Graft fears blight business outlook

27/05/2010 | Thierry Ogier

Efforts to make African governments accountable have suffered setbacks, due to pressures generated by the global volatile economic environment, experts and activists warned in Abidjan this week

Efforts to make African governments accountable have suffered setbacks, due to pressures generated by the global volatile economic environment, experts and activists warned in Abidjan this week.

Despite a wave of changes on the continent over two decades that led to multi-party democracies being established, accountability and corruption remain a major sticking point for businesses operating in the region.

“There are still huge corruption issues that scare away investors and slow down the flow of foreign direct investment,” said Eric Paget-Blanc, a director at Fitch Ratings, the credit rating agency. In Central Africa, it has reached “monumental” proportions.

Sylvain Malice, planning minister of the Central African Republic, admitted: “Corruption is indeed a concern. But some measures have been implemented. Government members and senior officials have to declare what they own, when they get in and when they leave office.

“Operations are being monitored by an observer team chaired by the prime minister, and money flows are being tracked in order to avoid money laundering,” he said.

Concern is widespread in the region, Paget-Blanc said. “In Cameroon, all investment projects have been delayed” as a result. Graft is also hindering progress in the Democratic Republic of Congo, he said.

Peter Eigen, a prominent member of the Africa Progress Panel and founder of Transparency International, said the region had registered uneven progress on governance.

“Several years ago, corruption was something people thought it was something it was part of the game. Now there is a better awareness,” he said – but the process has suffered setbacks in key countries.

He cited the political crisis in Kenya and the social and economic problems in South Africa as the main causes for this.

Another observer said: “This issue is at the heart of the political fighting in Kenya ahead of the constitutional referendum in September.” The current proposal does not include any mechanism to improve governance, he said.

Corruption is still “rampant” in 31 out the 47 African countries surveyed by Transparency International. Setbacks are more numerous than improvements compared to previous years, said the African Development Bank.

The situation in South Africa continues to deteriorate “while in 2007 South Africa numbered among the best performers on the continent,” according to an AfDB report.

Last year a survey conducted by the African Union showed that the cost of corruption amounts to around 10% of Africa resources-generated wealth. “Africa still suffers from human and financial deficits in its governance institutions,” said the AfDB.

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