22 SEPTEMBER 2017 | Business Day
The value destruction which Zuma and his supporters have brought is familiar to millions across the continent, writes Dianna Games
A Nigerian economist said recently that his country was better prepared for crisis than success. Managing dysfunction and expecting the worst has become the new normal, he added. His comments highlight the country’s response to decades’ poor leadership, weak institutions and the emergence of a culture of impunity, forged by political neglect and vested interests.
The situation into which SA has been plunged by President Jacob Zuma, his supporters and “handlers”, coupled with the attendant destruction of value and values, is familiar to millions of Africans. Rebuilding countries destroyed by venal, self-serving leaders is long and costly. It is not just about the cost for governments of rebuilding neglected infrastructure, but also of trying to restore value systems, building trust with citizens and trying to root out embedded corruption.
Africans from other countries have voiced concern about SA’s trajectory. The Nigerians are sounding the loudest warning, saying that self-interested leadership breeds endemic corruption. It is not difficult to end up in a situation where the very people who can effect change won’t do so because they are benefiting from the status quo. The taint of corruption has undermined Nigerians’ trust in the ability of their institutions, politicians, the judiciary, police and even the country’s main corruption-fighting body to deliver efficiently and without bias or hidden agendas.
Bureaucracies have become a menace in Africa. Not only do they swallow the largest chunk of scarce resources without attendant productivity, the moral laxity at the top of the pile tends to trickle down into the service.
Transparency International says that in 2015, an estimated 75-million Africans paid bribes, many of them to get access to basic services. Many also paid bribes to escape punishment by the courts or police who are generally regarded as the most corrupt group. In Zimbabwe, 92% of people view the police as extremely corrupt while 75% in Kenya feel the same way.
It is common to hear Africans described as being resilient, made so by their often difficult and unpredictable circumstances. The ability of people to adapt to incremental hardship has made dysfunction seem almost normal. It also gets poorly performing governments off the hook — the expectation of public service delivery diminishes over time.
Running water and regular power have become luxuries in many countries across the continent. Billions of dollars will have to be found to rebuild and upgrade systems
Remittances sent by Africans who have sought better lives elsewhere are the main source of income for millions of people who remained at home. Nigeria, Egypt, Somalia and Zimbabwe are among the top recipients of remittances, but Kenya — viewed as one of Africa’s most successful economies — is also a major recipient. In 2016, diaspora remittances remained Kenya’s largest source of foreign exchange earnings for the third consecutive year. Attempts by governments in recipient countries to capture these inflows have largely failed; the mistrust runs deep.
But ironically, the diaspora has also helped governments by boosting their economies without the politicians having to lift a finger.
Running water and regular power have become luxuries in many countries across the continent. Billions of dollars will have to be found to rebuild and upgrade systems.
Dysfunction in state services is best exemplified by the power sector. Utilities across the continent have been kept on life support for years, even though many provide almost no electricity or potable water to consumers. Infrastructure has been destroyed by government ineptitude, an absence of long-term planning and war.
The generator business across the continent is booming. In Nigeria, more than $20bn a year is spent on fuel to power them. People off the grid in Africa — an estimated 600-million citizens — spend hard-earned money on nongrid power energy options such as paraffin lamps, wood and charcoal. The UN Environment Programme says 26-billion candles are consumed annually in sub-Saharan Africa.
Manufacturing capacity has declined in most African countries due to economic mismanagement and skewed policies. Zimbabwe, once a major African exporter, now imports almost 70% of its needs.
State-owned enterprises have suffered a common fate across Africa — they have been looted by governments, undermined and often destroyed. National airlines run as vanity projects have crashed and burned. Who remembers Ghana Airways, Nigeria Airways, Zambia Airways, Uganda Airlines and Air Malawi? Governments refused to privatise these “family jewels” and destroyed them.
Much of this dysfunction is driven by vested interests — politically connected officials and business people making money out of the status quo.
Trust between the state and the electorate is a major casualty. A Ghanaian said even with improving governance in his country, people still do not trust the government, no matter how good its intentions may be. They tend to still believe that politicians act in their own interest first with any benefit to citizens being more by coincidence than design.
The lax tax compliance across the continent is part of the trust issue. As governance falters and corruption thrives, tax collection suffers. A lack of compliance becomes part of the culture of impunity. People resist funding governments who fail to spend tax revenues wisely, honestly or productively.
The compliance burden is also a factor. According to the PwC 2016 tax survey, it takes an average of 313 hours for a company in Africa to comply with its tax filing obligations, against the world average of 261 hours. In Nigeria, it takes 908 hours to comply.
The tsunami of stories about grand corruption, venal and conniving leadership and the attempts to undermine institutions — among many other issues — are being heard loud and clear in SA as the media uncovers a murky trail and shouts from the rooftops.
The destruction of value in a country is seldom a single event. It is a slow erosion, an incremental shift in perceptions and expectations, year by year, incident by incident, until one day what has been destroyed is largely forgotten and there is a new normal.
People no longer complain or protest about what they have lost because they have found a way to adapt to a degraded situation.
SA’s current problems barely make the news in other African countries, they have become a part of the fabric of life. And anyway, politicians no longer feel pressure from electorates to fix what they have broken. When these problems are no longer newsworthy in SA, we will know we have arrived in the new normal.
• Games is CEO of business consultancy Africa @ Work.