The Sunday Maverick with GLORia NDORO-MKOMBACHOTO
Corruption in Zimbabwe has to be stamped out. On January 31, 2019, President Emmerson Mnangagwa fired the entire Zimbabwe Anti-Corruption Commission (Zacc) in a move that was hailed as progressive.
According to Pindula News, the President had “summoned the Zacc commissioners earlier in January 2019 and advised them that he intended to dissolve the commission due to its ineffectiveness and the fact that the commissioners themselves were reportedly involved in corruption”.
Meanwhile, South Africa has been no different either.
The South African Sunday Times newspaper of February 3, 2019 reported that the five countries, namely, the United States, the United Kingdom, Germany, the Netherlands and Switzerland, wrote memoranda to President Cyril Ramaphosa, expressing concern about endemic corruption in the country and how South Africa was prone “to frequent changes to policies for industries including mining and the protection of intellectual property rights”.According to the South African Reserve Bank, the five nations’ share of foreign direct investment (FDI) into SA amounted to 57% (valued at close to $850 million) by the end of 2017.
South Africa began an inquiry into state corruption in 2018 after Ramaphosa became President. Ramaphosa promised to stamp out corruption and also pledged to raise $100 billion in investment to boost the economy and employment. Since the Zondo judicial commission of inquiry instituted by then President Jacob Zuma on January 23 2018 to investigate allegations of state capture, started, many high profile officials and business people have been named in corruption cases but there have been no arrests.
The unprecedented move by the embassies to write to the South African Presidency should be applauded despite the condemnation issued by SA’s Department of International Relations and Co-operation. In many cases, the embassies would just quietly warn existing and potential investors to tread with caution. Where there is dialogue, there is still interest and that interest represents collateral value.
Convictions and jail time a key indicator in the effective curbing of corruption
Under the just fired Zacc, whilst there had been arrests, there had been no convictions nor jail time. Cynics used to describe this as catch and release. Zacc lacked the necessary force for effectiveness because of its lack of independence. That is why in September 2018, Mnangagwa established a Special Anti-Corruption Unit housed in the Office of the President and Cabinet.
The Unit’s terms of reference include but are not restricted to the following:
* collaborating with the Zimbabwe Anti-Corruption Commission (Zacc), the Zimbabwe Republic Police (ZRP) and other such institutions in the fight against corruption, assist Zacc and other investigative agencies of the State in the perusal and consideration of corruption dockets, subject to the issuance of Authority to Prosecute by the Prosecutor General, prosecute corruption cases referred to the National Prosecuting Authority by investigative agencies.
This additional layer of bureaucracy was created because of the failings of Zacc. It was named “Special” because of its extraordinary mandate and its housing in the Presidency. It is hoped that once Zacc is properly reconstituted, this Special Anti-Corruption Unit will be merged with Zacc to avoid duplication of activities.
The point, whilst the setting up of more institutions to tackle corruption might appear to send a message across that there is political will to deal with this scourge, the truest test lies in the conviction rates of the bigwigs, some of whom are now parked at Zanu PF headquarters.
A welcome development is the above-mentioned amending the Exchange Control and Money Laundering and Proceeds of Crime Acts through constitutional provisions of the Presidential Powers (Temporary Measures) Act. This act whilst giving law enforcement agents such as the Police, the NPA and the Zacc more teeth to compel suspects to explain their wealth, will also empowering them to seize their unexplained wealth.
Corruption adversely impacts all layers of the economy
When corruption is rife, like it is in Zimbabwe, the citizens suffer. When corruption is endemic, it has the net effect of emptying the coffers of government as is the current situation in Zimbabwe. When corruption is widespread, it widens the inequality gap between the have and the have-nots and negatively impacts service delivery by the government.
In essence, it is the have-nots that unfairly bear the biggest brunt of corruption.
When there is rampant and pervasive corruption, the citizens distrust the government, weakening its legitimacy whilst confidence in public institutions, particularly those to do with the rule of law wanes. The lack of trust in public institutions, impacts adversely on domestic investment and tax revenues.
