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Sunday, 1 May 2011

Understanding Corruption in Zambia

By Chola Mukanga

A key feature of discussions about corruption is the tendency to treat corruption as a uniform phenomenon. Commentators often veer unconsciously from one form of corruption to the next without clarity. It is common to read a commentator say, “corruption is on the increase”, without explaining what is actually meant by the term “corruption”. 


The failure to distinguish between the many forms of corruption inevitably impacts on the quality of the public debate. In particular, it prevents accurate retelling of history and undermines the search for effective solutions. For example, until we understand the multi-faceted nature of corruption we won’t be clear whether corruption is worse under the Banda administration than it was under the Kaunda presidency. We also won’t be able to understanding the extent to which the supposed on-going fight against corruption is succeeding.

The Laws of Zambia (ACC Act No 42 of 1996) defines corruption as “the soliciting, accepting, giving or offering of a gratification by way of a bribe or other personal temptation or inducement, or the misuse of abuse of a public office for private advantage or benefit”. This is a broad definition, with several vices falling under the term “corruption”.  This short essay examines five of these vices as reflected in our society: bribery; public theft; political corruption; wilful mismanagement; and, nepotism.

A culture of bribes 
The most well known form of corruption in our society is bribery. Bribes are offered to facilitate transactions between parties. Politicians are often derided for suggesting that tackling corruption must start with each and every Zambian. What they usually mean is that corruption is a moral evil that can be prevented by anyone with a free will. Every Zambian is free to refuse paying / accepting bribes. That Zambians engage in bribery points to the moral bankruptcy of the nation as a whole. Bribery in Zambia is therefore not fundamentally a political problem but a social one.  We are a corrupt people. That is not to say that politicians have not played their role in creating and maintaining this bribery culture. Although bribery has always been with us it has undoubtedly got worse in the last 20 years under MMD rule. The culture of free market liberalism and emphasis on personal enrichment coupled with signals of public theft by the elite has ushered in the so called “Sangwapo” culture. Bribery is now not just accepted it is assumed. 
The precise scale of private bribes is always difficult to gauge. We know that one cannot get anything done in Zambia rapidly without some form of underhand payment, but how many bribes are paid annually? Data collection in this area tends to focus on public officials.  For example, in 2007, surveys showed that 1 in 5 businesses expected to make informal payments to public officials, while 1 in 3 expected to make gifts to secure government contracts. Those figures only apply to public officials. It excludes bribes paid to other businesses, non-government organisations and most importantly chiefs, who are undoubtedly the largest non-official recipients of bribes.
But are bribes damaging to the economy? The empirical evidence is mixed, but it certainly rules out the idea that bribery is beneficial. While bribes in a very narrow sense can speed up things and help entrepreneurs get on with wealth creation, in a broader sense, these bribes are obstacles to development. This is because the cumbersome procedures that bribes are supposed to help overcome are usually created and maintained precisely because of their corruption potential. Substantial resources are devoted to contesting the associated rents, which in turn leads to pure waste and misallocation of scarce resources.


Given the opportunistic nature of bribery the appropriate policy response is to remove the “opportunity” to bribe. At the practical level it means that if we want to stop police officers from taking bribes, we must move to eliminate the pointless road blocks that permeate our society. Similarly, we must remove excessive legislation that provides opportunities for businesses to bribe. Empirical evidence appears to show a strong relationship between bribery and various measures of excessive.


Robbing the poor
A key challenge in tackling bribery of course is detection. The same cannot be said for the other form of corruption – public theft. The general public may not know which official has greasy fingers until they are caught, but they can sense when public money has been stolen. We have come to call this public theft “grand corruption”, to reflect the often larger amounts of money stolen.
The Task Force on Corruption was predicated to investigate the alleged grand theft committed by the MMD administration between 1991 and 2001. The “grand” in the end has not quite fitted the original billing as the main suspect, Second President Frederick Chiluba, was subsequently acquitted of all criminal charges.
In recent months the theft charges have shifted to “administrative robbery”. Scandal after scandal appears to have once again caught public imagination. The list runs long, including the Ministry of HealthKapoka scandal”[i], Road Development Agency[ii], Zambia Wildlife Authority[iii], Zambia Police[iv], High Court of Zambia[v], Zambia Revenue Authority[vi], Ministry of Local Government[vii], Lusaka City Council[viii], Legal Aid Board[ix] and Water Affairs Department[x] . These and other cases have highlighted significant levels of administrative theft perpetuated by supposedly loyal civil servants.  Indeed, even the Task Force on Corruption was allegedly corrupt[xi]. Like the society at large, once again we find that the there’s a corrupt culture at every tier of government administration. 


