Skip to main content

The G-8 must act decisively: Africa’s future hangs in the balance

All eyes are on the leaders of the Group of Eight (G-8) as they convene in Gleneagles, Scotland. With the fight against poverty in Africa at the top of the agenda, the debate has focussed on strategies for increased prosperity on the continent. More and better aid is the oft heard refrain. And indeed, this will require immense resources. To muster these, Transparency International argues that the fight against corruption must be paramount, to increase aid effectiveness and to stop the misuse of public resources.

TI Press releases:

  • Statement by David Nussbaum, Chief Executive of Transparency International, on the conclusions of the Group of Eight Economic Summit at Gleneagles, Scotland
  • Group of Eight: Dam the stream of foreign bribes to Africa
  • Danger zone: aid must take corruption into account
  • Time for G-8 to step on the gas in fight against corruption
  • Fighting corruption increases aid effectiveness
  • Frequently asked questions on Corruption and Africa

A challenging picture

Corruption is not a victimless crime. Its most profound and deadly impact is on the poor, especially in Africa, where it is estimated that US $148 billion are lost every year to corruption. This figure is equivalent to half of Africa's external debt, which, according to the International Monetary Fund (IMF), reached US $284 billion in 2005.

By the year 2000, Africa accounted for half of the world's poor, compared with just 10 per cent in 1970. A total of 315 million Africans live on less than US $1 a day. Clean water is still a luxury throughout much of the continent. According to the World Health Organization (WHO), 1.1 billion people worldwide still do not have access to safe drinking water. In sub-Saharan Africa, 42 per cent of the population is still without clean water, promoting the transmission of malaria, which is responsible for the death of an African child every 30 seconds. Fighting corruption will release resources so that developing countries can finally cross the poverty line.

The poor: Hit hardest by corruption

Transparency International's 2004 Global Corruption Barometer, a survey of the general public that measures attitudes towards corruption, indicated that the poor are the group most affected by corruption. Half of low-income respondents believed petty corruption to be a very serious problem while only 38 per cent of high-income respondents agreed. The poor also reported the greatest impact of corruption on their personal and family lives.

How serious a problem is corruption globally?

Petty vs. Grand Corruption

Source: Transparency International Corruption Perceptions Index 2004

Corruption perceptions: World regions in comparison

Transparency International's annual Corruption Perceptions Index (CPI) shows that Africa is still the region most affected by corruption. In the 2004 CPI, a full 106 out of 146 countries scored less than 5 on a scale of 10, meaning that corruption was perceived as a serious problem.

Ranges between 10 (highly clean) and 0 (highly corrupt).

Source: Transparency International Corruption Perceptions Index 2004

"Corruption permeates the lives of Africa's poor and vulnerable, making it impossible for millions to earn an honest living." David Nussbaum, Chief Executive of Transparency International

How do African countries measure up?

Ranges between 10 (highly clean) and 0 (highly corrupt).

The corruption situation in developing countries is grave, but there are measures that can be taken to reverse this trend. The world's eight richest countries - the Group of Eight (G-8) - are meeting to discuss the future of Africa. Debt relief, as well more and better aid, have raised concerns about the risk of corruption. For this Transparency International proposes 6 key measures to combat corruption, while freeing vital resources for the most needed in Africa, as well as for all the developing countries:

1. One standard for everyone.
No G-8 country has yet ratified the United Nations Convention against Corruption, which was signed in December 2003. Ratification would send an unmistakable message that the G-8 lives by the rules it expects recipient countries to follow.

2. Stem the supply side.
Foreign companies are often the source of big-ticket bribe money in the developing world. G-8 countries have already ratified the OECD convention that criminalises this behaviour. Wealthy governments need to publicise and enforce their laws, to ensure that companies no longer view bribery as an acceptable way to win foreign contracts.

3. Tackling corruption hotspots.
The G-8 should develop provision for anonymous reporting of bribe requests, which could help identify hotspots where action to address corruption is urgently needed.

