Eradicating corruption impeding economic growth

04 Dec, 2016 - 00:12 0 Views
Eradicating corruption impeding economic growth

The Sunday Mail

Nyasha Patience Mandeya —
The economy continues to take centre stage in matters of national importance as Zimbabwe anxiously awaits the recently-introduced bond currency to ease economic pressures emanating from the liquidity crisis that had resulted in a deflationary and consequently recessionary trend unfolding.

That trend threatened the prospects of a much-needed economic turnaround whose major outcome is total economic emancipation for the Zimbabwean people.

However, another phenomenon, corruption, is of an even greater magnitude, requiring an urgent and equally robust intervention to ensure the overall goal of total economic empowerment does not become elusive.

Victims of corruption in the public or private sector, non-governmental organisations or religious sectors are always the people. This underscores the need for zero tolerance to corruption, which must be a national priority.

Although there is no universal definition of corruption, Black and Garner (2000) define it as the act of an official or fiduciary person who unlawfully or wrongfully uses his station or character to procure some benefit for himself/herself or for another person, contrary to duty and the rights of others.

Its main broad forms are as follows:

◆ Petty, administrative or bureaucratic corruption includes isolated transactions by individual public officials who abuse their office by demanding bribes, kick-backs, diverting public funds or awarding favours in return for personal consideration.

◆ Grand corruption which relates to the theft or misuse of vast amounts of public resources by state officials, usually members of or people associated with the administrative elite.

◆ State or regulatory capture or influence peddling which refers to state capture or collusion by private actors with public officials or with politicians for their private benefit. In such instances, the private sector captures the state legislative and judicial apparatus for its own purposes

◆ Patronage, paternalism and clientelism which occurs when officials use their official position to provide assistance to clients or colleagues with the same geographic, ethnic, or cultural origin so that they receive preferential treatment in their dealing with the public sector, including public sector employment.

Corruption is generally attributable to a combination of diverging objectives and the existence of asymmetric information as alluded to in the principal-agent theory.

Corruption is a mind-set as it is a value system that is exacerbated by sheer greed, lack of accountability, the hunger for instant material wealth and conspicuous consumption.

This behaviour is treacherous and akin to “selling” out. Sell-outs, during the liberation struggle, exchanged vital information about the war, endangering cadres who had sacrificed their lives to fight the forces of oppression, both political and economic, for a pittance.

The struggle for total economic emancipation will remain elusive for as long as we harbour amongst ourselves these “sell-outs” who will grab the earliest and most convenient opportunity to enrich themselves at the expense of the ordinary man, woman or child.

It is indeed beyond reasonable or unreasonable cause, as Stapenhurst (2000) affirms, that a critical element of a country’s anti-corruption programme is an effective media.

Over the years, corruption has been conspicuous by its significant prominence across all media houses, especially by the public sector.

It is worrisome when a few connected individuals always want to enrich themselves at the expense of a nation whose infrastructure is inadequate, such that only a fifth of Zimbabweans have access to clean water, moreso, when most citizens are living below the poverty datum line.

These sell-outs are not in any way different from those who have unleashed heinous sanctions which have devastated the people’s livelihoods.

Reserve Bank of Zimbabwe Governor Dr John Mangudya has decried the prevalence of illicit financial flows through which liquidity has been exported.

Corruption is detrimental to the achievement of the imperative of total economic emancipation as it hinders economic turnaround in the following ways.

Slow economic growth
Corrupted economies are characterised by a disproportionately small middle class and significant divergence between the living standards of the upper class and lower class.

Most of the country’s capital is aggregated in the hands of the minority. Hence, these economies that are afflicted by a high level of corruption, which involves the misuse of power, whether in the form of money or authority, in order to achieve certain goals in illegal, dishonest or unfair ways, are incapable of prospering as fully as those with a low level of corruption.

Corrupted economies are just not able to function properly because corruption prevents the natural laws of the economy from functioning freely.

Thus corruption occurs when deals are made, contracts are awarded, or economic operations are carried out, which lead to monopolies or oligopolies and increase the cost of transactions in the economy.

