Corruption cripples economic turnaround

via Corruption cripples economic turnaround | The Zimbabwean 17.12.13

Widespread corruption in the civil and public sectors will make it difficult to turn around the economy in the near future, analysts say. Zimbabwe is ranked among the most corrupt nations in Africa.

A recent corruption perception index done by Transparency International, which measures perceived levels of public sector corruption, ranks this country at 163 out of 174 surveyed countries, with Somalia topping the list.

The Zimbabwe Revenue Authority has revealed that last year, Zimbabwe lost $2 billion in revenue due to corruption, which is mostly manifested through bribery, patronage, tendering irregularities and fraudulent documents.

Economic analysts insist that an effective anti-corruption drive is vital in efforts to resuscitate the economy which is currently saddled with poor investment, disinvestment, company closures, low liquidity and a struggling treasury.

The government, which is reported to be sitting on an $8 billion external debt, recently deferred bringing the annual budget presentation to parliament, with many suspecting that it had no money to back it, while it has staggered paying bonuses to civil servants.

“When you look closely at the matter, corruption is one of the most prominent factors that have brought the economy down,” Innocent Makwiramiti, an independent economist, told The Zimbabwean.

“Since there are no clear signs that the government and other stakeholders have the will to fight corruption, any attempts to revive the economy will always come to nought. Corruption in both the public and private sectors has become cancerous and it will take a long time and much effort to bring it down to manageable levels.” He said it was difficult to quickly deal with corruption and graft because they had become institutionalised.

“One key pillar in turning the economy around is attracting foreign investment. Sadly, the perception out there is that Zimbabwe is bad for serious business because of this scourge of corruption and outside investors are scared to come in,” added Makwiramiti.

President Robert Mugabe recently claimed that top officials in government institutions were demanding hefty bribes from suitors who wanted to join the diamond mining sector, publicly fingering Goodwills Masimirembwa, the former Chairman of the Zimbabwe Mining Development Corporation as having received a multi-million bribe from potential investors.

While Mugabe’s anti-corruption statements were greeted warmly, there are complaints that he and other key stakeholders lack the political will to fight the scourge. After his broadside against Masimirembwa, critics complain, nothing tangible has been done.

Another economist, Vince Musewe, said corruption was also rife in the private sector.

“There is a lot of corruption in the private sector as well, even though attention has generally been focused on the public sector, where it tends to be more visible. With corruption so rife in both sectors, it is difficult to turn around the economy,” he said.

“A substantial number of big players in the private sector is benefitting from the government, so these guys tend to be quiet when there is flagrant corruption,” added Musewe.

He also blamed corruption on monopolies, saying that tended to drive graft and wayward corporate governance. Musewe rapped the government for its stranglehold on parastatals, which he described as among the most corrupt institutions.

Over the years, several chief executive officers and top officials at the parastatals have been accused of bribe taking, flouting tender procedures, receiving hefty perks and theft of institutional property.