Africa

Ban corrupt firms, urges Manuel

Quentin Wray
Business Report
June 4, 2004

Maputo: Companies that pay bribes to African officials should be “named and shamed,” and banned from participating in further contracts on the continent, finance minister Trevor Manuel has urged.

Speaking on the second day of the Africa summit of the World Economic Forum (WEF), Manuel told delegates yesterday that “the corrupters” needed to be hit as hard as those who accepted the bribes.

He said it was imperative that the public and private sectors “campaign on this together” and ensure that corrupt firms were forced to move aside for companies that “have conducted themselves impeccably and have done no wrong”.

Manuel said South Africa and Lesotho were working together to get companies that paid bribes in the multibillion-rand Lesotho Highlands Dam project blacklisted by organisations like the World Bank, but this was taking a very long time.

Closer to home, he said the SA Revenue Service had done more to combat corruption within its ranks than “any other agency in the world”, convicting 27 people in 2002 alone.

Manuel’s comments followed a confession by civil engineering firm Aveng’s chief executive, Carl Grim, that his company had had to make payments to officials to get essential spares into countries where plants had broken down.

Grim said he could tell “horror stories” about the difficulties faced in getting spares through borders, and payments created leakage that both raised the costs of doing business and discouraged foreign direct investment.

Grim told the gathering that while senior politicians and officials had committed themselves to transparency and fighting corruption, something needed to be done to fight it at “lower levels”.

Manuel said the low salaries paid to officials in many countries were not enough for them to live on, meaning that they were forced to rely on “baksheesh” to survive.

Neil Cumming, the managing director of packaging company Nampak, which operates in 10 African countries, said there were three things about investing in Africa: it was “not for sissies”, companies needed to respect the countries that they operated in and they had to take a hard line against corruption.

“If you invest in Africa you must run your company the same way you would run it at home,” he said, adding that this would give a marketing advantage down the road. “You will become known as a company that does things correctly,” he said.

Corruption did not only involve companies making payments to government officials but also included clinging to power or appointing relatives to high positions.

In an oblique reference to Zimbabwe – “an eyesore not too far from where we are now” – Linah Mohohlo, the governor of the Bank of Botswana, said “we need to apply pressure so that the leadership begins to lead by example”, allowing Africa to take her “rightful place in the globe”.

Corruption was highlighted as a key issue in the Africa Competitiveness Report, released this week by the WEF, and Xavier Sala-i-Martin, a professor of economics at Columbia University in the US and one of the report’s co-authors, said that ensuring property rights and the rule of law were important to boost the continent’s competitiveness.

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