Statement by Vera Songwe United Nations Under-Secretary-General and Executive Secretary of the United Nations Economic Commission for Africa (ECA)

January 25, 2018

30th African Union Summit

32nd Ordinary Session of the Executive Council

Theme: Winning the Fight against Corruption: A Sustainable Path to Africa’s Transformation
Statement
By

Vera Songwe
United Nations Under-Secretary-General and
Executive Secretary of the United Nations Economic Commission for Africa (ECA)
Addis Ababa, Ethiopia
1-25-2018

Excellence, Monsieur Moussa Faki Mahamat, Président de la Commission de l'Union africaine ;
Excellences Mesdames, Messieurs les Ministres des États membres ;
Mesdames, Messieurs les Commissaires de l'Union africaine,
Mesdames, Messieurs les Ambassadeurs et Chefs de mission ;
Mesdames, Messieurs, représentants du secteur privé, de la société civile et des médias
Distingués invités ;
Mesdames et Messieurs ;

C'est un grand honneur pour moi de participer à la trente-deuxième session ordinaire du Conseil exécutif de l'Union africaine et de prononcer mon premier discours lors de ce sommet qui porte sur le thème très important de « Remporter la lutte contre la corruption : une voie durable pour la transformation de l’Afrique ».

C'est mon premier Sommet de l'Union africaine dans mon nouveau rôle de Secrétaire exécutif de la Commission économique des Nations Unies pour l'Afrique (CEA).

Comme vous le savez, Mesdames et Messieurs, promouvoir la transformation structurelle de l'Afrique à travers la diversification de nos économies est une priorité pour la CEA/ les Nations Unies. Nous nous félicitons d’avoir mis en place des mécanismes de soutien pour mieux accompagner les gouvernements africains dans la mise en œuvre de leurs politiques et programmes de développement durable et dans la bonne réalisation des objectifs dessinés par les Agendas 2030 et 2063.

Malheureusement, certains fléaux tels que la corruption qui sévissent dans plusieurs de nos pays Africains constituent un frein majeur aux aspirations de transformation économique et de développement durable. Permettez-moi, Honorable Ministres, de comparer la corruption à un cancer qui tue à petit feux les politiques, économies et sociétés africaines. Et la seule cure durable à cette maladie, c’est à nous de la trouver et de la définir.
Aujourd’hui nous sommes tous impressionnées par les paroles du Président Trump mais Il y a de cela, à peu près dix ans, le Président Français disait ceci de l’Afrique.
« Le drame de l'Afrique, c'est que l'homme africain n'est pas assez entré dans l'histoire. Le paysan africain, qui depuis des millénaires, vit avec les saisons, dont l'idéal de vie est d'être en harmonie avec la nature, ne connaît que l'éternel recommencement du temps rythmé par la répétition sans fin des mêmes gestes et des mêmes paroles. »
Dans cet imaginaire où tout recommence toujours, il n'y a de place ni pour l'aventure humaine, ni pour l'idée de progrès.
Si nous pensons à la question de la corruption nous avons l’impression que nous sommes toujours en train de commencer la lutte contre la corruption et que nous n’avançons pas à grands pas.

Honorable Ministers,
Ladies and Gentlemen,

Over the past few months living in Addis I have experienced the heartbeat of one of Africa’s most vibrant capitals. But when you the leaders of continent descend on Addis, it gives it a whole new flavor.

I am indeed privileged to be standing here today as a part of this Addis yearly symphony.

We come here to remind ourselves of the struggles our forefathers waged to set us free. We come here to recommit to building our continent and our union and to reaffirm our collective aspiration for a better sun rise.

But as surely as the sun rises on Africa the scourge of corruption continues to dim its light.

To restore resolute confidence in our shared future and the dreams of a brighter day for our youth and all our citizens we cannot but commit to fight against corruption.

Honorable Ministers,
Ladies and Gentlemen,

Yesterday as I was working on this speech I learned that one of Africa’s great freedom fighters passed away.

Someone who used music to tell us about the struggle for a better Africa.

Hugh Masekela. Hugh was one of the best we had. If you permit I wish to honor his work. He sang many a song about the Africa we want. As a tribute to him and many others we must carry the message further.

Ladies and gentlemen,

The only logical and winning formula for true independence and for a transformed Africa is that we collectively conquer corruption.

How can we get the Africa we want?

When we let our most precious assets drown quietly in foreign waters and thirst for freedom under the unforgiving heat of the dessert because of corruption?

Where is the Africa we want?

When our youth do not believe their leaders and their institutions to deliver what they need most, when that social contract is broken.

How can we get the Africa we want?

When women in rural Africa cannot get access to land and collateral to feed their families and ensure good health for their kids, because of corruption?

How can we get the Africa we want?

When our mothers perish in hospitals every day because medicines are not available and or because they must pay a bribe to get treatment?

How can we get the Africa we want?

When access to electricity in many of our countries is constrained because of poor contracts, badly negotiated deals that penalize our competitiveness, because of corruption.

How can we get the Africa we want when we let billions leak out of the continent only to spend time begging for minimal sums because of corruption?

Corruption we must admit has held us back for far too long.

