ARUSHA – Business leaders in the region have challenged the East African Community (EAC) governments to set up structures that promote transparency to bolster business in the region. Speaking at the just concluded AGOA forum in Nairobi, Kenya, (EABC) Executive Director, Charles Mbogori, cited e-government which he said builds accountability by standardizing service delivery.
“Publishing government information online makes it possible to track decisions and actions and thus, serve as an additional deterrent to corruption,” an EABC press statement quotes Mbogori as saying.
The concerns follow the publication of a 2008 EABC Business Climate Index survey, which reveals that at least 35 percent of business leaders interviewed indicated that corruption at customs is a major obstacle to doing business in the region.
“Corruption has a negative effect on a country’s ability to compete in international trade,” Mbogori added.
“Smaller companies tend to suffer more as bribe payments will constitute a larger proportion of their revenue, leaving them unable to compete with bigger companies where large bribes are required to secure a contract.”
The International Monetary Fund (IMF) estimates that corruption reduces investments by almost 5 percent.
The African Union (AU) estimated in 2006 that $148 billion a year leaves the continent because of corruption, which represents a quarter of the continent’s GDP.
The EABC boss added that recurrent corruption payments will also increase business costs and therefore reduce profitability.
EABC is in a process of preparing a code of conduct for its membership to be referred to as “Business Action Against Corruption” (BAAC), which is a private public initiative to tackle corruption.
The 2008 Corruption Perceptions Index (CPI) published by Transparency International (TI), ranked Rwanda and Tanzania as the least corrupt countries in the East African Community (EAC).