Time to crack down on private sector corruption.

Author:Collins, Tom
Position:Business
 
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Corporate corruption does great damage to businesses and economies across Africa, but few cases are ever brought before a judge. Tom Collins investigates the problem and what can be done to solve it

In an address to the African Union last year, Vera Songwe, executive secretary of the United Nations Economic Commission for Africa (UNECA), put the annual figure lost through corruption in Africa at $148bn: around 25% of average GDP across the continent.

For many citizens in Africa and elsewhere, a stereotypical image of corruption is that of a politician on the make siphoning off public sector money. Private enterprise is often overlooked as a sector in which graft may rival its public counterpart. The confidential nature of most business dealings makes it hard to detect corporate corruption, much less prosecute it. Yet bribery, project overpricing, shell companies and nepotism dog the continent's private sector, eroding profits and efficiencies at even the best-run companies.

This issue was recently brought sensationally to light on primetime Kenyan television when two giants of East Africa's private sector expressed frank views on the topic.

"Today what the focus should be is on the private sector," insisted Joshua Oigara, CEO of Kenya Commercial Bank (KCB), the country's biggest lender by assets. "There is always a giver and taker and until today we haven't seen a challenge or prosecution with private sector individuals."

Bob Collymore, Oigara's peer and CEO of Safaricom, went one step further. "Not a single private sector corruption case is incoming. Are you saying the private sector are not bribing? Of course they are."

The leaders then revealed that between them they had fired around 90 employees last year as a result of alleged corruption.

Economic harm

Speaking to African Business, Mark Pyman, founder of Transparency International's Defence and Security Programme and a leading independent adviser to the UK government on the management of major contracts, argues that the effect of corporate corruption on the vitality of the private sector can be crippling.

"It's a major issue and it shows no sign of going away just yet," he says. "In almost every sector, with few exceptions, you will find that the scale of corruption is at a minimum 10% of the sector's GDP. In many countries it can easily halve the growth rates of the particular industries or in the case of things like the extractive industries it can be crippling to them."

A 2017 study...

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