The injustice of corruption brought to life within our institutions is more powerful than any other injustice we as Africans could face.

But it is within our remit to repair this cancer, that is why I applaud the African Union for taking on this theme as the main battle cry of the union for the next year.

Our course as Africans has been a troubled one and many a time our courage has been tested. But we have prevailed and we stand here in Addis Ababa today because those who came before us fought for the future.

We are at a cross road – the youth are waiting, desperate and anxious for what path the leaders gathered here today will allow them to chart?

That is why the topic of corruption or anti-corruption is so appropriate.

Honorable Ministers,
Ladies and Gentlemen,

Africa has recently embraced two very important transformational Agendas – the 2030 Agenda which aims to leave no one behind and Agenda 2063 at the global and regional levels respectively and we are also working on the reform of our union. As you are well aware, successful implementation of these agendas requires substantial financial resources, most of which must necessarily be mobilized from within the continent. What this means is that the continent cannot afford to continue to suffer from the kinds of financial leakages it has had to contend with over the past several years through various forms of corrupt acts and practices.

Placing the fight against corruption at the top of the agenda of our continental organization is a step in the right direction considering that nearly half of the population on the continent believes that our governments have either failed or been unable to properly address the complex and wide-ranging impacts of corruption on resource mobilization, resource allocation and development outcomes on the continent. In 2015 for example, the Global Corruption Barometer estimated the ratio of Africans who perceived corruption to be on the rise to be 58 %. Similarly, in 2017, the Ibrahim Index of African Governance reported a “large deterioration in corruption and bureaucracy” (a sub-category of Accountability) across the Africa region over the past five years, a decrease from 44% in 2012 to 37% in 2016 which is a 7 percentage point decline, even as the region registered a slight improvement in terms of corruption investigation, from 31.9% in 2012 to 32.3% in 2016.

Why is the fight against corruption so critical for Africa?

There is general consensus about the threat posed by corruption to the effectiveness of national governance. Corruption, especially Grand corruption, is considered as a major governance challenge and an impediment to African countries’ ability to effectively and efficiently mobilize resources needed for their economic development and transformation. Corruption has also been found to impede economic performance, lowered institutional efficiency, and discouraged investment, thus affecting countries’ capabilities to implement their development plans. Similarly, weak governance institutions, poor accountability, weak audit and oversight institutions, as well as pervasive influence from the executive are underlying institutional deficiencies that have tended to exacerbate corruption on the continent.

It has been estimated that an increase of corruption by about one index point reduces a country’s GDP growth by 0.13 percentage points. The African Union itself has estimated that every year over US$ 148 billion are drained out the continent through various corrupt activities and acts, representing about 25% of Africa’s average GDP. This is a real problem for Africa. For instance, we observed this in Guinea Bissau during the period 2011-2013, when the country’s score in the Control of Corruption section of the Worldwide Governance Indicators dropped from a percentile rank of close to 12% in 2011 to 4.74 % in 2013. During that same period, Guinea Bissau’s GDP growth rate dropped from 9.33% in 2011 to 0.82% 2013. This period coincided with the 2012 coup d’état, and was characterized by political instability, weakened public administration and inefficiencies in public financial management.

Another interesting and positive example is Angola. Between 2009 and 2012, Angola’s efforts in controlling corruption has improved (from a 2.39 percentile rank to 7.11%), which might have contributed to the increased GDP growth rate of 7.11% in 2012, compared to 2.39% in 2009. Angola’s improvement in governance has also contributed to an increased flow of foreign direct investment, which reached 5.98% of GDP in 2013, from 2.90% and 2.92% in 2011 and 2009.

Honorable Ministers,

There has been some progress. But not enough and not fast enough. I wish to congratulate many African governments for the achievements in improving their governance trajectory, implementing anti-corruption reforms, strengthening anti-corruption organs/institutions, and increasing awareness on the negative effects of corruption. In countries such as Botswana, Cape Verde, Lesotho, Mauritius and Senegal, the perceived levels of corruption in the public sector institutions have been on the decline.

We have seen the institutionalization of public financial management reforms including more participatory budget preparation; restructuring of national revenue administrations; streamlining procurement processes and strengthening oversight institutions.

Moreover, the establishment of Parliamentary Public Accounts Committees has improved the oversight function of the legislature. Countries are increasingly demonstrating more transparency in monetary policies and improving the auditing of public funds. Between 2005 and 2015, about 30 African countries improved their budgetary management scores. E-government mechanisms are taking root within public administrations in Africa. Countries such as Cabo Verde, Kenya, Morocco and Rwanda are notably improving public services through digital innovations. We highly commend the use of digital innovations to enhance effective use of public resources and better service delivery.

Ladies and Gentlemen,

Despite these inroads, corruption remains endemic - threatening the region’s transformation and sustainable development. Unfortunately, corruption has become so engrained in society fabric, and sadly in some sections of society it is becoming the norm rather than abominable. Embezzlement, influence peddling, favoritism or the illegal financing of political establishments and various forms of fraud, are increasingly normalized. Shadow public service systems of unwritten rules, which operate parallel to the established legal frameworks, are becoming acceptable. Recent assessments underscore that between 2007 and 2016, the continental average score for the corruption & bureaucracy indicator has declined by a concerning -8.7 points over the last decade, with 33 countries registering deterioration. These include Madagascar (-35.60 points), Eritrea (-26.81 points), Mozambique (-17.65 points), Mauritania (-12.35 points), Liberia (-11.42 points) and Libya (11.68 points), just to name a few.

