BY MUHEREZA KYAMUTETERA
Corruption leads to loss of public resources that would otherwise go into ensuring better services in sectors such as roads and health.
On December 9, Uganda joined the rest of the world to mark the International Anti-Corruption Day. The national theme, “Restoring Integrity in Public Service; Regaining Citizens’ Trust in the Fight against Corruption,” and the global focus of “United against corruption for development, peace and security,” appear different in many ways but, ultimately, recognize the same salient issue: corruption at all levels is a key inhibitor of economic development, poverty eradication and improved standards of living.
The national theme also draws particular concern that despite the various efforts by government and civil society, the public seems to have lost faith and trust in government’s genuine commitment to end corruption.
This public skepticism and cynicism is precipitated by cases where anti-corruption institutions are accused of corruption and other related malaise, including audit backlog. This has created a ‘big fish vs small fish’ syndrome; a situation where the public believes that corruption is only risky for a few individuals involved in small act of corruption, while the grand perpetrators walk scot free.
Weeks before the commemoration of International Anti-Corruption Day saw the release of The Uganda National Household Survey 2016/17 that showed that, at nation level, the number of people living in poverty increased by 51% from 6.7 million in 2012/13 to 10.1 million in 2016/17. This is a daunting and haunting reality that is made more nightmarish with the fact that it ends seven years of progress in fighting poverty that saw the number of people living in poverty decline from 8.4 million in 2005/06 to 6.7 million in 2012/13.
But here is the paradox: there has been a 136.3% increase in Uganda’s budget from UGX11.6 trillion in 2012/13 to UGX26.4 trillion in the 2016/17.
So where did all this money go?
To achieve the level of transformation that the Ugandan government envisages, the economists say the economy has to realize consistent average real annual GDP growth rate of 8.2%, translating into total GDP of about $580.5 billion, with a projected population of 61.3 million in 2040.
But, according to the World Bank Group, Uganda’s economy has grown at a slower pace in recent years; a reported 4.5% in the five years to 2015/16, compared to the 7% achieved during the 1990s and early 2000s. In 2016/17, growth slowed further to 3.5%, largely influenced by adverse weather, unrest in South Sudan (Uganda’s major regional export base), private sector credit constraints, and poor execution of public sector projects.
Although growth is expected to rebound to about 5%-5.5% in 2017/18, this still below the needed 8.2% growth levels necessary for Uganda to achieve middle income status with a per capita income of $9,500 by 2040.
In fact, having failed to meet its growth targets in the last 7 years, Uganda will now have to realize consistent double-digit growth to be able achieve its 2040 targets.
But what went wrong?
Several reasons have been identified for this dismal performance, many of them external, but there are hardly economists who have paid significant attention to the damning role of corruption in all this.
The hydra that has become corruption
According to the Inspectorate of Government’s Fourth Annual Report on Tracking Corruption Trends in Uganda 2014, 97.9% of Ugandans say there is corruption (82% very much, 15.9% slight). Although urban dwellers reported more corruption than rural folks, generally, there were no significant differences – between gender, age and level of education as well as region.
According to the March 2016 PPDA 3rd Integrity Survey Report, although the corruption perception index in public procurement rose minimally to 71.8% from 70% in 2009, bidder confidence stood at an all-time low of 22%; below the 30% baseline established in 2013/14 and obviously way below the 50% target for 2014/15.
Although in Vision 2040, Uganda has underlined ambitions to improve its Transparency International Corruption Perceptions Index (CPI) scores from 25% in 2010 to at least 71% by 2040, reality on the ground shows lack of progress.
Between 2010 and 2016, not only has Uganda’s score stagnated at 25%, but the country’s global rankings have worsened from 127th in 2010 to 151st in 2016. Yet countries like Rwanda have improved both in scores and position, moving from 66th position and a 40% score, to 50th with a score of 54% in the same period.
According to the recent Transparency International Global Corruption Barometer 2017, while less than 5% of people in Botswana, Cape Verde, Rwanda and Mauritius (the only African countries in the 50 less corrupt list) indicated they paid a bribe when they came into contact with a public servant in the 12 last months, in Uganda, it was 38%.
How dangerous is corruption?
Many times, the negative impact of corruption has been interpreted in terms of merely affecting the quality of service and increasing the cost of doing business, but hardly any effort has been given to examining other far-reaching consequences of corruption- –some of them macro-economic.
For example, since 2010, corruption has been consistently named by business executives surveyed for the World Economic Forum (WEF) Executive Opinions Survey as the most problematic factor for doing business in Uganda, except in the 2017-18 report when high tax rates overtook corruption. But even then corruption became the number two inhibitor of doing business in the country.
All these reflect poorly on Uganda’s competitiveness rankings and therefore the ability to attract meaningful Foreign Direct Investment and, by extension, jobs, taxes and foreign exchange; all of which have far-reaching consequences on the economy.
It is, therefore, not surprising that in the latest Global Competitiveness Index 2017/18, released last month, Uganda, which had greatly improved from the 148th position in 2014/15 to the 113th in 2015/16, slipped to 114th in 2017/18. Sadly, there are worries that we could slip even further.
Uganda, whose rank in The World Bank Doing Business was at 119th, has started backtracking; in the 2018 report, Uganda slid to the 122nd position. By comparison, our key competitors in the region; Rwanda has improved from 56th to 41st and Kenya from 92nd to 80th.
Certainly, the fall, by more than 55%, in Uganda’s Foreign Direct Investment (as measured by the United Nations Conference on Trade and Development (UNCTAD) World Investment Report) from $1,205 million in 2012 to $541 million in 2016 has something to do with this.
Perhaps even more dangerous, the pervasiveness of corruption is corrupting an entire generation making it into a sort of hydra. An August 2016 Uganda Youth Survey Report, by the Aga Khan University, in which 1,854 respondents aged between 18 and 35 from across the country were surveyed, reveals depressing results.
Fifty-six percent of Ugandan youth believe it doesn’t matter how one makes money as long as one does not end up in jail and 55% admired those who make money by hook or crook. Thirty-three percent believed corruption is profitable and 40% of the youth would readily take or give a bribe.
Can Uganda make corruption too risky for everybody?
Uganda’s 2017 anti-corruption day theme, “Restoring Integrity in Public Service; Regaining Citizens’ Trust in the Fight against Corruption,” is certainly a wonderful place to begin, but the reality is that corruption has never been and never will be solved by beautiful themes and grandstanding rhetoric.
Surely, recognizing the problem is the first step in solving it, but now is the time to join hands to increase the risks for those who engage in corruption.
The need for greater accountability is clear; all citizens deserve bribe-free services and leaders must be answerable to the public, not to a few powerful friends.
As expressed by the IGG in a December 2016 report to Parliament, the prevalence and complexity of corruption in the public and private sector is evolving from “favours and bribes to a few officials” to a dreadful “encompasses grand syndicated corruption where controls are deliberately circumvented in a systematic way.”
Now is the time to join hands together to ensure the effectiveness of the government’s critical anti-corruption response chain, that is, the detection and investigation of corruption as well as the prosecution and adjudication of corruption cases. Where there has been proof of corruption, there must be application of punitive sanctions coupled with asset tracing, asset freezing and asset recovery in line with The Anti-Corruption (Amendment) Act, 2013.
The Writer is Executive Chairman, Kyamutetera Holdings Ltd.