A group of African Heads of State and Governments met some time last year under what is called the “African Union Assembly” and they declared 2018 as the ‘African Year of Anti-Corruption’ with the theme “Winning the Fight against Corruption: A Sustainable Path to Africa’s Transformation”.
The theme ostensibly meant to give another push to countries to work tirelessly and invest their available resources, either abundant or scarce, to win the fight against corruption in 2018.
But, can a fight against corruption be won in one year?
Such a question can be answered by just looking back at the professed goal that African leaders had given themselves to address corruption, a problem that many countries are confronted with.
In 2003, African leaders adopted an anti-corruption treaty – the African Union Convention on Preventing and Combating Corruption (AUCPCC) – which was meant to serve as a driving force to prevent corruption on the continent.
This Convention, however, has faced resistance from countries than many thought. One professor, René Munyamahoro, at some point bluntly indicated that this convention has yielded poor results due to insufficient commitment and implementation so far.
“Failure to adopt continental norms on governance translates into difficulty to engage national level actors on the same values and principles at national level,” he noted at a workshop in Kigali.
This particular statement is based on a fact that a section of countries on the continent have almost refused to sign the convention; some others have failed to ratify it, while others have either failed to domesticate or implement it.
About 40 countries have signed or ratified the convention.
Yet, corruption continues to roam across the continent. Africa is battling with high-level crimes like money laundering and illicit enrichment, mostly done by multinational corporations and high-ranking officials.
To put this in perspective, the Organisation for Economic Co-operation and Development in February 2018 reported that Africa loses on average about US$50 billion a year through illicit flows. The Wall Street Journal says as much as US$60 billion is being siphoned off.
Andrew Mold, the Acting Director of the United Nations Economic Commission for Africa (UNECA), indicated this week that his organisation conducted a study back in 2015 in which it was found out that the continent lost an estimate of $119 billion through trade re-invoicing.
“This had a substantial impact on development, especially on resource-constraint countries that want to improve their tax collection base. The figure represents 2 per cent of Africa’s GDP,” he said.
Re-invoicing is in essence a method used by multinational companies when invoices and payments are being made in different currencies by different branches of the firm. The products produced in one country are invoiced in the currency of that country and then re-invoiced in the national currency of the receiving branch.
UNECA’s study put a strong case on manufacturers, those engaged in metals and petroleum products as well as oil business on top of this practice.
What is Africa doing about it?
African Union through its anti-corruption advisory body renewed its partnership with Transparency International last month. The idea was to conduct assessments on the level of corruption in countries and make recommendations.
Surprisingly, this body itself has been involved in corruption allegations. Just this year, a member of this advisory board resigned over the body’s alleged corruption. Daniel Batidam, who served for three years, highlighted lack of transparency, accountability and abuse of power among his reasons to resign.
Samuel Kimeu who heads Transparency International Kenya thinks governments cannot do much alone in the pursuit of fighting corruption as most states’ decisions are politically motivated.
“Instead, they should collaborate with civil society whose actions do not go through all the political process and procedures that many state departments have to go through. If I know there is a case I am following up, it is easier for me to send an email to another organisation in a different country and get feedback,” he says.
It is not all bad, though.
There have been improvements in some of the countries when it comes to fighting corruption. Rwanda, Tanzania, Capo Verde, Seychelles, and Botswana, just to name a few, have made improvements.
A case of Rwanda
Rwanda is among countries on the continent that is on track to implement the convention.
This year, the country passed a law on prevention and punishment of money laundering and terrorism financing. A year before, the government approved the ratification of the Agreement of Accession of Rwanda to the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) – a group that seeks to combat money laundering.
What’s clear is that the cost of such financial crimes is undeniable.
PricewaterhouseCoopers reported that money laundering in 2016 cost between 2 per cent and 5 per cent of global GDP, roughly US$1 trillion to US$2 trillion, with Africa the worst affected.
These figures are probably modest, as most financial crimes are not detected or reported.
Information from the National Public Prosecutor Authority’s Economic and Financial crimes Unit indicate that millions of money has been taken out of the country.
Jean Marie VianneyNyirurugo, the head of this department, told a group of high-level leaders in Kigali this week that criminals had siphoned off significant amount of money from the country.
“When we were investigating embezzlement cases we discovered that some of the suspects may have sent the money stolen [from Rwanda] to different countries, including in Europe, America and Africa,” he said, without mentioning specifically how much has been taken.
But he said that Rwanda has sent requests to countries like Nigeria, Uganda, Poland, USA, Spain, Central Africa Republic and Canada to recover the money they think belongs to the country.
However, only two requests have been responded, according to the official. Technically, this paints a picture of reluctance of some states to assist in asset tracking and recovery.
There is optimism
A new law set by Rwanda now prohibits financial institutions from establishing business relationships with institutions with no physical presence in their home country, or banks suspected of operating anonymously.
They are also required to identify and profile customers who execute occasional transactions exceeding the threshold set by the Financial Intelligence Centre.
Generally, Rwanda has made a number of changes that experts believe will serve as comprehensive measures that would help the country counter the prevalence of corruption.
This year, the panel code was revised and corruption was re-defined as imprescriptible offence and the offense of embezzlement is placed in the category of crime related to corruption.
In addition, a new anti-corruption law has been promulgated in September 2018.