Corruption - An Albatross Around Zimbabwe’s Economy - Albert Dhafana

Corruption- An Albatross Around the Neck of Zimbabwe’s Economy

Albert Dhafana

The United Nations agencies have frameworks which provide a guide in terms of understanding the discourse of the development of nations. The United Nations Development Programme (UNDP) for example measures development in terms of how public resources are used for the benefit of the generality of the citizens of a given country. The effects on the national economy are disastrous in instances where there is misuse of public office, power or authority for private benefits through undesirable means like extortion, bribery, nepotism, influence peddling, fraud, speed money or embezzlement.

Morris and Klesner writing on the subject of corruption focusing on Mexico explain how the ill practice deviates from serving the common good. This is the violation of formed rules governing the allocation of public resources by officials in response to offers of financial gain or political support (Camerer, 2001). The Catholic Social Teaching identifies the deliberate structures of sin, which are created by power bearers in the uneven and unfair allocation of public resources. Through arbitrage and rent seeking tendencies, individuals and institutions use their influence to appropriate to themselves goods and services intended for the general populace. Transparency International Zimbabwe note in their 2019 report that corruption remains a key governance and development challenge confronting Zimbabwe. There is agreement from the majority of the sections of society that corruption has in the last 15 years progressively become an endemic problem in Zimbabwe. In 2018, Zimbabwe scored poorly on the Corruption Perception Index (CPI) rankings at 22, confirming unsustainably high levels of corruption in the public sector. The (CPI) ranks 180 countries and territories by their perceived levels of public sector corruption, according to experts and business people, giving each a score from zero (highly corrupt) to 100 (very clean). Shades of Corruption in Zimbabwe In order to fully appreciate how corruption has negatively affected economic development prospects, it is necessary to point out the various forms in which it becomes manifest. This becomes important when the various dimensions of human well-being such as health, access to clean water, education and other subjective dimensions of life such as self-reported well-being and happiness are considered. Bribery A number of writers are in agreement that this is the most common and frequently occurring corrupt practice. Bribery is a payment, in money or in kind, that facilitates a corrupt relationship. It could be a determined sum of money or quantified percentage of a contract on behalf of the state or public enterprise which distributes benefits to individuals, businessman or clients connected with the system. In South Africa, this was later termed ‘tenderpreneurship’ as a result of the activities of politically connected individuals who benefited illegally through the government tender system. In Zimbabwe, individuals with connections to politicians have formed cartels in the fuel , maize or grain distribution chains, government subsidized agricultural inputs and major government capital projects. Various parliamentary portfolio committees of the Zimbabwean government have proven the existence of these cartels, exposing the damaging effects on the economy. Zimbabwe’s office of the Auditor General has been consistent in exposing the apparent cases of bribery, often done covertly, in the public tender system. Fraud Masri (2006) explains that fraud involves manipulation, distortion of information, facts and expertise by public officials who seek to draw private profit. The discipline of

law identifies three types of fraud, namely, actual, criminal and bank. Actual fraud according to The Black’s Law Dictionary is a concealment or false misrepresentation through a statement or conduct that injures another who relies in it in acting. Criminal fraud is that which statute has illegalized and subjects the offender to criminal penalties such as fines and imprisonment. Bank fraud refers to the criminal offence of deliberately executing or attempting to execute a scheme or artifice to defraud a financial institution by means of a false or fraudulent presence, representation or promise. A case in point in Zimbabwe is that of 1998 when the United Merchant Bank in the widely reported Boka Banking Scandal floated fake or fraudulent Cold Storage Commission bills. This caused serious problems in the payments system of the country when a number of politically exposed persons (PEPs) drew out large and unsupported loans thereby depriving innocent and unsuspecting depositors of hard earned savings. Many banks like Century Bank, Intermarket, Trust Bank folded in subsequent years due to malpractices like insider loans all bordering on fraud. Public enterprises like the Zimbabwe National Roads Authority (ZINARA) have been in the news recently for wrong reasons as directors and management fleeced the parastatal through underhand dealings.

Embezzlement This involves the illegal taking or conversion of money and property by those who are not entitled to them but who abuse their proxim

ity to power and influence. The Grain Marketing Board of Zimbabwe resources have been used to enrich politically connected and public officials: one example is the diverting of subsidized grain and roller meal meant for vulnerable groups to the black market and high rewarding export markets like the Democratic Republic of Congo.

