The economic impact of the COVID-19 emergency has caused unexpected and dramatic disruptions in global supply chain. Rapidly changing government policies, restrictions in mobility, and unpredictable customer demands stemming from the health crisis have battered logistics networks and put severe strain on businesses. Troublingly, these disruptions have heightened the appeal of corrupt and unethical practices like price gouging, employee fraud, and avoidable mass layoffs and increased incentives for businesses to violate health, quality, and procurement regulations.
COVID-19 will not be the first crisis to lead to a documented rise in corruption. As Zimbabwe reeled from the destruction unleashed by Tropical Cyclone Idai in March 2019, civil society groups documented government responses fraught with corruption and embezzlement. These resulted from a lack of transparency in public expenditure, the politicization of human aid, and inadequate procurement procedures. Today, the same problems are afflicting numerous countries as they have responded to the COVID-19 emergency.
These forms of corruption follow a clear causal logic. In a crisis, governments must accelerate public spending in order to provide an effective response. As standard procurement timelines and processes are either amended or abandoned, government officials are given unprecedented discretion over the use of public funds. Simultaneously, supplier scrutiny and accountability measures are reduced, increasing opportunities for the misuse of funds post-procurement. As government funding is embezzled or misused, government emergency responses are weakened.
As officials and suppliers find ample opportunities to cheat, embezzle, and redirect emergency funding, those who suffer are often those who need the funding the most. In many African countries, these problems are compounded by the scarcity of reliable social welfare data. Furthermore, research shows underrepresented citizen and small business groups are among those most harmed by corruption. In a recent brief entitled Stolen Dreams: How Corruption Negates Government Assistance to Nigeria’s Small Businesses, Mathew T. Page and Celestine Okeke document how embezzlement in Nigeria eroded a government-financed small business program.
Moreover, appropriate scrutiny and accountability measures should allow governments to respond more effectively in a crisis. Thus, it is discouraging that some governments are using the COVID-19 emergency as a pretext for rolling back anti-corruption gains and weakening already fragile accountability mechanisms. This occurred recently in Nigeria as the national budget was revised to boost COVID relief spending while cutting funding for two anti-Corruption agencies, the Code of Conduct Tribunal (CCT) and the Independent Corrupt Practices Commission (ICPC), by 89% and 58% respectively.
Help On The Way
The Center for International Private Enterprise’s (CIPE) is committed to strengthening public accountability and integrity during the COVID-19 pandemic. CIPE’s anti-corruption rapid response model is designed to provide speedy and targeted interventions to support civil society groups who are strengthening fragile integrity systems. In line with this commitment, CIPE is excited to announce four projects in Ethiopia, Ghana, Kenya and Zimbabwe where four organizations will receive a $20,000 grant each to implement tactical interventions to mitigate corruption. The interventions will include tracking and monitoring of emergency relief, enhancing procurement transparency, and strengthening business integrity corporate accountability.
To achieve sustainable change, CIPE’s anti-corruption programs strategy follows a business-led approach designed to influence the social and economic dynamics that enable corruption. By empowering business communities to reinforce business integrity and a culture of compliance with governance controls and anti-bribery and corruption principles, organized business can drive systemic change through collective and collaborative action with government and civil society. Business advocacy for reform to solve corruption problems is a hallmark of CIPE’s programs. Consequently, the four grantees will leverage CIPE’s full range of business-led anti-corruption resources, tools, and capacities in building collaboration with civil society, government and diverse stakeholders to implement these projects.
We are excited to support the four winning grantees that will be kicking off the following projects in August 2020:
The Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA) will support a whistle blowing/confidential reporting system for businesses and citizens to report corruption problems during the emergency period related to the emergency response. This will be followed by a study and survey designed to map corruption risks during an emergency with the aim of providing recommendations to the government for managing the current crisis and a playbook for handling future emergencies. As a member of the CIPE established Africa Anti-Corruption Compliance Network (AACN), AACCSSA will engage the business community actively in dialogue and capacity building about responsible business conduct and business ethics during an emergency. This will enable AACCSSA to build business consensus on anti-corruption reforms and business integrity standards to be adopted by the business community in Ethiopia.
Ghana Integrity Initiative (GII), the Transparency International Chapter in Ghana will conduct a social intervention research and advocacy project starting with a corruption risk assessment on the of government emergency relief efforts across the board. This would include a review of the stimulus packages, emergency procurement protocols, emergency oversight and audit mechanisms, effectiveness of the communication and monitoring plans analyzing data sets from multiple stakeholders. GII will engage with diverse stakeholder groups collaboratively to develop this study report and make recommendations to the government and private sector to ensure inclusiveness, effectiveness, efficiency, integrity, transparency, and accountability in government emergency response now and in the future.
Milestones Resources Solutions (MRS), one of two grantees in the Africa Anti-Corruption Compliance Network (AACN), will lead business advocacy efforts for targeted procurement reform in Kenya leveraging existing capacities in ongoing projects and networks in Kenya. MRS will build consensus with the organized business community and targeted government agencies to implement specific recommendations that enhances transparency and business accountability for companies participating in public procurement process.
Transparency International (TI) Zimbabwe will set up a publicly accessible tracker with a dashboard to monitor government relief fund receipts, expenditures and resource utilization to scrutinize processes and ensure that resources reach the targeted communities. 90% of Zimbabweans work in the informal economy and have been heavily affected by lockdown; this project will aim to ensure that relief funds reach them more effectively and transparently. To amplify this effort, TI will collaborate with investigative journalists to conduct research, keep citizens informed, and hold public officials accountable. The analysis of data from the expenditure resource utilization tracker and journalist research will provide data for procurement reform recommendations. This will strengthen advocacy for procurement reform in Zimbabwe.
Lola Adekanye is CIPE’s Nigeria-based Program Officer and leads anti-corruption efforts in 16 African countries.
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