Everyone knows that corruption has a corrosive effect on society. The annual Commonwealth Business Council (CBC) survey of business leaders put corruption and the lack of transparent and predictable regulations for business as a major reform target for countries wanting to increase investment flows.

Public administration and economic management needs to simplify the administrative and regulatory environment to reduce corruption. To do this, however, the main economic players – government and business – need to co-operate to find workable solutions, but in most parts of Africa, real dialogue between government and business is still in its infancy.

Advertisement

Joint programme

In 2001, President Festus Mogae of Botswana invited CBC to pilot the joint business-government programme on corruption that had been endorsed by Commonwealth heads of government.

The CBC approach draws on its comparative advantage – a membership of some 150 private companies and 4000 small and medium-sized enterprise (SME) associates, and good relationships with governments.

The programme began in late 2001 in Botswana with funding from the UK’s Department for International Development (DFID), and it led to the establishment of a joint government-private sector working group on corruption involving the Botswana business community and the Directorate of Corruption and Economic Crime (DCEC).

Extended reach

Since then, the programme has been extended to Malawi, Tanzania and Zambia, and is being implemented jointly by CBC and the Southern African Forum Against Corruption (SAFAC). SAFAC is the implementing body for the South African Development Committee Protocol Against Corruption and includes 12 national anti-corruption agencies, as well as civil society participation.

Advertisement

To keep up the momentum of the initiative Sir Phil Watts, chairman of Shell, and Sir Mark Moody Stuart, chairman of Anglo American, added their companies’ funding and their personal support. The private sector in each country, and the national anti-corruption agencies led the work on the ground.

Common problems

Although there are sharp variations in the scale of corruption in each of the four countries involved, the joint government-private sector reports identify common threads:

Administrative reform: Business, especially SMEs and micro-enterprises, suffer from widespread bribery with regard to contracts, getting paid, and licensing and permits.

The key solution that has been identified is to simplify procedures and make them more transparent. Cutting red tape is gaining ground as a key weapon in reducing the opportunities for corruption. This reform is also the key to tackling the petty corruption that afflicts poor people, who often pay 15% or more of their income obtaining the services in education, health and welfare that are theirs by right.

Procurement: The importance of overhauling the tender and procurement system could not be greater, given that the government is still the dominant economic player. Business, however, needs to move away from ad hoc criticism and help develop comprehensive proposals for reforming tender boards – boosting independent participation in the board, strengthening professional and technical participation, streamlining procedures and making them more transparent.

Government, though, complains that the private sector needs to be better organised and prepared to contribute to this reform – otherwise complaints can be dismissed as individual cases of sour grapes, rather than pointing to systemic weakness.

Leadership: The application of parliamentary and ministerial codes of conduct needs to be strengthened, and extended to cover senior public servants. And although large companies are aware of the principles of good corporate governance and may conduct internal campaigns, this is not true of most enterprises.

Education and consultation can extend to all companies’ and relevant professional bodies’ codes of conduct to promote integrity in business transactions. These codes should include effective verification and compliance mechanisms. The larger companies can help by passing on their extensive training capacity, which is often not shared outside the organisation.

Business and political corruption: A transparent approach to party funding is required – including mandatory legal disclosure of all contributions by business to parties. The almost universal lack of requirement on parties to disclose sources of funding has been proven to lead to funds-for-contracts, which distorts government purchases but, most importantly, undermines the democratic process.

Protecting whistleblowers and preventing harassment by regulatory bodies who may try to deter them: There is a need to provide a mechanism to protect “whistleblowers” to protect them from victimisation. The exposure of SMEs to this type of pressure is particularly worrying.

Forming a strategy

In December, the Zambian Business Forum (which groups all five national business federations) took its report and met to hammer out a strategy with the anti-corruption agency. The results will be relayed to the President and international investors when the country’s International Business Advisory Group, chaired by Commonwealth Development Corporation’s Lord Cairns, meets in March.

Bringing together business into better structures, and working co-operatively with government in this way is a habit that is relatively new in most of the region. But without a more professional voice and a larger ear on the part of government, the prospects for real change – as opposed to bolder rhetoric – are poor. The private sector needs to take more responsibility for advocacy, and professionalism in its policy work.

In Zambia, a joint government business structure and agreed national action plan on corruption are part of the process of maturation required to improve the overall business environment. These processes, mirrored in the other three countries that have implemented the programme, offer an important way forward, building capacity and working alliances across those bodies in a position to do something against corruption.

Leadership required

In the next year, the partners in each country plan to hold seminars and workshops for government and business leaders, and will produce specific policy recommendations for government on the problem issues. Progress will not be easy – corruption is deeply rooted and it will require leadership in all walks of life to raise the standards.

Leadership is perhaps the key to it all – without sacrifices and willingness to stand up and be counted, bad practice remains entrenched. But the mood in Africa is changing, and a new generation in both business and in government is looking for change.

Dr Mohan Kaul is chief executive officer at the Commonwealth Business Council

Find out more about