4. Publish details of aid given.
When the details of aid delivery are made public, civil society and independent investigators can follow the money trail to ensure fair usage. Aid packages should include funding for measures to fight corruption and build the capacity of local institutions.

5. Untie aid and follow rigorous procurement standards.
The conditions under which aid is given should encourage free and fair bidding. The aid process should include procurement standards that ensure transparent, quality-based bidding on public projects, not tied to vendors from a specific country.

6. Effective follow-up to Gleneagles.
The G-8 should report publicly on progress in implementing their anti-corruption commitments, on International Anti-Corruption Day, 9 December 2005.

Frequently asked questions on corruption and Africa

How corrupt is Africa?

A single answer, valid for all of Africa, would be neither fair nor accurate. Transparency International's Corruption Perceptions Index (CPI) shows that corruption in Africa is a major concern, more so than on any other continent.

But the picture is varied. There are countries, such as South Africa and Botswana, whose perceived level of corruption are comparable to developed countries such as Italy, Greece, Hungary and Taiwan, while others score much more poorly. Trailing the CPI are Nigeria, Chad, the Democratic Republic of Congo, Angola and Cote d'Ivoire.

Some countries perceived as very corrupt, including Kenya and Nigeria, are dealing with the legacy of past corrupt regimes, even though the political will to tackle corruption may exist. Additionally, there may be individual strong institutions and differing problems at various levels of government.

Lastly, it is important to note that in a globalising world economy, the problem of corruption is not just local. While corrupt networks are deeply embedded in many African countries, they are often created and nurtured with money from foreign investors, governments and companies.

Why is world attention focussing on Africa?

Pressure generated by civil society organisations in Africa and in developed countries has helped push poverty in Africa to the top of the global agenda. The United Kingdom's decision to form a Commission for Africa to address poverty and put debt relief on the Summit agenda has provided a window of opportunity to produce solutions.

The sense of urgency to improve living conditions for millions across Africa is underpinned by shocking facts:

  • malaria - a curable illness - kills about 150,000 African children each month;
  • with 11 percent of the world's population, Africa accounts for only about 1 percent of the global gross domestic product (GDP);
  • Africa is home to 25 million people with HIV - 64% of global infections;
  • every day in Africa, 6,300 people die and another 8,500 contract the HIV virus - 1,400 of whom are newborn babies infected during childbirth or by their mothers' milk.

The United Nation's Millennium Development Goals (MDGs) provide a framework for action. By the year 2015, the MDGs aim to:

  • halve the proportion of the world's people whose income is less than one dollar a day;
  • achieve universal primary education;
  • promote gender equality;
  • reduce maternal and child mortality;
  • combat chronic illnesses including AIDS; and
  • ensure environmental sustainability.

At current rates of development, none of the goals will be met in sub-Saharan Africa.

What does corruption cost Africa?

Because corruption is hidden, it is difficult to quantify how much money is lost to it. Worldwide, more than US$ 1 trillion dollars is paid in bribes each year, according to ongoing research at the World Bank Institute. The figure compares to a world economy worth just over US$ 30 trillion, and does not include embezzlement of public funds or theft of public assets.

The African Union estimates that corruption costs African economies more than US$ 148 billion dollars each year. This figure is thought to represent 25 percent of Africa's GDP and to increase the cost of goods by as much as 20 percent, deterring investment and holding back development.

An accurate representation of the cost of corruption would look not only at direct losses, but at the costs of opportunities lost. Countries that tackle corruption and improve their legal structure can see a considerable increase in per capita income in the long-term, and a highly significant decrease in child mortality, the World Bank Institute research shows.

How does corruption affect the poor?

Corruption affects the poor disproportionately, since they are more vulnerable to extortion and intimidation for basic services, as well as to the harsh consequences of corruption on their country's overall development. Corruption increases the cost of public services. It lowers their quality and can restrict the public's access to water, health and education; divert public resources away from social sectors and the poor; and limit development, growth and poverty reduction.

