Corruption: The numbers add up, but who's counting?

By Jacqueline Musiitwa, Brian Shea 14 December 2015

People form a human chain to protest corruption at Marina Beach in Chennai, India. The World Economic Forum estimates corruption accounts for 5 percent of the world’s GDP with losses reaching $20 billion to $40 billion in developing countries alone. Photo by: Kannan B / CC BY-NC-ND

Corruption continues to make headlines with stories ranging from ever-expanding FIFA indictments, to British American Tobacco’s bribery of African officials, to the Petrobras saga that has led to the impeachment proceedings of Brazilian President Dilma Rousseff. And sadly, this list of seemingly isolated incidents could go on.

The World Economic Forum estimates corruption accounts for 5 percent of the world’s gross domestic product with losses reaching $20 billion to $40 billion in developing countries alone. Each year, International Anti-Corruption Day presents an opportunity to reflect on the current state of corruption and examine factors that both contribute to and detract from economic growth.

Although corruption is a global phenomenon found in all types of societies, it is one that is particularly corrosive in countries with weak government institutions. Sub-Saharan African economies are projected to grow at an average of 5.4 percent despite external constraints like China’s fluctuating commodity prices, and the continent’s internal challenges (i.e., weak infrastructure, political instability, and poor regulatory frameworks) which could arguably be mitigated with the reduction of corruption. In this regard, many have commented, “Corruption is just a symptom, not the disease,” and to combat it and foster economic development, institutional strengthening is key.

The democratic collapse of South Sudan serves as a perfect example. In 2014, the Economist Intelligence Unit ranked it among the top five fastest growing economies. But since then we’ve seen the devastating effects of poor governance. This year, Bloomberg projects Nigeria and Kenya to be among the fastest growing economies in the region, even while their citizens quietly lament the debilitating impact of corruption on their daily lives. These examples make it clear that a nation’s well-being cannot be measured by economic indicators alone.

Let’s be clear, what exactly is corruption?

According to a report from the Organization for Economic Cooperation and Development, “Corruption is the abuse of public or private office for personal gain. It includes acts of bribery, embezzlement, nepotism or state capture. It is often associated with and reinforced by other illegal practices, such as bid rigging, fraud or money laundering.”  

Amounts range from small change to sums large enough to rid the public of desperately needed infrastructure. Although commonly used in reference to government officials such as police and elected representatives, corruption should often be seen as a collective action problem that also permeates business, traditional and religious settings. So the perception of political elites as sole benefactors is incorrect. In fact, it can be argued that “tenderpreneurship,” a term popularized in South Africa for entrepreneurs that use political connections to circumvent government procurement processes to get contracts, has become one of the fastest growing industries in nascent democracies.

Recent findings from Transparency International indicate that over the past year, approximately 75 million people paid bribes in sub-Saharan Africa. Those at the bottom of the wealth spectrum are twice as likely to have paid a bribe, a number that increases in urban locations, particularly in areas with populations who lack basic services. High levels of corruption dramatically undermine public confidence, weaken government institutions, and reduce foreign and domestic investment making them all the more vulnerable to prolonged conflict and security risks.

And history shows that unaddressed local injustices can eventually spillover into transnational conflict. Fragile states such as Afghanistan, Iraq, South Sudan, Somalia and Syria all serve as examples of how corruption further erodes stability and negatively impacts surrounding countries.

Recognizing the significance of the problem, 178 parties have ratified the United Nations Convention Against Corruption since its inception in 2003. Yet over a decade later, these concerns persist.

What is most worrying is that many countries already have anti-corruption bodies, as well as international and domestic laws in place. Furthermore, many critics remark that the international community’s inability to follow its own Do No Harm principles has a destabilizing effect on local economies, and thus, allows rent-seeking countries to squander aid resources with little recourse.

What can be done? It will take more than a prayer.

During his much-celebrated visit to the continent, Pope Francis gave this cautionary blessing to the people of Kenya: “Each time when we accept a bribe and we put it in our pockets, we destroy our hearts. We destroy our personalities, and we destroy our country. Please, don't develop that taste for that sugar which is called corruption.” As millions reflect on the Pope’s remarks, they ask, “What can the average citizen do?”

At first glance, the answer seems easy: refuse to pay bribes and report it to authorities.  And though fears of retribution are realistic, many are starting to raise their voices to influence government officials to improve transparency through campaigns like #‎KnockOutCorruption. In this regard, there is power in numbers and more locally driven campaigns are needed for countries and citizens to learn what works based on their context.

So, if it’s so plausible, why has it not been done? Unfortunately, the structure of graft is not one that can be easily overturned once ingrained. As professor Alex De Waal deftly characterized, the region is a political marketplace operating under a “system based on exchanging loyalty for money … where political business managers are more remote from ordinary people, and less amenable to sentiments such as community and humanity … the more a political entrepreneur can discard humane norms and instead adopt market-based calculus, the more likely he is to rise to the top and stay there.” It’s survival of the slyest and it is going to take time to uproot.

That said, several governments across the continent have taken action to increase government accountability and transparency, which has slowly increased public confidence and enabled more competitive private sectors.

Botswana, oft cited as one of the least corrupt countries in Africa, was recently lauded for its independent judiciary’s ability to ensure contract compliance.  It also has one of the highest GDPs on the continent, which dispels the common perception that countries with mineral wealth inevitably suffer from “Dutch disease.”

In addition, newly elected President of Tanzania, John Magufuli, has embarked on an aggressive approach to reform hoping to follow the recent success of neighboring Rwanda’s anti-corruption efforts.

For institutional reforms like these to last, though, governments must exhibit thorough discipline and be open to public scrutiny.  Without this level of mutual accountability, it is highly unlikely that change will occur and is more likely to create “a new layer of corruption and taxation” instead.

So, now what?

The facts are clear: corruption is pervasive, bad for growth, and can be addressed with dedicated local engagement. Now it’s up to each of us to ask ourselves: Are we willing to accept corruption as the status quo and suffer the consequences or will our shock and desire for a different future move us to act?

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About the authors

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Jacqueline Musiitwa

Jacqueline Musiitwa is an international lawyer and founder and managing partner of the Hoja Law Group, where she advises on corporate and governance matters. She has served as adviser to the director general of the World Trade Organization on trade policy as well as to the Rwandan Justice Ministry on investment, trade and infrastructure and private sector development. She has been an Archbishop Desmond Tutu Fellow, Mo Ibrahim Fellow, Aspen Institute New Voices Fellow and a Young Global Leader of the World Economic Forum.


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Brian Shea

Brian Shea is an expert in conflict resolution, institutional capacity building, and human resources management. He has extensive experience directing policy initiatives in countries such as Somalia, Kenya, Afghanistan, Cyprus, the Palestinian Territories, Israel, Northern Ireland, South Africa, Jamaica, and the United States. He holds a B.B.A in marketing and economics from Radford University and is completing a M.A. from the Fletcher School of Law and Diplomacy at Tufts University.


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