Unmasking Corruption In Ghana
the runaway gravy train
- Once known as one of Africa’s most vibrant democracies with good governance structures, Ghana is on the spotlight after a recent bribery and corruption survey identified it as a corruption hotspot.
- Vitus Azeem, the executive director of Ghana Integrity Initiative – a local chapter of Transparency International says corrupt procurement processes, embezzlement of public funds and illegal payments of judgment debts are particularly disturbing. He calls for total law enforcement and harsh punishment for offenders
- Azeem says the endemic corruption combined with inequality and unemployment is likely to bring social strife
- During his trip to Kenya and Ethiopia, US President Barack Obama urged Africans, not just leaders, but everyone, to end corruption, which reportedly costs the continent over US$148 billion a year - Ghana contributes roughly US$1 billion to the figure
- Economic Commission for Africa chaired by former South African President Thabo Mbeki reported the continent was losing up to $60 billion annually in illicit financial flows
Every dollar lost through corruption should matter to everyone on the continent. US President Barack Obama, during his trip to Kenya and Ethiopia, emphasised the war against corruption should be everyone’s business, not just the leaders. The reported lost billions could otherwise be used to end poverty, diseases and illiteracy.
As President Obama addressed African leaders on July 28 at the African Union headquarters in Addis Ababa, and on the background of AU’s own estimates that more than US$148 billion is lost annually to corruption (around 25% of combined national incomes), he asked all citizens of the continent to play their parts in ending the cancer.
To rousing applause, President Obama stated: “Here in Africa, corruption drains billions of dollars from economies that can't afford to lose billions of dollars... And when someone has to pay a bribe just to start a business or go to school, or get an official to do the job they’re supposed to be doing anyway - that’s not ‘the African way’.”
A few days before President Obama landed in Kenya another corruption story was trending in South Africa and internationally. Law firm ENSafrica released the results of its new Anti-bribery and Corruption Survey that identified the top eight corruption hotspots in Africa. Ghana made the cut.
Now, when one thinks about corruption and bribery in Africa Ghana hardly comes top of the mind. The West African country is seemingly one of Africa’s most vibrant democracies with fairly developed governance structures. On the Transparency International Corruption Perception Index, Ghana ranks eighth on the continent and 61 out of 175 globally.
Professor Kwesi Yankah, president of Central University College, recently argued that the ranking should be seen against two important factors: that Africa has often scored the lowest among the six regions designated by Transparency International, with an average score of 33 out of 100.
“If one should go by global standards and Ghana is seen as belonging to the best 7 or 8 in the lowest rated continent, this should not be a great source of delight. Secondly, corruption is persistently cited as major obstacle to doing business in Ghana.”
The impact of corruption can be seen in the economy, lack of adequate public services, and in the business and investment environment. From ports and judiciary to parliament and government agencies.
Corruption costs the country about US$1 billion annually, and analysts say the figure could rise to US$4 billion if nothing is done quickly. Donor partners withheld funding to the tune of US$600 million early this year, citing uncontrolled corruption.
Vitus Azeem, the executive director of Ghana Integrity Initiative (the local chapter of Transparency International), says the shrinking foreign direct investment inflows and business confidence levels are some of the indications that the situation is worsening.
The 2015 EY Africa Attractiveness Survey echoes similar sentiments. FDI inflows fell in Ghana, which experienced consistent project growth since 2007. Last year the number of inward investment projects fell to 39, from 58 in 2013. However, the average project involved more than twice as much investment. Ghana slipped to seventh position on the professional services firm’s project ranking, from fourth in 2013, with South Africa, UK and Nigerian investors becoming more cautious about launching projects in the country.
“We are not seeing new foreign companies investing here, in spite of the generous tax concessions and numerous travels abroad by government officials to market Ghana. Infrastructure development is not increasing and even ongoing developments are not adding value. And then there is the current power crisis,” says Azeem.