Also, business-owners could use their connections or money to bribe officials so that they manipulate policies and market mechanisms to ensure they are the sole provider of goods or services in the market, thereby adversely affecting the overall welfare of the society as it renders it more difficult for the poor and other disadvantaged groups such as women and minorities to obtain public services.

Impairs capital accumulation
Rampant corruption by way of smuggling, under-pricing, mis-invoicing, under-reporting of production and tax evasion are serious threats to Government revenue collection.

In Zimbabwe, the Comptroller and Auditor-General produces yearly reports exposing brazen corruption involving tenders and ghost workers in Government departments, local authorities and parastatals.

However, none of them have led to the prosecution of people implicated in the pilferage, or recovery of lost revenue.

Harms reputation of and erodes trust in the State
Corruption has an adverse impact on the country’s economy as it disincentives foreign investment. Investors seeking a transparent and fair, competitive business environment avoid investing in countries where there is a high level of corruption. Corruption increases the cost of goods and services through illegal and unofficial payments that are made.

For instance, bribery and “connections” play an important role in the recruitment and promotion of staffers. As a result, it compromises the quality of particular sectors, thereby reducing the effectiveness of economic growth.

Increases inequality and poverty
Most emerging economies suffer from a high level of corruption that slows their overall development. The entire society is affected as a result of the inefficient allocation of resources, the presence of a shadow economy, and low-quality education and healthcare.

Corruption thus makes these societies worse off, and lowers the living standards of most of their population.

Lowers the quality of education, public infrastructure and health services
A working paper of the International Monetary Fund published in 2010 show that corruption has an adverse impact on the quality of education and healthcare provided in emerging economies.

Critical to curbing corruption is the choice of anti-corruption measures that reduce monopoly power and increase accountability.

From an institutional perspective, the solution lies in enhancing integrity, building new institutions, reforming and strengthening existing ones, in particular political, judicial and administrative institutions, in checks and balances.

The anti-corruption strategy advocated here rests on economic development and a strong civil society. Government is highly commended for its efforts in coming up with a legal framework to deal with corruption through the recently-amended Public Finance Management Act which could see an improvement in public finance management.

In addition, the Zimbabwe Government has announced a plan to set up a dedicated unit to monitor the abuse of public funds as it steps up the fight against graft widely seen as a major obstacle to business and law enforcement.

Finance Minister Patrick Chinamasa made the announcement earlier this year following damning reports by the Comptroller and Auditor-General on a catalogue of allegations of high-level abuse of State resources touching on all arms and levels of Government.

This should, however, be complemented by strict enforcement of the statutes. President Mugabe has been at the forefront condemning abuse of authority and has made repeated calls for investigation into all corruption cases.

The President is on record saying, “Accordingly, all cases of corruption, dishonesty and abuse of authority should be expeditiously investigated, regardless of whether they occur among the police or the general public. Public servants, imbued with integrity and commitment, all should always strive to work for national development.”

A closer look at why Chile has one of the world’s most transparent public procurement systems reveals that using appropriate systems and latest technologies is one good way to curb corruption in the public sector.

The Chile government introduced a public electronic system for purchasing and hiring, based on an internet platform. It has earned worldwide reputation for excellence, transparency and efficiency.

As the ruling party gears itself for the 16th National People’s Conference in Masvingo, it is important that it exhaustively discusses, in its state of the party and economic thematic committees, the disconcerting levels of corruption threatening to derail economic development.

Such corruption also directly threatens the fulfilment of Zanu-PF ideals on economically-empowering the indigenous people of Zimbabwe whose key concerns and expectations are that they should be primary beneficiaries of the policy of Indigenisation and Economic Empowerment.

This requires the Zanu-PF Government to put in place robust measures to ensure an even more transparent, accountable, tangible and measurable implementation matrix in the national interest.

It is, therefore, the national duty of each and every one of us, young and old, to embrace a collective responsibility to transform from within and adopt a high level of self-discipline and compliance to non-negotiable values of transparency and accountability to end the scourge of corruption.

Cde Nyasha Patience Mandeya is Zanu-PF Director of Economic Affairs. She wrote this article for The Sunday Mail as part of the build-up to the ruling party’s 16th Annual National People’s Conference scheduled for Masvingo this December.


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