Aid to Africa

Africa in Fact: dirty dealing

The September 2014 issue of the monthly current affairs magazine, Africa in Fact, offers a dramatic snapshot of the all-embracing and, at times, astonishing ways in which the cancer of corruption impacts societies, diverting resources from much-needed public services, ranging from health care to national defence, into private pockets.

What are the costs of corruption? What aren’t the costs of corruption? That’s the theme of this month’s Africa in Fact issue, “Dirty Dealing,” published by Good Governance Africa (GGA) – an African-based research and advocacy organization that works to improve government performance on the continent.

African rulers – helped by foreign business and the multinationals who bankroll them – are largely to blame for the staggering loss of up to $419 billion to illicit financial flows between 2002 and 2011, writes GGA CEO John Endres for the introduction of this month’s issue:

“While the rulers become fabulously wealthy, ordinary citizens sink further into poverty and their human rights are trampled underfoot,” he says.

Go directly to the September 2014 issue of Africa in Fact: Dirty Dealing here.

Go directly to the September 2014 issue of Africa in Fact: Dirty Dealing here.

Along with jeopardizing the safety of public services, corruption serves in effect as an additional tax on everyday goods and services. Corruption also discourages serious investors, discriminates against the poor and the honest, perverts foreign aid and the rule of law, impedes economic development, erodes the trust of citizens in public officials and institutions (including judicial systems and the police) and undermines those institutions. It both diminishes political legitimacy and feeds political instability, and can even encourage terrorism and threaten a country’s security: its reach and its rot is exhaustive throughout societies affected by massive corruption as many of the countries that feature in this month’s Africa in Fact are.

But the lesson of Guinea – rich in untapped iron-ore deposits and lucrative bauxite reserves – and the government of Guinea’s revamp of the country’s mining code – the rules and regulations governing the operations of foreign mining companies – proves that “corruption is not an irreversible force”.

The implementation of  a new mining code by the Alpha Condé administration (Guinea’s incoming government at the time) brought about an increase in government royalties from natural resources and a decrease in taxes, required the government to publish all mining contracts and companies to sign a code of conduct (which committed them to abstain from corrupt practices), and obliged them to provide employment and training for Guineans. In return, investors gained more certainty about their projects and clarity on how to enforce and interpret the sector’s new regulations.

“The big lesson for other African countries,” says Thomas Lassourd, an economic analyst at the New York-based, George Soros-funded Natural Resource Governance Institute (NRGI), “is that with the right political will, you can find the expertise that you need to help you do a thorough review of the extractive sector in order to reach your goals and get a better deal out of your resources. The way to do this is not by bullying companies. It’s generally by improving the business environment through a higher standard of governance, because then you make it easier for serious investors to do business, and these are the ones more likely to give you a better deal.”

As many of Africa in Fact‘s stories make clear, improved governance and governments that are accountable to their people, citizen participation in keeping their governments to account and public education to help turn the tide against pervasive corruption are key. Ultimately, the rule of law stands as the most effective weapon in the war on graft. Tough, clear laws and the enforcement of those laws, without fear or favour, delivering consequences that hurt – the loss of liberty, professional licences and money. But without self-reliance and incentive, progress in this regard remains a constant challenge.

Probe International, in our extensive analysis of corruption and, in particular, foreign aid, has found that foreign aid has served as an obstacle toward that end, instead helping to maintain the status quo in regions rife with corruption that benefit from large amounts of aid infusions. Increasingly, studies show the failure of foreign aid to help turn around countries racked by political instability, impoverishment and endemic corruption and aid’s role in propping up despotic governments and some of the most corrupt countries in the world. The unaccountable spending that aid permits fails to enrich the lives of citizens or to entrench just laws that would allow the citizenry to create the wealth to enrich themselves. Because aid is anonymous, it removes the need for governments to make themselves accountable to their people, permitting the financing of vanity projects and the perversion of public funds for private gain.

This month’s issue of Africa in Fact provides one snapshot after another of the chaos that ensues from corruption and the need for action, both within Africa and without, to make those who gain from graft pay. Writes John Endres of Good Governance Africa:

“Considering how corruption strangles economic growth, undermines democracy, hollows out the rule of law and perpetuates poverty, it is clearly worth fighting. Winning it depends on holding to account those who benefit: African leaders and their cronies as well as the multinationals who bankroll them.

The more partners join the fight, the more likely the battle against graft will succeed. Legislation to be adopted could be modelled on the UK Bribery Act and the US Foreign Corrupt Practices Act. Africa would be more equitable and prosperous if the billions of dollars spent on bribes had been used for productive purposes.”

For a capsulization of Probe International’s work and findings on stopping Canadian corporate corruption abroad – an overview that applies to the menace of corruption in general and eliminating it – see here. Please note: this information package is presented as part of a fund-raising campaign and has yet to be transferred over to our website.

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