What are African countries doing to fight corruption?

The drafting of the African Union Convention against Corruption is evidence that the issue is important to member states, and that African countries are taking a lead in efforts to rid the continent of the scourge of graft. Six more ratifications are needed before the Convention enters into force.

African countries have also taken the lead in signing and ratifying the UN Convention against Corruption, which 13 African countries have ratified. No G-8 country has ratified the Convention.

Furthermore, the New Partnership for Africa's Development (NEPAD), which includes strong governance components, is another positive sign that African governments are willing to embrace the fight against corruption and are not waiting for others to show them the way.

At the national level, countries have taken steps across Africa to enshrine in law the principles that are basic to fighting corruption and improving governance. Important elements are:

  • a free press;
  • free and fair elections;
  • political stability and the absence of violence;
  • stable and effective government institutions;
  • the existence of good laws that are respected and enforced.

Political will by government leaders is also essential. While some of the most egregious cases of abuse by heads of state have taken place in Africa, so too have courageous steps to purge governments of corrupt elements. A recent example was the decision by South African President Thabo Mbeki to sack his deputy, who had been implicated in a corruption scandal.

Citizen participation and monitoring by civil society are also important. In Uganda, for example, parents given greater access to information were able to track spending by local government and school authorities and thereby stem massive leakage in school budgets, ensuring a better education for their children.

Why should the G-8 leaders and donor countries care about corruption?

Corruption should be addressed in the aid process. Donor countries should not assume that because a country is perceived to have high levels of corruption, aid will end up in the pockets of corrupt leaders. Many of the countries that rank worse in corruption indices are also those with the greatest development needs. Many of them have demonstrated the political will to tackle corruption but are dealing with the legacies of previous corrupt regimes. These countries should not be condemned to decades of underdevelopment.

Instead, corruption must be tackled in tandem with other problems of underdevelopment. The risk of corruption could be mitigated through more effective monitoring or through direct budgetary assistance, which increases local ownership of projects and reduces administration costs. Conversely, attaching conditions to aid - for example, requiring that the funds be spent on goods and services from the donor country - can increase opportunities for corruption.

The G-8 is important to the effort to reduce corruption and boost development in Africa. They play a major role in increasing aid and in lessening the debt burden on recipient countries.

But many of their companies also participate in corrupt transactions. Until 1997, when the OECD convention outlawing foreign bribery was signed, companies from some developed nations received tax breaks from their governments for bribing their way into new markets. Today, governmental export credit agencies, underwriters of massive infrastructure projects in Africa and elsewhere, continue to neglect their responsibility to carry out due diligence on the companies that bid for projects.

What can the G-8 do?

The G-8 has an important leadership role to play. Because foreign companies are often the source of big-ticket bribe money in Africa, G-8 countries should publicise and enforce their own laws, to ensure that their companies no longer view bribery as an acceptable way to win foreign contracts. G-8 governments should allow investigation and prosecution by foreign countries if their companies are believed to be involved in bribery abroad.

The G-8 should develop provisions for anonymous reporting of bribe requests, which could help identify hotspots where action to address corruption is urgently needed.

Publishing the details of aid given will allow civil society and independent investigators to follow the money trail, ensuring fair usage. Aid packages should include funding for measures to fight corruption and to build the capacity of local institutions.

The conditions under which aid is given should encourage free and fair bidding. The aid process should include procurement standards that ensure transparent, quality-based bidding on public projects, not tied to vendors from a specific country.

As part of its leadership role in fighting corruption, the countries of the Group of Eight nations should ratify the United Nations Convention against Corruption.

The G-8 should report publicly on progress in implementing their anti-corruption commitments, on International Anti-Corruption Day, 9 December 2005.

For any press inquiries please contact press@transparency.org