In Africa, grand corruption lies at the heart of the nexus between governance and illicit financial flows (IFFs). As the High Level Panel led by Former President of South Africa, Thabo Mbeki, found, a staggering $1 trillion flows illegally out of developing countries annually due to crime, corruption and tax evasion— close to ten times the amount of foreign aid flowing into these same economies. IFFs are most prevalent in our natural resources. More than half (56.2 %) of the IFFs from the African continent come from oil, minerals and precious metals.

In terms of trade, many studies have demonstrated that increased trade restrictions such as tariffs and quotas, provide public officials with higher discretionary powers that are instead used for rent-seeking activities. Customs and border officials often operate in remote posts that are geographically dispersed, with relatively few staff and minimal supervision – a very conducive environment for corruption to thrive. For instance, in West Africa, it was reported that there are between 2 and 3 checkpoints per 100 km along corridors, and the bribes collected by customs, police, gendarmerie, and other uniformed services range from US$ 3 to US$ 23 per 100 km (close to US$ 200 per average trip).

Honorable Ministers,
Ladies and Gentlemen,

This year Africa will sign the CFTA. This aims to give life and hope to the dreams of our youth.

We know that 82 percent of all African migration is inter-African. We also know from studies done at the ECA that intra Africa trade which is rising is more value adding, creates more jobs, increases prosperity and helps our diversification aspirations more and faster. ECA estimates that the CFTA has the potential both to boost intra-African trade by 53.2 per cent by eliminating import duties, and to double such trade if non-tariff barriers are also reduced.

There with the CFTA Africa is arming itself with a tool for future prosperity, however this agreement will only be as good as our ability to combat corruption and allow for free and unencumbered movement of people, goods and services.

The CFTA can also produce more jobs for Africa’s bulging youth population as small and medium sized enterprises are able to penetrate regional markets and eventually overseas markets. Women, who constitute 70 percent of informal traders, also stand to benefit from the CFTA. This is because by reducing tariffs, simplifying trading and clearing procedures as well as reducing import duties, the CFTA makes it more affordable for informal traders to operate through formal channels, which offer more protection.

Regrettably, trade on the continent would not improve much with the current poor state of Africa’s infrastructure. We need our governments to focus on improving their PPP laws, making them transparent and ensuring contracts are indeed the most efficient.

Huge investments are needed to reverse ageing infrastructure and to reignite growth, deliver on the Sustainable Development Goals and reduce climate risks. A “fit for future” infrastructure would enable Africa to “leapfrog” the inefficient and polluting systems of the past and use this window of opportunity to deliver on inclusive economic growth, produce and use clean energy, plan and build resilient cities and enhance access to basic services whilst boosting human capital and quality of life. But this needs strong and transparent institutions.

Honorable Ministers,
Ladies and Gentlemen,

ECA has over the years worked with the African Union and the African Development Bank to design and support anti-corruption programs. We continue to support the APRM process and the work on Illicit Financial flows. We are also working increasingly with governments to improve their tax and customs processes.

ECA dedicated its fifth edition of its flagship report, the African Governance Report on the measurement of corruption, with a particular focus on the international dimensions of the scourge. Following this publication, ECA has partnered with the African Union’s Advisory Board on Corruption (AUABC) to initiate a conversation on developing an African-led and African focused measurement of corruption. This has been within the framework of the longstanding collaboration between ECA and the AU Advisory Board on Corruption, which saw the two institution develop and roll out a five-year anti-corruption program. The program produced a number of outputs including a Model Anti-Corruption Law, and a youth Essay competition, intended to groom youth ambassadors to champion the fight against corruption on the continent.

On behalf of the ECA team we pledge to support the African Union Commission and all the member states in enacting policies which could address the issue of corruption.

These includes working with member states to:

1. Strengthen their legal and institutional frameworks in the fight against corruption;

2. Improve fiscal transparency and good financial governance including improving the public procurement system, contract regime, tax system, and strengthening institutional audit and oversight capacity;

3. Support Citizens’ participation in areas like budget tracking and monitoring, performance of public enterprises, and the delivery of social services should be encouraged;

4. Support the implementation of the AU Convention on Preventing and Combating Corruption including strengthening the capacity of the AU Advisory Board on Corruption;

5. Global advocacy: work with African countries to call upon the advanced economies to fully committed to their obligations under the OECD Anti-Bribery Convention of 1997 and ensure rigorous enforcement. Indeed, pressure should be exercised on non-complying countries to ensure that firms fully internalize the risks of prosecution when deciding how to carry out business in African countries.

As President Obama said in Kenya in 2015: “Nothing will unlock Africa’s economic potential more than ending the cancer of corruption.” We commit to working towards this end.
I thank you for your kind attention.

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