Public theft cases continue to be met with uproar from the general public, much more than the systematic bribery which occurs at an equally larger scale. Whilst this may be due to poor detection of bribery, the inner sense of injustice offers a likely reason. Zambians may be willing to accept / pay bribes because they have erected a corrupt culture over the last two decades, but explicit public theft appears to run counter to the principle of natural justice. It violates access to goods and services which are inherently their right. By stealing, the official is robbing money away from the poor in a more explicit way than other forms of corruption. It is this aspect of public theft that causes much consternation across Zambian society.



Not all theft causes significant national damage, at least, in the short term. In most cases, money is merely misallocated and redistributed within the economic system. The most damage is done through capital flight, when money is stolen and siphoned out of the country, resulting in a drain from the economic system. Addressing this form of corruption requires a concerted approach among countries. Unfortunately, many developed countries have little economic incentive to prevent capital flight because they are content to see such money lodge within their banking systems. If all stolen money from Africa was returned many western economies would collapse.


Corrupt politicians
Not all stolen money is whisked abroad. Usually such money goes towards supporting political corruption. Since 1991, with the dawn of multi-party politics Zambia has witnessed an unprecedented rise in political corruption. Increased electoral competition has given many social actors especially chiefs’ unparalleled opportunities to emerge as "kingmakers". Their place in society allows them to trade (tribal) voting blocs in exchange for significant sums of money, investment in chiefs’ places, new vehicles and other things designed to capture their support.


During the 2008 presidential bye-elections, Chief Mwene Kahare was rounded up with other Nkoya chiefs to meet the then MMD presidential candidate Rupiah Banda. Unfortunately, the chief found himself lodged in cheaper accommodation than he expected, which prompted him to voice his disappointment : "Those who are always flying, the MMD, had to dump us in those lodges in Kaoma and we were even starving....In the morning, it was just an order from the District Commissioner's office that 'you take them back'. I feel that was very disappointing".  But it’s not only chiefs who are bought. Mr Rupiah Banda achieved fame in Katete not for co-opting chiefs but for alleged “food based corruption”. There was general public condemnation when pictures surfaced showing Mr Banda distributing food to potential voters.  

The Katete incident now stands as the high point of exposing political corruption. Generally, buying the electorate either through chiefs or directly has not attracted public disgust as other corrupt vices. A key reason is that political corruption is seasonal. It tends to occur only when an election is called. This effectively turns it into a “one shot game”, with little incentive for people to report. People usually prefer to “eat” since the opportunity does not arise often. The other reason of course is that even when people detect political corruption, the lack of enforcement mechanisms acts as a huge disincentive to report such activities to authorities. As a general rule detecting and reporting corruption suffers from a free riding problem.  Why report something that will bring you into conflict with the powers that be?  

Lobbying for poverty
A key determinant of successful electioneering is campaign finance which is usually sourced from multinational companies that lobby policy changes. In its purest form lobbying is perfectly legal as it simply seeks to influence legislators to see the merit of a given policy proposal. We all lobby politicians all the time. The problem is the specific form of lobbying which allows people with particular interests who represent a minority to gain special access to government, and through monetary contributions and favours, develop controversial relationships with government leaders or institutions. This constitutes a form of back door corruption, which is very prevalent in Zambia.


One of the interesting historical questions is the extent to which the assumed reduction in public theft under the Mwanawasa administration was merely substituted by foreign lobbying. Recent empirical evidence[xii] shows that there's certainly influence peddling going on in Zambia by many multinational firms, which has affected industrial competition and productivity. There’s no better example of this than the government failure to effectively implement a fiscal regime for the mining industry, in face of very strong arm twisting[xiii]. Mining has always been a sphere of intense lobbying at much expense to the poor. Report after report[xiv] catalogue the clouds that still hang over the now abolished Development Agreements (DAs), which to date has not been lifted through a credible public inquiry.

DAs sympathisers would of course say that the problem was not lobbying, but poor mismanagement on part of government. The argument is that often public officials suffer from significant asymmetric information which puts them at a disadvantage when negotiating a deal. Edith Nawakwi typifies this posture when she appealed to ignorance in justifying the sale of mines at giveaway prices, “We were told by advisers, who included the International Monetary Fund and the World Bank, that not in my lifetime would the price of copper change. They put production models on the table and told us that there was no copper in Nchanga mine, Mufulira was supposed to have five years life left and all the production models that could be employed were showing that, for the next 20 years, Zambian copper would not make a profit. [Conversely, if we privatised] we would be able to access debt relief, and this was a huge carrot in front of us - like waving medicine in front of a dying woman. We had no option [but to go ahead]”. No one seriously believes Nawakwi’s poor attempt to shift the blame on the IMF / World Bank, but it does illustrate that often those in government are only too ready to plead incompetence rather than the more serious charges of conniving with foreign forces to defraud the State of Zambia.