At a business level, corruption increases the costs of doing business by imposing unnecessary financial burdens on companies, curtailing their performance, productivity and growth. When there is rampant corporate failure as is the case in Zimbabwe, where jobs are being lost everyday, crime spikes threatening the safety and security of those already disproportionately affected by corruption. If it continues unchecked and unabated, corruption can be a source of uprisings, instability and conflict within a country, for the masses will have nothing to loose because of their destitution.
Where corruption is rife, like in Zimbabwe, individuals will view paying taxes as a questionable business proposition. Augusto Lopez-Claros writing for the World Bank in March 2014, on Nine Reasons why Corruption is a Destroyer of Human Prosperity, encapsulates it this way:
Corruption undermines government revenue and, therefore, limits the ability of the government to invest in productivity-enhancing areas.
Corruption distorts the decision-making connected with public investment projects as large capital projects provide tempting opportunities for corruption. Governments will often undertake projects of a larger scope or complexity than warranted by the needs of the country. (The nuclear project with the Russians where the Gupta brothers in SA had already positioned themselves by buying a uranium mine is a case in point. That project was going to cost the SA fiscus in the trillions of rands.)
There is solid empirical evidence that the higher the level of corruption in a country, the larger the share of its economic activity that will go underground, beyond the reach of the tax authorities. (That is why in Zimbabwe for example, up to 80% of the tax revenues are collected from less than 60 organisations. With the informalisation of the economy, Zimra has no capacity to collect from the informal sector and everyone and every other company operating in the middle.
Corruption discourages private-sector development and innovation and encourages inefficiency.
Corruption contributes to a misallocation of human resources. To sustain a system of corruption, officials and those who pay them will have to invest time and effort in the development of certain skills, nurture certain relationships, and build up a range of supporting institutions and opaque systems, such as off-the-books transactions, secret bank accounts, and the like.
Empirical work shows that corruption actually contributes to worsening income distribution. Gupta, Davoodi and Alonso-Terme (1998) have shown that corruption, by lowering economic growth, perceptibly pushes up income inequality.
Corruption creates uncertainty. There are no enforceable property rights emanating from a transaction involving bribery. This uncertainty is partly responsible for a perversion in the sorts of incentives that prompt individuals to want to seek public office. Where corruption is rife, politicians will want to remain in office as long as possible, not because they are even remotely serving the public good, but merely because they will not want to yield to others the pecuniary benefits of high office.
Because corruption is a betrayal of trust, it diminishes the legitimacy of the state and moral stature of the bureaucracy in the eyes of the population.
Bribery and corruption lead to other forms of crime. Because corruption breeds corruption, it tends soon enough to lead to the creation of mafias and organised criminal groups who use their financial power to infiltrate legal businesses, to intimidate (and extort), to create protection rackets and a climate of fear and uncertainty.
Corruption cases must be successfully prosecuted and perpetrators jailed
Corrupt individuals are essentially economic saboteurs must be named and shamed, their ill-gotten gains targeted and everything that gives them their current status scrutinised, and seized. Where the wealth was amassed in unconscionable, crooked and illegal ways, the assets must be confiscated and sold off to the highest bidders for the benefit of the state.
This is the time when the ruling party, Zanu PF, ought to be decisive, inclusive and collaborative with the citizens in stamping out corruption. Whistle-blowers must be given incentives to report corruption crimes and where they are likely to incriminate themselves, strike reasonable deals with the courts. It goes without saying that Zacc failed because it was imbedded within the governing party and therefore its wings were clipped. And if allegations that some of the Zacc commissioners were themselves now involved in the graft they were supposed to stamp out, then there was no one really guarding the guards!
The success or failure of any entity tasked with stamping out corruption is determined by the number of cases under its wing that have been successfully prosecuted, the perpetrators jailed and funds amassed from corrupt activities recovered and returned to the fiscus.
The time has come now when the ruling party must collaborate with all Zimbabweans regardless of their political affiliations. That strategy will allow the governing party to have a wider catchment from which to capture fresh and vibrant brains with the necessary independence to root out this menace in our midst.
Gloria Ndoro-Mkombachoto is an entrepreneur and regional enterprise development consultant. Her experience spans a period of over 25 years. She can be contacted at email@example.com