Economic consequences of bribery, corruption

More than 50 years ago, Prime Minister of Eastern Nigeria Dr Nnandi Azikiwe was quoted by newspapers as saying that in Nigeria corruption had beaten world records. But then he himself soon after found himself at the centre of controversy. His minister of Finance Mbonu Ojike resigned and accused him of corruption in that he had directed the transfer of government accounts with a British bank in Nigeria to the African Continental Bank in which he had controlling interests.

It was this event that forced the great leader into resignation but was soon reelected to office, later to become Nigeria’s first ceremonial head of State.

As more and more revelations about Cashgate scandals are being made, one feels that in Malawi too corruption has beaten continental if not world records. Such records compounded with a world record in poverty make Malawi an earthly hell. Yet this is the only country we have. While a few of us may quit it, go elsewhere and acquire foreign citizenships we cannot all do this.

Bribery and corruption is ubiquitous in time and space. I have in front of me a copy of The Economist dated March 2 2002 whose leaders’ page reads: “In recent years, the West has sent its face firmly against bribery. This ancient and universal practice has been condemned as a worm that gnaws at the fruits of economic endeavour.”

Bribery and corruption like prostitution is a vice that has proved difficult to eradicate anywhere in the world, yet these vices are less in some countries than in others. Is there an argument for letting them prevail? But while prostitution seldom hurts third parties, corruption does so on a grand scale and needs to be combated relentlessly.

Bribery and corruption take a variety of forms and those forms enforce each other. Contracts and trading licences are fertile channels of bribery and corruption. Some companies make generous payments to political parties in anticipation of preferential treatment in the award of contracts or licences. Time and time again we have read in the media that a particular person or firm was awarded a contract to provide services without clearing the bid with the official body that deals with procurements. Briefly, we have read one side saying it went through the necessary processes, another side denying it ever granted the waivers. Nothing follows after. Apparently someone above the law has calmed the storms.

Some bribes masquerade as gifts. A minister’s daughter is having a wedding; the minster is in charge of awarding contracts to suppliers of goods. A man who wants to supply the goods presents the daughter with a precious gift such as diamond necklace or offers to serve wedding guests with free meals. After that this person submits a bid for the supply of goods to a government institution.

It is difficult for some ministers to ignore the special relationship with the man who met the wedding expenses. What was given was in the form of gift, but it served as an inducement to award the contract to this bidder.

Who starts the bribing process? Sometimes an official will say I will recommend your bid provided you give me 10 percent of what the ministry pays you. In many cases in Africa, it is foreign companies that start this process. They have heard that corruption is rampant in Africa. They come equipped with gifts to those in charge of granting licences or awarding contracts. To avoid suspicion, the bribe may be given as a gift to the wife or son.

Corruption in any form hurts an economy. Those who are awarded licences or contracts are often not the best for the service. The public receives second rate service because someone did not get the business on merit.

Where corruption is in the form of nepotism in public services, a network of cronies is created which perpetuates itself. Its members protect each other to the detriment of society.

The Cashgate scandal was uncovered by chance not by prior investigation by law and order enforcement officials. Through court proceedings we have learned of senior and junior officials, male and female erecting magnificent buildings in city centres. Are we to assume that those concerned with fighting white collar crime and corruption were not aware of what was going on?

The civil service since British rule has been known to assure lifetime source of livelihoods through pensions. It has not been known as a breeder of millionaires. Therefore, when a civil servant owns properties worth millions of kwacha, someone ought to sound an alarm. Such a bell cannot be sounded where there is a network of those who received their appointments or promotions dubiously.

Though bribery and corruption cannot be completely eradicated, it can be reduced. Those countries where corruption is minimal, people in high places have led by example. Because they themselves are honest they have not tolerated corruption in others.

Way back in 2001 or 2002, I read in a respectable British magazine that a court in Lesotho had sentenced a corrupt official to 50 years imprisonment. Obviously this was a life sentence; I would not recommend such a sentence here.

But for the future, I think the penal code in Malawi should provide for stiffer sentences for scandals such as Cashgate. Such crimes have cost the country donor economic support.

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  • mwamadi

    This is a very good piece. Can someone pass it on to the PSs, president, ministers and all those handle bids.