CORPORATE FRAUD AND CORRUPTION IN AFRICA

RC: From your experience, what seems to be the prevailing global perception of fraud, corruption and bribery when it comes to conducting business in Africa?

Allwright: Fraud, corruption and bribery are common experiences on the African continent. Citizens of African states are most likely to encounter instances of fraud, corruption or bribery on a daily basis. Corrupt practices have become part of the African society and an integral ingredient to conducting business on the continent. The extent of the situation is reflected in the Corruption Perception Index of 2014, which reveals that Africa is perceived to be riddled with corruption, as it is seen as the most corrupt continent. The situation is further exacerbated by insufficient investigative capacity within law enforcement authorities, which often leads to substantial delays or the ultimate withdrawal and cancellation of investigations or cases. There is general consensus that corrupt practices have significantly increased but the true extent of the situation is hard to quantify. This is because there is such a low level of reporting on the topic by law enforcement authorities. The most troublesome finding is that there appeared to be no meaningful consequence to corrupt practices: the few people being found guilty were either given a warning or were excused.

Gowi: The prevailing global perception when conducting business in Africa is that you have to grease a few hands to get through the continent’s many inefficient systems. However, while this is the overriding perception, it is not strictly true. While the systems in Africa might be slower than in other jurisdictions, this is a result of the evolution of business systems, and from available statistics there are tremendous improvements made relating to the cost of doing business every year.

Apr-Jun 2015 Issue

Horizon Forensics (Pty) Ltd

Huawei

KPMG