British Firms Underplay Zim Corruption

HEADS of British multinational companies have made startling disclosures that appeared to suggest they were comfortable with the level of corruption in Zimbabwe, saying sleaze in the country was insignificant and therefore not a big bother.

In a report titled Zimbabwe Scoping Report by the Foreign & Commonwealth Office prepared by British Expertise, some British firms operating in Zimbabwe are said to have argued that it was possible to run operations in the country “without encountering corruption issues”.

Although the companies put this down to anti-corruption training to their workforce, the suggestion appeared to fly in the face of growing public concern that the scourge had become endemic in the country, undermining the economy and plunging many into abject poverty. The report by British Expertise, which was gleaned from a dinner held with British company representatives in October, said there was a feeling corruption in Zimbabwe “existed primarily as petty corruption”.

The report highlighted, though, that some of the executives with the British multi-nationals believed corruption “was on a more institutionalised scale, particularly in the civil service”. “The delegation were advised that as a consequence of the complex political and power structures in the country, it is possible to encounter interlocutors who may assume powers they don’t have from a legal perspective. That said, it was argued that you ‘absolutely can’ run your operations in Zimbabwe without encountering corruption issues, especially if you run ‘bottom-up’ anti-corruption training throughout your workforce,” the report said.

The visit by the British Expertise delegation was the first by representatives of the British government to embark on an official tour of the country meant to explore business opportunities since a fallout between the British and Zimbabwe governments over expropriation of white-owned farms by President Robert Mugabe’s government in 2000. It came against the backdrop of warming relations between Zimbabwe and the European Union (EU), which imposed sanctions on Zimbabwe over alleged human rights violations.

Apparently, the British government and the EU partners are undertaking a policy of increamental engagement with Zimbabwe, with the UK, which President Mugabe accuses of taking a bilateral dispute with Zimbabwe to the EU and consequently influencing sanctions against his government, taking a number of “confidence building measures” with the Zimbabwe government. The visit by the British delegation was part of these confidence building measures.

Transparency International Zimbabwe (TIZ) said Zimbabwe was ranked number 156 out of 175 countries surveyed in the 2014 Corruption Perception Index (CPI), highlighting that corruption remained endemic in the country. Although the score on the corruption index was an improvement from last year when Zimbabwe was ranked 163 out of 176 countries, making it one of the most corrupt in the world, TZI said this year’s “low CPI score remains indicative of the fact that corruption remains an entrenched problem in Zimbabwe”.

“Zimbabwe needs to prioritise the anti-corruption fight. TIZ believes the realisation of the Zim-Asset (Zimbabwe Agenda for Sustainable Socio-Economic Transformation) objectives can only be possible if government is proactive in implementing reforms on curbing corruption,” said TIZ.

Zim-Asset is a government blueprint aimed at turning around the country’s economy. The Zimbabwe Revenue Authority last year revealed that the country had lost approximately $2 billion due to graft, highlighting the depth of the effect of the problem on the economy.  The country has set up an anti-corruption arm to deal with the scourge that has been blamed for the ongoing economic crisis, but many believe the body has not acted on a number of high profile corruption cases.

British Expertise met five heads of British companies in Zimbabwe during their visit, as well as the Zimbabwe Investment Centre. Last year, the UK-based Department for International Development said corruption had escalated in Zimbabwe in the past decade. Transparency International (TI) has reported that corruption had “long-term corrosive impact on economic growth, equality and the quality of a country’s governance and institutional environment.

“Evidence indicates that corruption is likely to adversely affect long-term economic growth through its impact on investment, taxation, public expenditures and human development. Corruption is also likely to undermine the regulatory environment and the efficiency of state institutions as rent-seeking distorts incentives and decision-making processes,” said TI in a report authored by Marie Chêne.

It added: “Not only does corruption affect economic development in terms of economic efficiency and growth, it also affects equitable distribution of resources across the population, increasing income inequalities, undermining the effectiveness of social welfare programmes and ultimately resulting in lower levels of human development. This, in turn, may undermine long-term sustainable development, economic growth and equality.”

Critics said it was unfortunate that some British firms viewed corruption levels in the country as petty. “Some foreign firms are generally handled well and they may be spared, (but) corruption is actually pulling us down,” said Tapiwa Sibanda, an analyst at Trade Winds Advisory. – FinGaz

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