In recent times, similar challenges have emerged for external observers or law enforcement agencies in being able to distinguish between corruption and pure mismanagement. In 2009, the Auditor General revealed that, “the Zambian mission in Brussels [in 2007] spent over K1 billion on school fees, but the payments were not supported by invoices and receipts”. Is this a case of not following proper management practices or theft of public funds?



Another celebrated case relates to the famous purchase of hearses, which were allegedly bought at an inflated price of $29,000 per hearse when the actual price was only a third of the amount quoted. The late Minister Tetamashimba after much political pressure declared: "I believe that there were irregularities in the transaction and if it is proved that the price of the hearses was not inflated and that the terms of conditions were adhered to, I will resign as minister on principle". The case has now gone quiet and the public still waits to understand whether it was a simple oversight by civil servants or a more elaborate plan to defraud the Zambian people.

A renewed enemy
Financial reward is not the only motivation for corrupt activities, other considerations usually come into play – as is the case with nepotism, the favouritism granted to relatives or friends, without regard to their merit (tribalism, regionalism and other isms probably also fall within the scope).


Town clerks are not headline makers, but Livingstone Town’s George Kalenga hit news headlines in 2007 when in a letter to all heads of departments at the council, warned : “I have observed for quite sometime now that the phenomenon of employing relations in this council, especially those falling in the category of ‘casual’ is on the increase….This sort of scenario is to a greater extent contributing to the poor performance by the said category of employees who are supposed to carry out specific duties because of our personal attachment to them”. What followed was a surprisingly intense debate on the scourge of nepotism. Until recently nepotism was rarely discussed in the press. Everyone knew it was there but it was not a feature of political dialogue. The traditional nature of our society is one where family relations often dictate economic and social arrangements in our villages. We might even go further to say that the prevalent nature of nepotism may well be a function of undeveloped impersonal forms of exchange. The market has not fully taken hold at every level of our society and thus instead of competing on merit in every sphere, we are tied to relying on family members, etc.



In the broader scheme of things, Mr Kalenga’s sentiments appears to coincide with a growing realisation in the Third Republic that the destruction of the “One Zambia, One Nation” motto under the Chiluba Administration, was giving way to an undercurrent of growing regionalism which appears to have culminated in the emergence of the so called “family tree” under the 3rd Republican President Levy P Mwanawasa. Mr Mwanawasa achieved some positive things during his tenure, but undoubtedly many will also remember his legacy, rightly or wrongly, as nepotistic. A fact he never run away from. When quizzed publicly over his nepotistic tendencies, President Mwanawasa’s rehearsed rhetorical response was: “do you guys expect me to appoint or help my enemies?”  No, Mr President, but the public expects you to appoint people on merit.

In many ways nepotism is worse than other forms of corruption for three reasons. First, as we saw under the Mwanawasa era it can give rise to worse evils. It was during the Mwanawasa tenure that the concept of “Lambaland” emerged which has led to rival identities developing (e.g. Bembaland, Tongaland and Barotseland). Nepotism, regionalism and tribalism are now prevalent and are threatening to tear Zambia’s nationhood. Nepotism unchecked therefore is an existential threat. Secondly, nepotism substantially weakens lines of authority and promotes incompetent people over those who are better qualified, inevitably turning the institutions of government into personal toys. Finally, it does not just misallocate resources but it also inevitably discriminates against capable individuals, in favour of less competent family or tribal relations. Unfortunately, its ‘quiet’ nature also makes it much more challenging to tackle. This must change if Zambia is to make substantial headway and preserve the unitary state.


So what are we to conclude? As one reflects between the many vices of corruption, it becomes readily clear that as a nation we face significant challenges in eliminating corruption. The rise of the political and economic liberalism in 1991 has spawned a new culture of corruption which has been overseen by those in power. The new politics brought new electoral competition which led to greater political bribery and intense lobbying from foreign investors and other groups.  Privatisation led to culture of irresponsibility with significant public theft which continues to persist. It has taken two decades to build a culture of corruption it will take longer to destroy it. Culture is resilient.  We should be upfront that corruption will always be here. Nepotism, public theft and other banes will always exist. The question is one of scale. In our reading of history and the quest to develop mechanisms for combating this social evil it is vital that we deepen our understanding of the complex issues involved. Blanket assessment of corruption makes headlines, but it does not help move the country forward. This essay is an attempt to broaden this understanding and steer discussion in the right direction. We have become a corrupt nation, and only with understanding can we begin to reverse the corrupt culture.