Extortion and Abuse of power According to Makumbe (2009), extortion and abuse of power account for 14% of corruption in Zimbabwe. Extortion is an act of utilizing one’s access to a position of power and knowledge, either directly or indirectly to demand unmerited cooperation or compensation as a result of coercive threats. Abuse of power is the improper use of authority by someone holding public office. There have been reported cases in public utility enterprises like Zimbabwe Electricity Supply Authority (ZESA) and Zimbabwe Broadcasting Corporation (ZBC) where some directors and managers coerce and improperly use their authority to gain financial favours from service providers. During the Zimbabwe Land Reform Programme, there were many reported cases of mainly white farmers who were coerced into paying large sums of money as ‘protection fees’ in order to save their farms from invasion.

Nepotism/Favouritism This is the granting of positions and or benefits to relatives and friends regardless of their abilities. Nepotism happens when

officials favour relatives or friends for positions in which they (the officials) hold some (or sole) decision making authority. Whilst there are many such cases in the private sector, their occurrence in the public sector is prominent because of the extant and prevalence.

Drivers of Corruption i)Bureaucracy In a number of countries and especially in developing countries like Zimbabwe, the role and functions of the state are executed through the use of a host of rules and regulations. For example all business processes require licences, permits and authorisations where more than one government department is involved. The International Monetary Fund (IMF) notes that regulations and authorisations provide a monopoly to officials who have authorization and inspection power. Whilst bureaucracy is necessary in the conduct of public affairs, if left unchecked it creates space for arbitrage activities by corrupt officials who deliberately delay processes for purposes of extortion. Reports are awash in the public media of how citizens struggle to access essential documents like birth certificates and passports. The system is fraught with middlemen and facilitators who are connected to influential people.

ii)Weak Governance Systems The lack of political will in instituting necessary reform of the public service in developing countries has resulted in institutional controls becoming a

hindrance to economic development. Power is centralized in one or very few people, resulting in bottlenecks and long delays in decision making. Corruption has become institutionalized in a number of public enterprises characterised by weak rules, too much discretionary powers and lack of transparency. There really is no incentive for good behavior. It has now been tacitly accepted in Zimbabwe that ‘mbudzi inodya payakasungirigwa’(one benefits from what surrounds them).

iii)Transparency of Rules, Laws and Procedures Nyoni (2017) notes that rules define the standards on how people interact with each other and it places constraints on the behavior of individuals and that of the group and broader collective. Rules in themselves do not prevent the possibility of corrupt activities and yet the absence of such rules creates the ideal conditions for corruption. In Zimbabwe, the lack of the rule of law and administrative predictability contributes to corruption. The ruling elite and their cronies have captured state enterprises and use this as a power retention and consolidation mechanism. Politicians at the national and local level regard their positions as vehicles to economical self-sufficiency, thus the end justifies the means. The ethical capital of most public officials in Zimbabwe is very low because power is regarded as an escape route from poverty and other challenges associated with non-performing economies. Effects of Corruption on the economy Since gaining political independence in 1980, Zimbabwe has been dogged by many corruption scandals, for example Zisco Steel Blast Furnace Scandal of 1987, Willowgate Scandal in 1988, Housing Loan Scandal of 1999, VIP Housing scandal of 1996, and the yet unexplained diamonds and command agriculture scandals from 2013 to 2015. The painful effect of corruption in Zimbabwe, which the business sector has lamented, is the increased cost of transaction. In a highly corrupt society, because of low levels of information transparency, there is fertile ground for rent seeking behavior. Information asymmetry makes the prices of goods and services very high, and in all cases beyond the reach of the majority thereby compounding vulnerability. Zimbabwe scores lowly on the ease of doing business matrix because of red tape in public entities entrusted with facilitating investment into the country. Delays and barriers in granting licences and permits in fact results in capital flight. A 2017 Report by ZIMSTATS, a government agency showed that 71% (10 million people) of the Zimbabwean population was classified as living in

poverty. The gap between the rich and the poor is widening, and it is a grave source of concern because most young people are losing out on time as they miss out on opportunities. Most of the problems the country faces are traceable to corrupt tendencies and activities mainly in the public sector. The risk of civil strife is very high under the circumstances. With weak governance institutions, the country cannot meaningfully participate in the family of nations. With such a tag the country risks becoming a failed state.

Recommendations There seems to be renewed vigour in fighting corruption at the national level. The setting up of the Zimbabwe Anti-Corruption Commission (ZACC) and the current discourse on the development of a National Anti-Corruption Strategy in Zimbabwe are steps in the right direction. However there still lacks tangible political will to fight corruption as well as make the relevant institutions truly independent. Policy makers need to move from mere rhetoric to sincere and honest action in tackling corruption through convincing investigation and unabated prosecution.