Windhoek
Existing perception-based measures as well as mixed indices of corruption are failing to provide a true reflection of corruption in Africa, according to Minister of Finance, Calle Schlettwein.
He says this is because the measurements focus on country rankings which only serve to name and shame, and the resultant assessments do not provide useful insight nor practical recommendations to adequately inform policy reforms.
“By focusing on individual perception, attitudes and judgement on the prevalence of corrupt acts, they do not present a reliable picture of the phenomenon in Africa. By being heavily underpinned by sample bias, they are ill-suited for cross-country comparisons over time,” said Schlettwein when he chaired and officially launched the Economic Commission for Africa’s report on measuring corruption during the inaugural African Development Week 2016 on Saturday in Addis Ababa, Ethiopia. The report is titled the African Governance Report IV (AGR-IV).
For illustrative purposes, Schlettwein pointed out different rankings for South Africa on various government related indices in 2013. That country was ranked second in Africa by the World Economic Forum’s Global Competitiveness Index and its Africa Competitiveness Report, but was ranked sixth, excluding North America, by the Heritage Foundation’s Economic Freedom Index, tenth by Transparency International’s Corruption Perceptions Index and fourth by the Ibrahim Index of African Governance of the Mo Ibrahim Foundation.
“These wide variations in rankings, depending on the governance-related index, convey different messages about South Africa, illustrating differences in methodology, analysis and ultimately conclusions about the governance situation of this particular country.
Governance indicators – inclusive of corruption – are influential because of their importance during decision-making for foreign policy engagement, investment and aid allocation, and country risk analysis. It is well known that powerful domestic and foreign private firms also engage in undue influence to shape state policies, laws and regulations for their own benefit. Sometimes, private entities make contributions to election campaigns, which may be legal but unduly undermine democracy.
“Moreover, favouring particular firms in the awarding of public procurement bids and contracts remains widespread. Equally, many corrupt practices taking place on the continent are generated and facilitated by non-African players. The recent Report of the High Level Panel on Illicit Financial Flows from Africa, chaired by former President Thabo Mbeki, highlights the scope of the problem, providing ample evidence on how and why the operations of foreign players on the continent are causing significant illicit financial outflows,” said Schlettwein.
He added that prevailing measurements ignore and fail to account for the role and effect of international actors on magnitude and effects. Schlettwein therefore feels corruption must be viewed as a broader phenomenon where private agents, both domestic and international, share responsibility, while maintaining a keen eye on unethical acts, which may not necessarily be illegal or located within the public sector, but whose effects adversely affect the ordinary man.
Schlettwein added that rampant corruption hinders Africa’s structural transformation, increases the cost of doing business and perpetuates inequalities. This is especially so in situations where there are also weak institutions and poor governance frameworks that can be exploited by both national and international actors.
“Corruption does not ‘grease the wheels’ of economic activity and the provision of services. It is therefore not an optimal solution to bureaucratic red tape. Rather, it ‘sands the wheels’, increasing the cost of doing business and perpetuating inequalities as mostly a select few benefit from corrupt acts … Corruption is a major cost and impediment to structural transformation and sustainable development in Africa as it challenges economic governance,” said Schlettwein in the Ethiopian capital on Saturday.
The AGR-IV focuses on the importance of accurately measuring corruption, while it enhances and reemphasises an understanding of the international dimension of corrupt acts and practices, as well as highlights the compounding implications for fostering Africa’s structural transformation in a globalised world.
In a related matter and as part of the ninth Joint Annual Meetings of the African Union Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration and the ECA Conference of African Ministers of Finance, Planning and Economic Development, Schlettwein is scheduled to participate in the Round Table 2 on the subject “Integration of the results framework, monitoring and evaluation.” The meeting will take place today.