The ENSafrica anti-bribery and corruption survey that named Ghana as a corruption hotspot says corruption in Africa is almost insurmountable. Some 88 companies interviewed said facilitation payments are routine and are mostly paid by third parties. The managing director of ENS-Forensics, Steven Powell, tells uSpiked the branding of Ghana as less corrupt should be taken with a pinch of salt - the country’s fairly consistent performance on Ti Corruption Perception Index is likely because the bribes are smaller compared to other countries.
Corrupt procurement processes, embezzlement of public funds and illegal payments of judgment debts are disturbing to anti-corruption crusaders in Ghana, who moan the lack of implementation and enforcement of existing anti-corruption laws.
In April, the Institute of Economic Affairs said there is alarming tolerance for corruption by citizens. The policy think tank took anti-corruption agencies to task for failing to punish offenders, and called for creation of an information law that can allow greater access to public information.
Laws that promote accountability in the public sector include the Financial Administration Act, Financial Administration Regulations, the Public Procurement Act, the Whistleblowers Act, the Audit Service Act and the Internal Audit Agency Act.
The Criminal Code also lists a number of crimes that are considered as corrupt activities and prescribes sanctions for breaches. Parliament endorsed the National Anti-Corruption Action Plan in 2014.
Also, a number of institutions such as the Commission for Human Rights and Administrative Justice and the Economic and Organised Crime Office have been established in compliance with the above laws.
Do the anti-corruption laws and institutions have adequate tools to work properly? According to Azeem, leadership of anti-corruption institutions needs to start justifying their own spending of taxpayers’ money. The institutions have several troubles (alleged corruption, lack of resources and limited powers) that stifle their respective abilities to investigate credible allegations. When investigations are successful, culprits walk with a slap on the wrist or worse, scot-free.
There are no visible mechanisms to hold companies accountable. Consequently, wayward companies are often ignored or excused on the grounds that they are not public institutions, and therefore should not be subjected to public scrutiny.
Powell has repeatedly said companies in Africa need to recognise and fear the consequences of bribery and corruption. “If corruption is thoroughly dealt with in the private sector, it would end the vice in the public sector.”
On the global stage, robust regulatory enforcement activity specifically by the US, UK, China and most recently Brazil, is pushing companies with cross border operations to be compliant. The rallying call is to have strong laws and effective enforcements in all jurisdictions.
“Businesses in Ghana need to form strong associations to resist
corruption and to start reporting corrupt practices. It is frightening to think of the possibility of losing business, especially if you are a small company that said ‘no’ to bribery. But imagine the effect if corrupt officials realise businesses are all working together to stop acts of bribery and corruption!
“So far there’s little progress in punishing offenders or ending corruption. We acknowledge the few successful prosecutions, but the government should stop waxing lyrical about these few cases and move forward. The people of Ghana need to see political commitment,” says Azeem.
Every day, many Ghanaians witness different forms of corruption and misconduct. Most individuals remain silent, but not former attorney and minister for justice, Martin Amidu. In 2012 Amidu was famously fired from his job for blowing the whistle on illegal payments of judgment debts to individuals with whom government had no contracts.
Even though the Whistleblowers’ law is almost a decade old, it has not been an effective anti-corruption tool. Many people haven’t used the law because they don’t understand it or are held back by traditional and cultural beliefs. Azeem says even though corruption perceptions and awareness among citizens is rising, reporting of criminal activities is dismal. The protection provided for in the law is not viewed as adequate and the compensation mechanism hasn’t been implemented since 2006.
“People feel that nothing will come out of it and that they can be exposed and victimised. Cultural beliefs and practices also serve to discourage citizens from reporting corruption – the fear that the affected persons will lose their source of livelihoods and the fear of spiritual intimidation,” he says.
Even in Azeem’s own civil society organisation that encourages reporting, he is not able to attract a lot of whistleblowers for similar reasons.
“My greatest worry is that as impunity increases in tandem with inequality, the breeding ground for social strife is fertile and more so with the rampant unemployment of young people. Some dishonest and corrupt politicians are willing to fund chaos, especially as we approach our election year.”