In Ethiopia, prosecution for corruption has been rare, which is why establishing the Federal Ethics and Anti Corruption Commission (FEACC), in 2001, was seen as a ‘game-changing’ move by the government. Although there have been notable arrests in the past such as Tamirat Layne, prime minister of the transitional government, Siye Abraha, former minister of defence and Abate Kisho, former president of the Southern Nations Nationalities and Peoples Region, some argue that arrests were politically motivated and that corruption from big players on Ethiopia’s political and economic stage went un-checked by an enforcement body seen as weak and a public seen as apathetic.
However, the recent arrests of higher officials at the Ethiopia Revenue and Customs Authority (ERCA) and mega business people, beginning May 10, 2013, that included heavy weights like Melaku Fanta, former director general of ERCA with a ministerial portfolio and his deputy Gebrewahid Woldergiorgis, sent shock waves, as many felt it was a message that business as usual had stopped when it came to corruption.
Staffed with more than 300 employees, who receive special wage privileges due to the sensitivity of their responsibilities, and running on an average annual budget of nearly ETB 25 million, the Commission is trying to assert itself. However, it is still seen by many as a lame duck, unable to investigate widely rumoured corruption cases by big political personalities, and dormant for not being able to create major public mobilization on the issue.
“It is not that the Commission has been dormant before,” argues Aklilu Mulugeta, director of Corruption Prevention at FEACC, in an interview with Ethiopian Business Review (EBR). “Rather it is because the Ethiopian Revenues and Customs Authority (ERCA) is related to the vast business society and is so sensitive that it made the headlines easier than our moves against corruption in other institutions.”
In fact, ERCA’s Head Quarters around Megenagna had been under the FEACC’s prosecutors’ special surveillance since 2010.
A recent report from the World Bank indicates corruption is growing, though the problem may not be as severe compared to other developing nations.
The Report named, Diagnosing Corruption in Ethiopia: Perceptions, Realities and the Way Forward for Key Sectors, which was highly anticipated, argues that, although corruption in the country is growing, it is not as severe as the rest of the developing world. It does point out, however, that there is a growing level of corruption among civil servants.
“There is perception that corruption is a bigger problem than perhaps the evidence suggests,” says Guang Z. Chen, World Bank’s country director for Ethiopia in an email response to EBR.
All of the nine subdivisions included in the report experience incidents of corruption. telecom and construction lead the pack while the Justice system is a prominent area of concern. According to the Report, corruption in the delivery of water supply to rural areas exists from policy making through budgeting and down to water point commissioning and construction. Analysing post construction surveys on 26 shallow drinking-water bore holes, in the regions of Oromia and Southern Nations, Nationalities and Peoples Region, the Report indicated that corruption in the form of short drilling was detected over 10 pct of the samples with concerns about another 20 pct.
A more conclusive depiction of the prevalence of corruption in the country in comparison with the rest of the world is included in the 2012 perception of corruption index by Transparency International, in which Ethiopia was ranked 113th out of 176 nations worldwide. The country in the number one position is considered to be the least corrupted nation.
The book, Fundamental Psychology of Corruption, defines corruption as a conflict of interests. There is a conflict between the greater interest, the interest of the public, and an individual interest, the interest of the individual, mainly triggered by high demand for material comfort. This becomes a crime when the individual’s interest takes precedent over the public’s. The most notorious example is terminating a person’s success for the corrupt to remain successful. The fact that civil servants frequently have low wages creates a scarcity mentality, which fosters this kind of behaviour.
The correlation between low civil-service wages and corruption has been publicly debated since the 1970s. Unsatisfied civil servants develop a wide range of coping strategies to earn more income. Some take part time jobs such as teaching or consulting in the private sector whereas others moonlight as instructors and tutors.
Biruktawit Ayele [not real name] graduated from Addis Ababa University in Management in 2007. She served as an officer in the Construction and Housing Development office in one of the Woredas in Nifas Silk Lafto Sub City, for two years and a half. She also worked at the Sub City for about a year. The highest monthly salary Biruktawit had earned as a civil servant was a net ETB 1,400. This is before she joined a private company for a net ETB 2,500 a month. “Salary was the main reason I left the civil service,” she says. “You always wish to move upper on the income ladder as an individual.” Biruktawit confesses that she had seen a lot during her experience as a civil servant. She had witnessed District and Woreda officials making simple processes difficult, to squeeze bribes out of customers. Biruktawit also tells a story of how low paid civil servants at Woreda and Sub City offices, especially those with responsibility of following upon Kebele houses’ rent fees collection try to get something illegally. “I usually used to hear of stories about such officials who illegally try to transfer Kebelle houses ownership for business people in exchange for personal gains,” she says. These people, Biruktawit argues, would never abate because- “they are paid very low, and don’t care as such for this meager salary even if they are fired.”