Chola Mukanga is an economist and founder of the Zambian Economist which provides independent economic perspectives on Zambia's progress towards meaningful development for her people

Copyright: Zambian Economist, 2013
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4 comments:

  1. I have a problem with the idea of bribes as a moral failure, mainly for two reasons.

    1) Wages vs cost of living

    If the cost of living is $600 a month, and you're paying someone $200 a month, how are they supposed to make ends meet? Why would they keep showing up at work, let alone full time? If people receive part time wages for a full time job, who is being immoral? You could say that they should be 'selfless' in doing their job, however, when they have responsibilities of their own, like wifes and children, who would go without food or heating, are they being selfless while being selfless?

    But is the government being selfless in not paying it's workers their full wage? Especially when they take bribes not to collect taxes, thereby forfeiting the country revenues that should be going to paying the civil servant's wages?

    Also, think of it this way - there are parts of the USA where you are expected to tip 20% of the bill. The reason is that the person gets paid very little, and is supposed to make the rest from tips. Waiters, strippers, etc. live almost entirely on tips, and some make a very good living out of it. My question is - how is this different than paying a bribe? If the government pays a civil servant so badly that they need to live on tips, who is being immoral?

    At some point, tipping/bribery becomes an alternative system of compensation. It may even have the positive effect of expediting service delivery, or making a civil servant pay attention to what has to be done.

    2) Deferring responsibility by government

    If the argument is that 'we're a corrupt people', then you're already throwing in the towel. Also, government is no longer responsible, because who can change the heart of man? You would need a second coming of Christ, not better compensation and monitoring of expenditures.

    ReplyDelete
  2. Conclusion

    When something doesn't work, but it is done over and over, my first idea is that - it may be a failure, but it is working for someone.

    The same with structural adjument programmes from the IMF/WB. No country has ever done well after structural adjustment. The people revolt, economies are destroyed even further, there is massive urbanisation and emigration out of the countryside, the manufacturing base is annihilated. People even vote former communists back in (Daniel Ortega). And all the IMF/WB does is move on to the next disaster. Now at no point in the last two decades has anyone still working for the IMF said - we were wrong, ESAP/SAP/etc. doesn't work?

    But it works for someone. It works for the trillionaire bankers who get to privatise state assets and get their hands on mining deposits.

    The same with corruption. Corruption benefits the few who have the money to pay, and works against the poor who have the right to expect basic services free of charge.

    However while doing so, it maintains the status quo of a poor general population, a small connected national elite and extremely rich foreign mining companies who get far more than they pay, because national politicians are basically providing them with access to wealth they do not own - Zambia's copper belongs to the people of the country, not the party in government or the president.

    So what is disfunctional to the majority, continues because it is very functional to the few.

    This has nothing to do with moral failings. It is systemic, and it doesn't really matter who is in that system, until someone changes the system without getting killed in the process (Patrice Lumumba, Trujillo, etc).

    It is also ideological. The Neoliberal Ayn Rand notion of selfishness and egotism as a virtue, even the highest virtue, that drives society and progress is very easily adopted by those who are just in it for the money.

    I don't know if anyone has yet seen the new movie Atlas Shrugged, but it sort of lays out the mindset. As does the movie Wall Street (Charlie Sheen, Michael Douglas, Daryl Hannah) through the Gordon Gekko character, although Oliver Stone is of course much more conscious of the problems with the ideology. The best in my view is at 1990s tv series called Profit, starring Adrian Pasdar, Keith Szarabajka, Jack Gwaltney, Lisa Blount, Lisa Darr, Sherman Augustus, etc. In my opinion the best tv series ever made.

    ReplyDelete
  3. Please find an alternative site to host your PDF documents as we cannot download the articles with Scribd unless you expect us to buy them which wouldn't make any ounce of sense. Most of us cannot be online long enough to read through the entire document, a majority of us use internet cafes and it need not be mentioned how expensive they are.

    ReplyDelete
  4. Cholwee,

    If there are specific documents you need to read - simply email us and these can be sent to you.

    Thanks!

    ReplyDelete

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