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2015
Impact of Corruption on Capital FlowsMark Arendse – 24 October 2015
The Kingdom Summit, 2015
Introduction
• What corruption is• How does Africa view it• How does the continent rate against the rest of
the world• Chartered Accountants World Wide New York
Summit• Effect corruption is having on capital flows• Concluding remarks
Corruption and Africa
• Definition– Transparency International: Generally speaking it’s
the abuse of entrusted power for private gain– Wikipedia: Corruption is the abuse of bestowed power
or position to acquire a personal benefit. Corruption may include many activities such as bribery and embezzlement
– The abuse of power for personal gain– In June 2004 the BBC conducted a debate on how
deep corruption is in Africa
2004 BBC Debate
• As we grew up in Kenya, we were told stories praising the rich men who had become so by stealing public funds or money of their employers Samuel, Kenyan
• Corruption is part of African culture, it's a way of life. You have to give something if you want things to go your way. It's a way of saying thank you! Ondiwani Tgog
• I never realised giving someone a "thank you token" was bribing Dr Godson Nigeria
• All our leaders are birds of the same flock. Augustine Sierre-Leone
Corruption worldwide rankings
• Rating of 175 countries based on the Corruption Perception Index CPI
• 0/100 most corrupt 100/100 least corrupt• Most corrupt Jointly Somalia and North Korea
8/100• Best/top country Denmark 92/100• America 74/100• Average for Sub Saharan Africa 33/100• Average for EU and Western Europe 66/100
Extract from CAW Summit
• Instil a culture of ‘moral courage’• Scrutiny of the digital age = direct link between
ethics and value creation• Ethics emerged as one of the main factors that
will shape the future of doing business• Millennials regard moral values of organisations
as very important• Rather do business with brands they trust• Vw lying on their omission reports
Effect of corruption on Capital Flows
• Decision makers becoming more aware of effects that unethical/corrupt decisions have on the profitability of their companies
• Corporations are becoming increasingly more vigilant in their corporate governance to ensure corrupt activities are identified.
• Corrupt activities involve a number of different people and departments
• Delaying tactics for whatever reason
Conclusion
• Funds are available • World Bank in its 2014 data report
– Sub Saharan Africa (developing countries only) GDP $1.7 trillion and population of 973,4 million
• African Development Bank July 2013 report– African Contentment is now the fastest growing Continent in the
World• Christian business people
– Duty to do what is right– To be a light where there is darkness
• 2 Thessalonians 3:13– And as for you brother and sisters. Never tire of doing what is right
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