Why is Africa poor? - Corruption

According to the African Union, in excess of $140 billion is stolen from the African continent every year by it's leaders. This final essay will look in detail at corruption; understanding the definition, the causes and the severe consequences of this destructive practice.

What is corruption?

"Corruption, while being tied particularly to the act of bribery, is a general term covering the misuse of authority as a result of considerations of personal gain, which need not be monetary." David Bayley (1966: 720)

"Corruption is the diversion of public resources to nonpublic purposes." Herbert Werlin (1973: 73)

"Corruption is the outright theft, embezzlement of funds or other appropriation of state property, nepotism and the granting of favours to personal acquaintances, and the abuse of public authority and position to exact payments and privileges."(Harsch 1993: 33)

It is important to distinguish between political and bureaucratic corruption. While the latter involves efforts by civil servants to enrich themselves through illegal means, the former is used by political parties to win elections or take control of the state. Political corruption usually includes activities such as vote-rigging, registration of unqualified, dead, or non-existent voters, purchase and sale of votes, and the falsification of election results (Goodman 1990). Political corruption is not defined by the opening quotes above, nor is it the focus of this essay. Instead we will focus on bureaucratic corruption.

Corruption is measured by Transparency international who produce the ‘Corruption Perceptions Index’ which attempts to measure the level of corruption in all nations across the world. The diagram below shows the extent and severity of the problem faced by the African continent.

Corruption Perceptions Index 2010 Results, http://www.transparency.org

  

    


Why is Sub-Saharian Africa so corrupt?

Alam (1989) and Bayley (1966) see corruption in developing countries as arising from the clash or conflict between traditional values and the imported norms that accompany modernization and socio-political development.

David Apter (1963) explains that African civil servants may be obliged to share the proceeds of their public offices with their kinfolk. The African extended family places significant financial pressure on the civil servant, forcing him to engage in corrupt and nepotic practices. Bureaucrats are believed to exploit their public positions to generate benefits for themselves, their families, and their ethnic or social cleavage.

Gould and Mukendi  (1989: 434) show that one potential causative factor of corruption is the "soft state" that is said to embody "a weak or diffuse sense of national interest and the absence of a commitment to public service."

Whatever the initial cause, once thoroughly embedded, corruption is almost impossible to remove. A good friend of ours has recently been approached by one of the two presidential electoral candidates for the upcoming election. He was asked to be a fundraiser for the party, focusing on his ethnic community. For a year’s work there would be no payment, just an understanding that debts would be paid should the candidate win the election. This was explained to us to mean the man’s business would be awarded overly-lucrative government contracts, and he would likely be employed somewhere within the civil service with nice salary, minimal work requirements and plenty of time of run his other affairs.

To win an election these types of promises must be made to hundreds if not thousands of people in order to run a successful campaign in the year preceding the public vote. To fail to do so would be to surrender to the opposition.  As a result, whichever party ends up taking power does so with a mountain of 'favours' owed, and an agenda for corruption even before their first day in power.

Why is corruption bad?

Corruption results in significant theft from the taxpayer.

When the minister for transport (say) has funding available for a new flyover and puts the contract out for tender the offers will come back from prospective project management firms. In this non-corrupt example the bids come in from $1 billion to $1.2 billion for the job, after which the civil service team examines the small print of each offer, weighs in the reputation of each bidder, and determines the best deal for the taxpayer.

To simplify a corrupt government, the minister lets it be known the contract will require a $200 million kickback for a bidder to be successful. The bidding firms are not going to take this hit, their profit margins have been carefully calculated, so the bids come in from $1.2 billion to $1.4 billion, and the civil servants proceed to check the bids as before. However this time there is a reasonable chance that the best project manager will not be selected, but a friend or family member of the minister will take the contract instead. As a result the final cost is higher, and the quality of the work completed lower, hurting the taxpayer twice over.

On a far smaller scale the traffic police here in Ghana are forever extracting bribes from drivers. Again this is to the detriment of the state. The police do not extract bribes from drivers obeying the law, they target un-roadworthy cars, or those breaking the speed limit. Legally a fine should be paid, however a ‘dash’ of just a few cedis and the police officer forgets about the offence and sends the driver on his way. The loser is not the driver, who gets off far more lightly than he should have. The loser, again, is the state which is deprived of funds, and consequently the taxpayer.

But theft is only one part of the problem. Corruption results in the collapse of otherwise viable businesses which cannot afford to pay off officials. It also results in the precipitation of inefficient business which survive because they have the right officials in their pocket.

Corruption encourages governments to pursue perverse economic policies, because control and enforcement of those policies results in the enrichment of those at the top.

Corruption is a killer of initiative and trust. It drives away foreign investment and undermines the development of the rule of law.

But most callously, corruption robs African children of a better future. Every penny that goes missing today is another step backwards in this desperately impoverished part of the world.

Corruption then, is the principal reason why Sub-Saharan Africa is poor. The scale of outright theft at the top defies belief. The results, at the bottom, are all too evident for anyone to see. Through the stealing of money, the perversion of the rule of law, the distortion of market forces and the suppression of creativity, the rulers of Africa today effect a severe injustice on their people’s tomorrow.

Corruption sits within a self reinforcing negative cycle, and one from which it is exceptionally difficult to escape. Only time will tell whether these fantastically vibrant and uplifting people will throw off the shackles imposed by the dishonesty of their leaders.

