery in business transactions is a major concern, and the international business community has to become a partner in the fight against corruption. There is also need for action regarding development assistance, as aid-funded procurement, tied-aid and provision of technical assistance have facilitated rent seeking, and reduced the effective use of development assistance funds.

In our discussions we noted the connection between corruption and capital flight, in that much of the money gained as a result of corrupt practices finds its way into financial safe havens in developed countries. The laws and regulations governing the international banking system make it difficult to trace or recover such money.

During the meeting, we heard some of the efforts which are being made both by African countries themselves and at the international level to address corruption. However, there is no cause for complacency. Indeed, our discussions here have stressed that action is needed urgently. Throughout this meeting, the point that has been made repeatedly is that corruption has to be addressed consistently and with vigilance, by governments, by civil society, by the business sector, and by the international community.

Combating corruption requires political will and commitment. Above all, the highest level African leadership must set an unambiguous example of transparency and responsibility in the use of public resources. It also requires a broad coalition of government, civil society, and the business sector.

At the national level, a professional and free press is essential. Civil society organizations also have an important role to play in building public awareness of the costs and consequences of corruption. The institutions of the state -- the parliament, the civil service and the judiciary also have to be strengthened to provide checks and balances against corruption.

However, unless there is an enabling environment of transparency and accountability, specific anti-corruption efforts will not be successful. Some fundamentals, such as an effective legal system and adherence to the rule of law, have to be put in place.

Continued implementation of economic reforms will, over time, reduce the distortions, excessive regulations and administrative discretion which facilitate rent seeking. Governance improvements will limit the opportunities for corruption and promote the transparency and accountability which bring it to light. A climate of free and open competition will make it harder to engage in corrupt practices, and also facilitate their detection.

Our discussions have also emphasized the importance of capacity building at all levels if corruption is to be curbed. The importance of regional and sub-regional efforts to combat corruption, including legal reciprocal agreements, was also emphasized.

At the international level, specific action to limit corruption in public procurement could have significant impact. We discussed an initiative involving a number of African countries to address corruption in international procurement. Among other things, this would:

introduce anti-bribery clauses in public procurement contracts;
require that chief executive officers of companies bidding on such contracts undertake not to pay bribes, and sanction those employees found guilty of corruption;
require that the leadership of African countries implement strong punitive measures against those found guilty of taking or soliciting bribes; and
require that donors funding such procurement also impose stringent penalties against companies found guilty of corrupt practices.

Similar measures could also be applied to contracts resulting from the privatization of state enterprises and from the development of natural resources.

In the meeting there was also reference to the OECD convention which will criminalize transnational bribery and end the tax deductibility of such bribes. We urge all OECD countries to ratify this convention. We also urge all OECD countries to implement the DAC guidelines governing procurement using development assistance funds.

There is also need to erect barriers against the illicit transfer of funds gained as a result of corrupt practices to western financial institutions. Current international provisions to counter money laundering should be strengthened and expanded. Pressure should also be brought to bear on the international banking system for more effective cooperation with countries seeking to recover funds gained as a result of corruption.

During the meeting, we agreed that there is a reasonable degree of analysis of corruption, and even consensus as to what should be done. There is now need for effective action.

Sharply focused anti-corruption campaigns are required in many, if not most, African countries. Obviously, such campaigns, if they are to be successful, have to be tailored to the needs of each country. But all successful anti-corruption campaigns will have certain elements in common. These include:

direct and forceful support of the highest political leadership; -
mechanisms to ensure transparency and accountability in all governmental operations, especially financial transactions;
support for a free press to forcefully bring the costs and consequences of corruption to public attention;
introduction of independent watchdog bodies such as anti-corruption bureaus, auditors general and ombudsmen;
reduction and simplification of government regulations, particularly those involving the issuance of licenses and permits;
addressing corruption in major procurement actions with the help of the international financial institutions and bilateral donors.

For its part, the international community should:

move quickly to criminalize bribery in international business transactions, and end tax deductibility of bribes;
rapidly ratify the OECD anti-corruption agreements, and implement necessary anti-corruption legislation;
refrain from treating corrupt practices as part of normal business activity, end subsidies and implement sanctions, including blacklisting, against companies found guilty of corrupt practices; and
provide support to African countries to build capacity and establish systems for combating corrupt practices.

Above all, effective enforcement of such actions by African and donor countries is crucial. No-one should be seen as above the law, or safe from prosecution in cases of corruption.

In conclusion, it would most definitely appear that the time is right for a concerted international effort to put measures in place which prevent and combat corruption. This meeting has demonstrated that the commitment is there. We all have to ensure that this translates into action and that discernible progress is made. We owe it to the people of African countries who are the ones who suffer from the damaging effects of corruption.


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