Bribery, Myths and Reality on the African Continent – Part Two
Africa’s Right to Reply: On Corruption and entrepreneurs
Renee Horne – Johannesburg 25 April 2011
Last week, the World Entrepreneur Society (WES) published its topic of the week “Bribery, Myths and Reality, Why doesn’t the US do business with Africa?” There were two main reasons why the US largely does not consider Africa as part of its business plan: that African markets are too small: and Africa’s corrupt track record. This week, African voices respond on corruption on the continent, arguing that “the US is completely hypocritical, playing a holier than thou attitude”, that’s the word from Professor Adam Habib, Deputy Vice Chancellor of Research, Innovation and Advancement at the University of Johannesburg. Adding further weight to this stance is Dr Thami Mazwai, who heads Small Business Development at the University of Johannesburg, and who also owned the first Black Magazine publishing house in South Africa. Mazwai questions, why should we (Africans) worry about what the United States thinking of the African continent? This is the start of the WES series, “The African Business Voice”.
The Corruption Paradox
Habib argues that the US has many contradictions, “Companies invest so they can make a profit, the United States invests in Africa, by the way it's a myth that the US does not invest in Africa, it’s is absolutely nonsensical. The US invests in what it can extract. It has some of the most extensive investments in some of the most dubious countries in the world, including the African continent. So the fact that it is not involved in corruption is nonsensical. Think about it, the US has had relations with Pakistan and Egypt, with the Mubarak regime, so don't pull a holier than thou attitude. The point about it is that anybody who believes in this does not have an understanding of US investments on the African continent. Ask them to come to me and I will be happy to give them an empirical lesson on what kind of corruption the US companies are involved in on the African continent”. Mazwai argues that “I don’t believe that we should worry about that Afro-Pessimism because at the end of the day we are the Africans, not the US”.
BRICS Clean or Not
Last week, WES cited statistics from Transparency International’s 2010 report, indicating that South Africa is the least corrupt of the BRICS (Brazil, Russia, India, China, and South Africa) countries; however South Africa’s scores less than 50%, with a score of 4.5. The questions then arises, why has the US made India and China (with a score of about 3.5 respectively) some of their dominant business players? Habib argues, “the Chinese invest in two fronts: partly because they need resources and energy to fuel their economy, and secondly a cheap market for their goods so it directs these markets to Africa. So there are some questions to be asked about the Chinese. They are as corrupt prone as you can imagine but if the US is so concerned then why is it the largest investor in China, which is one of the most corrupt prone countries in the world? The US is a huge investor in India which is also one of the most corrupt countries in the world, so this is a myth”. But let’s not avoid the crucial issue; Africa has a bad reputation when it comes to dealing with corruption? “Of course we have a bad reputation. With due respect China has a bad reputation in the world yet it is one of the fastest growing economies in the world. Indonesia and India have bad reputations, the same as China, and so Brazil. Actually Mandela in South Africa had a good reputation and we still did not attract the kind of investment. So let’s be blunt, this kind of moralism that is being suggested is moralism to the extreme, it's hypocritical to the extreme”, argues Habib. It appears that Mazwai agrees, “Indeed we do have a lot of challenges and corruption is one of them, but show me one country which is corruption free and I am not talking about Africa, but I am also talking about other continents. You go to Asia, Europe and so on; there is corruption there although corruption appears in different forms whilst here in SA you will be accused of a corrupt act for facilitating a business transaction, but in Germany it may all be above the law. So they have legitimised corruption, so there are these double standards.”
The Business Game: Do entrepreneurs benefit?
Habib maintains that in the game of business it’s all about interest “Is this in America’s interest or in Africa’s interest? Well it depends, what kind of development, what kind of investment? If that investment is going to be invested in the patterns that it has been previously then it is not of benefit to Africans anyway because it will become an enrichment agenda for the US and political elites in Africa. It needs to be done in an inclusive way to create an inclusive developmental agenda rather than enriching the US. The only way out of this mess is for African leaders not to believe the Americans, not to believe the Chinese - play them off against each other so that you can maximise the best terms for your own development. That’s what African leaders need to do”. Mazwai said “Africans have got to address the challenges that we (Africans) face on our continent”. Both experts have lambasted the US stance on corruption, but agree that there is corruption in Africa just like in any other continent. However, if you talk to a young budding entrepreneur like Maureen Mosekwa who owns a bed and breakfast in Soweto, a formerly black disadvantaged area in Johannesburg, the business game is tough. “If you want my honest opinion it’s all those on the top that benefit. The man on the street does not benefit. Its people that have access to these programmes (government start-up initiatives, joint ventures etc.) who tell their “China” (friend) or their brother, their families etc., they benefit. I mean it’s a fact you read these things on a daily basis and in various newspapers”. So read on, next week when we bring you the story of Mosekwa’s business and more, in the “Africa Business Series”.