Victor Kgomoeswana

American lawyer, novelist, historian and essayist Louis Auchincloss is quoted as saying: "If you can sense the corruption in me, it is because there is a dose of it in you." This is what I tell people, especially non-Africans, who are wont to describe my continent as being inherently corrupt.
At the risk of sounding like a defender of corruption, big business is increasingly being exposed as the bigger catalyst of impropriety than the public sector.

Only decisive action by the private sector to marginalise those among its ranks found guilty of corruption can bury this vampire for good.

German enterprise software multinational, SAP, has suspended its South African leadership over allegations of corruption.

This is another hint that corruption, like a mathematical equation, has two sides - in an alliance of equals.

Unfortunately, in the private sector, corruption is only corruption when our competitor practises it. When we do it, it is creative salesmanship.

The story goes: The R130 million contract by Eskom to procure SAP’s management tool that tracks purchasing invoicing and payment documents, was reportedly facilitated by the Guptas.

SAP has since, after a short stint of denials, announced a sweeping anti-corruption investigation into the allegations over how its South African foot soldiers were closing deals.

Good for SAP.

An international law firm, said SAP’s Europe, Middle East and Africa head of business, Adaire Fox-Martin, would investigate the allegations of kickbacks arranged for a Gupta-linked firm.

Allegedly, members of the Gupta family were allowed space - by SAP staff in South Africa - to open doors for them to clinch the Eskom deal by paying a facilitation fee.

The fee is commonly known by innocuous names on the management reports of multinationals, for example "business development costs" or "entertainment budget" or simply "sundry expenses".

Multinationals conveniently look the other way when their sales development teams report back on how they secured contracts with African governments.

They eschew asking probing questions, for fear of uncovering the muck under the bonnet.

When details come out, like secret service bosses, they can always blame the impropriety on junior officials - or even suspend them.

No disrespect to SAP, but this is but one instance of what former president Thabo Mbeki referred to in his High-Level Panel on Illicit Financial Flows From Africa Report, in 2015.

Mbeki cited a figure of $50billion leaving Africa illegally each year - in the form of criminal activity such as drug and human trafficking.

Seventy percent of these outflows, however, are due to the sleight of the private sector hand.

The latter category covers such ploys as transfer pricing or, more broadly, base-erosion-and-profit-shifting (BEPS).

This means the methods used by multinational corporations, commonly those domiciled in developed countries but with high-growth operations in emerging economies, hide their true earnings from authorities in emerging economies.

The companies easily transfer the costs of running their emerging markets businesses to their base in developed economies.

A European company with operations in Africa, can siphon exorbitant licensing fees and other expenses to the financial reports of its European base - declaring a loss in Africa.

This is made possible by weak institutions in emerging economies, but also aggressive tax planning by multinationals, not without some help from professional services firms.

If these multinationals can look the other way while their managers in emerging countries are engaged in illicit practices, only to blame countries in Africa or Asia or South America for being corrupt, who is more corrupt - the private or the public sector? Neither.

Still, Transparency International easily labels African and other emerging-market countries high-risk territories, using surveys of the very business leaders of the companies domiciled in Europe, North America and so on, without any sanction for the companies that pay bribes in these countries.

Here is to hoping that SAP's investigation will uproot any rot there is; but, the private sector must prioritise the extermination of corruption in its ranks - with the same intensity with which it criticises African governments.

* Kgomoeswana is the author of Africa is Open for Business, a media commentator and public speaker on African business affairs, and a weekly columnist for African Independent 

** The views expressed here are not necessarily those of Independent Media.

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