Why is Africa poor? - Health & Religion

This week’s essay looks at the separate areas of Health and Religion to understand their impact on the wealth of the Sub-Saharan region.

Health

The link between poverty and health is well understood from a number of Western studies. These studies have established that those with low incomes have a lower health status than those with higher incomes. The implicit implication is that low income causes lower health. However the question for this essay is the opposite: in Africa, does poor health result in less wealth.

There is no doubt that Sub-Saharan Africa shoulders more than it’s share of diseases. Malaria, HIV/AIDS, Tuberculosis and a host of childhood diseases contribute to leave the region with 25% of the global disease burden. The average life expectancy in 2006 was 46 years of age. It is estimated that AIDS alone slashes 20 years off the life expectancy of the average person.

With such a disease problem it would seem reasonable that the training of healthcare workers be a priority for the region. Unfortunately despite efforts to develop the skills of talented individuals, the high salaries on offer for healthcare workers in the west draws the majority of skilled talent out of Africa. The region shoulders 25% of the world’s disease burden with just 1.3% of it’s health workers.

So how specifically do the lower health levels impact wealth? The average number of sick days taken by a Japanese person is 5 per year, an American 6, and a Briton 10. The equivalent figures for the Sub-Saharan region are not published, but extrapolating our office records (sample of 13) the figure would be in excess of 12 days a year. This is despite staff coming to work with a 3” open wound in their leg from a fall that morning, or so sick with fever that by lunch time they are slumped in the corner and need driving home. In other words, when they stay at home they are really sick, often from Malaria. Once in your system Malaria can strike again at any time and will take you out with fever for 2-3 days. Increased sick days result in lower productivity.

The average life expectancy of 46 also has a significant impact on wealth. It is recognized that experience counts, the average age of a board member in the west is just under 60, and in theory at least these are the people adding the most value to a business. With a life expectancy so low, few individuals gain the lifetime of experience needed to make smart, strategic decisions at the top. Poor strategic decisions, made with a lack of prior experience result in inefficiencies, and lost income.

Finally the burden of care weighs heavily on the region’s people. From child birth complications and childhood diseases to the care of AIDS patients, it is rarely just the individual affected whose life is dominated by the disease. Mothers, family members and friends are all required to help, often at the expense of their employment, and their contribution to the generation of national wealth.

To conclude this section, a quote from the WHO Regional Director for Africa:

"The link between poverty and health is no longer in doubt. In the African context, the heavy burden of disease causes a significant loss of output which, in turn, accentuates the gap between the actual and potential economic growth in the region. Reducing the burden of disease, a noble goal in itself, will directly increase countries' potential to increase production and achieve the high growth rates that are so vital for poverty reduction."

Religion

For those hoping for a blazing row about the existence of a God, or which is the correct religion, you’re going to be disappointed. This section will look at the way religion in Sub-Saharan Africa impacts the lives of local people from an economic perspective.

There are three main religions in the sub-Saharan region. 45% of people are Christian, their beliefs brought here by missionaries from Europe. 40% are Islamic, a religion which arrived before Christianity from Northern Africa. 12% follow ‘traditional African beliefs’. Temporal studies of religion show Christianity and Islam rising in prevalence, with traditional beliefs phasing out. Very few people are atheist or agnostic.

Religion is the social backbone of all small communities in the region, and collates groups of likeminded people in the larger towns and cities. The extent to which attending church or the mosque is a critical part of life here cannot be underestimated; it is the social highlight of the week, aside from being a time to show thanks to God.

But it is not free. All devotees are expected to pay a monthly tithe, set at 10% of your salary. This is not optional and goes towards paying the pastors and the upkeep of buildings. Each week offerings are also requested as a collection is passed around. This is a personal gift with the amount donated left to the individual. ‘Church projects’ may also arise intermittently, raising funds for a specific cause or planned new development. In total the average earner is likely to contribute between 15 and 20% of their monthly income to Church.

This is not a trivial sum. If this average earner brings in $150 USD / month and $50 goes on accommodation, $50 on food and clothing for the individual and their dependants, then $50 remains for other items. The church will take $20-$30 of this remaining $50, half of the free money an individual has each month. But to put this into perspective, in the West we would spend half of our unallocated funds going out, seeing friends, and supporting the local community. Here it is the same, but presented differently.

Where religion does impact wealth generation is in death. Funerals here are expensive by local standards and attended by a whole community not just a few friends and family. They are also usually three days long, with guests required to attend between one and all three of the days. Acknowledging that the average couple will have somewhere between two and ten children, and that the average life expectancy is 46 this stacks up to a significant amount of time spent at funerals each year.

Following the funeral is a compulsory period of mourning. For Christians it is generally agreed that the spouse must stay away from the outside world at least until the body is buried. This may be 5 days if there is money in the family, or it may be many months if the burial duties cannot be paid. Ironically at this time the spouse is unable to work to bring an income. For the widows of Muslim men a 3 month period of mourning is required, without leaving the house. For a good friend of our NGO with three small shops this was a period of very significant stress, having just lost the father of her children she was forced to watch her business suffer without her.

Does religion impact the wealth of the region? Marginally, when compared with other factors. Whilst compulsory tithes and high funeral costs are uncomfortable for a Westerner to see, they are the basic costs of social life here, without which communities would not exist. Add to that that the locals believe these payments are a requirement for entry to paradise and they seem a very small price to pay indeed.