Corruption has manifested itself in inflated costs in big infrastructure projects
In the wake of corruption charges involving Nigerian government officials, Siemens in July this year made history as the first major corporation to be banned from bidding on World Bank projects
The action by the World Bank, the biggest donor of funds for capital intensive technology projects in Africa, fueled debate over corruption and how project costs have been bloated by greedy government officials, junior officials in public administration offices as well as private sector insiders.
The most prominent debates about corruption have been in South Africa, where a 7 billion South African rand (US$896 million) electronic payment system was cancelled; in Uganda, where there were questions about why an ICT backbone infrastructure project cost more than an equivalent project in Rwanda; and in Kenya, where there are questions about whether there was corruption in the way The East Africa Marine System has been run and shares awarded.
More generally, corruption has manifested itself in inflated costs in big infrastructure projects, mainly funded by loans from the World Bank.
Among other things, a lack of understanding of technology has led to misguided beliefs in government and the private sector that all technology projects must be expensive, IT insiders say. Most early technology adapters had to import technology and expertise from Western countries, which added to costs.
But even now, with technology knowledge available locally, the costs of many projects costs remain high.
The emerging technology sector in Africa provides immense opportunities for corruption to thrive, said Mike Theuri, an independent telecom expert.
"Corruption manifests itself in ways such as improper collusion between prospective or existing sector participants and regulators, (with) political interference improperly influencing the outcome of regulatory matters or decisions," said Theuri, who has been vocal in Africa's telecom privatization process.
This problem of kickbacks is widespread in Africa because government officials work that way, said Stone Atwine, managing director of BlissOne Media, a technology company in Uganda. if a company is not ready to pay bribes to the officials, it will most definitely not win any contracts, he said.
"Currently, the Ugandan parliament has refused to approve Uganda shillings 122 billion [$60 million] for the second phase of the ICT backbone infrastructure because of corruption and inflated costs in the first phase of laying a nationwide fiber optic network," Atwine said in an e-mail interview.
"Questions arose after some people realized that the project in Uganda is very expensive compared to the same work being done in Rwanda. Compare Uganda's US$126 million for 2,100 kilometers and the Rwanda's US$38 million for 2,300 kilometers," he said.
Costs are inflated in big projects because of the number of players involved, but corruption exists at lower levels as well, according to IT experts.
"Corruption manifests itself through over-invoicing, where service providers present bills that are significantly higher than the value of the equipment ordered or service rendered. It often occurs in connivance with insiders within the organization/agency," said Fola Odufuwa, a senior partner with Praxis Partners in Nigeria, a technology consultancy.
In Kenya, the government hopes to save 50 billion Kenyan shillings ($680 million) annually by implementing electronic solutions that will help prevent corruption by government officials.
The government has already launched an e-registry for companies and reduced the number of licenses and permits needed by investors to establish businesses and undertake projects, significantly reducing opportunities for kickbacks and making the process more transparent.
"If the government successfully implements e-procurement, it can save in excess of 50 billion [shillings] per year; the systems will bring real competitive bidding without use the archaic method of prequalification that is usually skewed to favor companies owned by government employees," said Bitange Ndemo, permanent secretary in the Ministry of Information and Communication.
One of the major criticisms leveled against African governments is the lack of appropriate laws against corrupt companies and, in other cases, lack of effective implementation of the laws. Applying appropriate laws would go a long way toward reducing corruption, said Theuri, the telecom expert.
"Violations of anticorruption laws should be dealt with severely through the imposition of substantial monetary penalties, such as those based on an entity's annual turnover or profitability, indefinite disbarment from sector participation, or the immediate cancellation and withdrawal of improperly obtained licences," said Theuri.
http://www.infoworld.com/t/legislation/corruption-adds-african-it-costs-insiders-say-245
