First published on the ISS website

Governments and business must do more to combat corruption as the biggest threat to African peace and development, said Institute for Security Studies (ISS) executive director Anton du Plessis, speaking on Friday at the World Economic Forum Africa meeting in Kigali.

Du Plessis said the biggest threat to peace and development in Africa was corruption and not terrorism, drought, HIV/Aids or malaria. “Corruption is also Africa’s biggest terror risk and its biggest brake on development. It is arguably one of Africa’s biggest killers.”

Yet the moral and financial investment in fighting terror, drug trafficking and organised crime is much greater than the investment in stopping corruption. Africa does not compete in corruption’s global premier league. But the effects of corruption are often more devastating in Africa due to institutional weakness and fragility of states and cities, Du Plessis said.

A new generation of African leaders has come to power on anti-corruption tickets. They understand the importance of accountability and the need to partner with the private sector to promote investment.

Western companies complicit in African corruption

Developed nations can help by ensuring their companies invest responsibly and don’t aggravate corruption in Africa. “Too many developed countries tolerate the export and enabling of corruption by their corporate and individual citizens,” Du Plessis said.

“Africa’s many forms of corruption are matched by the multiple ways that Western companies are complicit in them. Dodgy arms deals and illicit financial flows could not succeed were it not for the international lawyers, bankers and accountants who bend the rules to give corrupt practices a veneer of legality. A myriad of technically legal actions add up to massive theft.”

The London Anti-Corruption Summit on 12 May was an opportunity to fix blind spots in global anti-corruption architecture, and for governments to commit to responsible investing in fragile economies, Du Plessis said.

Africa loses more than US$50-billion annually to illicit financial outflows. A joint report by the African Development Bank and Global Financial Integrity found that up to 65% of this lost revenue disappeared in commercial transactions by multinational companies. “For too long there has been a tacit acceptance of illegal money passing through global systems. It’s time for global leaders to walk their anti-corruption talk,” Du Plessis said.

The Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention needs to be more rigorously enforced because its signatories are responsible for approximately two-thirds of world exports and almost 90% of total foreign direct investment, du Plessis said.

The convention requires its 41 signatories to make foreign bribery a crime for which individuals and enterprises are responsible. Yet according to Transparency International more than half of the countries have failed to investigate or prosecute any foreign bribery case during the last four years.

Business has a role to play in strengthening governments

Businesses investing in Africa must also do more to understand fragility and conflict, and their role in building stable states. This is one of the conclusions of a report released at the WEF summit in Kigali. Responsible Investment in Fragile Contexts, by the WEF Global Agenda Council on Fragility, Violence & Conflict, says fragility, conflict and crime are bad for business.

Africa today has fewer conflicts but violence continues to hold back development and generate significant costs to governments, business and societies. Preventing conflict and strengthening states was traditionally the role of national governments, international organisations and NGOs. Business didn’t get involved.

But more innovative solutions to conflict require public-private partnerships and greater engagement of the business sector, Du Plessis says. Violence and conflict are a brake on socio-economic advancement. Estimates of the impact of violence on the global economy range from $9.5-trillion to $14.3-trillion.

“Opportunities to make money must be considered alongside the opportunity to create stability, with investment that enables sustainable growth,” he said.

“Business needs to contribute to the collective resources, knowledge, capital and competencies of public-private partnerships that are geared not just to profit but also to support fragile governments and build robust state institutions.

“Developing constructive relationships and strengthening the local socio-economic environment will benefit a business in the long term,” Du Plessis said.