The 2007 Working Paper of the International Monetary Fund presents two efficiency wage models of corruption: The Under Fair Wage Model, which argues that civil service wages are important determinants of corruption, and The Shirking Model, which speculates that wages are a secondary factor for temptation towards corruption. The Under Fair Wage Model argues that corruption, when detected, could cause penalties such as loss of employment; therefore, high earning officials, who have much to lose, tend to be less corrupt. The argument goes; civil servants are engaged in satisfying rather than in maximizing behaviour, which means that they engage in only as much corrupt activity as necessary to achieve a fair income.
A degree holder with nine years of experience in the civil service may end up with no more than ETB 2,000 monthly gross salary while his counter part in the banking industry earns more than ETB 10,000 per month.
According to the Ministry of Civil Service, the highest basic initial salary that a civil servant can earn up on employment is currently ETB 4,343. This number was ETB 1,150 in 1964.
Stiff penalties against corruption could be enforced to prevent it. However, when the public sympathizes with civil servants because they barely earn enough to scrape by, it hinders law enforcement. Society sees the corruption as justifiable and hides people from the justice system. A society veiling corrupt hands slows down probability of detection, hence, higher corruption, and the circle starts from the bottom all over again.
“There is logic to speculate that petty corruption (however low) is fuelled by the poorly paid bureaucrats trying to make ends meet,” says Guang.
Abusing per diems and allowances is an example of petty corruption that could take place in the civil service. Such practices such as, an entire workshop for a civil service institution being faked, attendance lists being falsified, fake receipts being submitted, false records of inflated volumes of entitlements and per diems being paid at a rate well below what is reported and budgeted are common examples. Not only are they common, they are supported by ‘they-deserve-it’ thinking of the society; never do they seem to be shameful acts, as civil servants are making a lot less money compared to their counterparts in the private sector.
“There is no doubt that low wages are a factor in corruption that is being practiced at the Kebele and District levels,” agrees Aklilu. “Poor awareness in the society about corruption and poorly structured bureaucracy are stronger factors in Ethiopia’s case though”.
Poor transparency and bureaucracy structure in government offices are two other reasons for rampant corruption. A more figurative presentation of malpractice in government offices was presented in this year’s report by the Auditor General of the federal government. It was included in the report that ETB 1.36 billion has gone unaudited; ETB 866 million was signaled as outstanding collections and another ETB 354 million worth of procurements have not followed standard procedures.
Corruption harms the chances of success for small and micro enterprises, affecting job creation and poverty reduction. Corruption creates fiscal distortions and redirects money allocated to income grants, housing or pensions and service delivery. Needless to say, corruption hits the poorest the most, the very people who most depend on the government for support. In Ethiopia, corruption takes away government grants and other support from about 29 pct of the population, who desperately require it. Corruption also chases away foreign direct investment. Transparency International calculates that investing in a relatively corrupt nation is 20 pct more costly than the case is otherwise.
In the political arena, corruption could result in apathy of citizens to participate in any democratic activities. Frustrated citizens may eventually riot or cause social unrest. In the social sphere, corruption discourages citizens from working together toward a common goal. Giving and taking bribes becomes the tradition, which in turn results in civil rivalry widening the gap between the rich and the poor. Jealousy and hatred among individuals will end up causing a national sense of insecurity.
The impacts can be minimized with equivalent and timely remedies; however most depend on the awareness of the society.
The FEACC ‘s role is to save public resources from embezzlement and mismanagement by investigating and prosecuting corruption while at the same time studying the way Federal offices are working to stop ‘loop-holes’ in their financial procedures. They also work to get the public involved in the fight against fraud.
The FEACC has been trying to get the public to take corruption seriously, however there is still much to be done. The media plays a huge role in getting the message out and if corruption prevention messages are integrated into the education system, they can bring about change and influence the coming generations.
Bureaucracy and the system and structure of work flow in government offices should be nothing but transparent and the power exercised by officials must be limited in a way that presumes the feeling of accountability so as to prevent corrupt deeds before they happen.
Experts close to the issue of corruption agree that low civil service wages are one of the main factors behind the growing corruption in the country. They point to low civil service wages fuelling petty corruption at Kebele and District levels, resulting in poor delivery of services. The salaries of the civil servant should be an area of priority if the Ministry of Civil Service is to achieve its vision – a civil service which effectively and ethically achieves its mission by 2020.