Sub-Saharan Africa has again been ranked as the lowest scoring region on Transparency International's Corruption Perception Index for 2021 (the "Index").

Produced yearly by international anti-corruption organisation Transparency International, the Index ranks 180 countries across the globe by measuring how corrupt each country's public sector is perceived to be. The results are given on a scale of 0 (highly corrupt) to 100 (very clean). A score of less than 50 indicates that a country has serious corruption problems. The Index is used by compliance professionals worldwide as a reference tool for risk assessments, due diligence and anti-corruption training purposes. 

This years' Index has revealed a stagnation of corruption levels across the world. More than two thirds of all countries scored below 50 and the average global score remained at 43. Such stagnation is reflected in Sub-Saharan Africa, with 80% of countries receiving similar scores over the last 10 years. 44 out of 49 Sub-Saharan African countries scored below 50 and the average score was 33, far below the global average.

The Seychelles is an outlier to the rest of the region and performed the best with a score of 70, having increased 18 points since 2012. Whilst countries such as Ethiopia and Angola have shown signs of improvement from previous years, others such as Botswana and Liberia have seen significant declines in scores. South Sudan remains at the bottom of the list.

So why have perceptions of corruption remained so poor in the region? Amongst other reasons, Transparency International asserts that authoritarian regimes, weak institutions and unresponsive political systems have undermined anti-corruption efforts. Civil liberties have also been eroded due to the Covid 19 pandemic, and armed conflicts and terrorist threats have exacerbated problems.

As an illustration of the scale of potential grand corruption in the region, Transparency International refers to the Pandora Papers; a leak of almost 12 million confidential documents relating to providers of professional services to wealthy individuals and companies seeking to incorporate offshore entities within low or no tax jurisdictions.  The International Consortium of Investigative Journalists' review of these documents found that nearly 50 politicians and at least 5 current or former heads of state from Sub Saharan Africa had connections to offshore entities. In Nigeria alone, over 100 members of the political and economic elite used offshore vehicles to buy properties with a total worth of £350 million in the UK. 

In contrast, Transparency International highlights the South African inquiry into state capture, known as the Zondo Commission, and the corruption charges faced by former president Jacob Zuma as an example of positive progress to address corruption. 

Ultimately, the Index signals that, whist progress has been made in some countries, corruption remains a serious issue in many African nations. Any future steps taken to tackle corruption in individual countries are likely to be part of a longer-term process, and may be hindered by other issues such as armed conflict, coup d'etats, terrorism and the effects of climate change. 

The Index therefore serves as a timely reminder to those operating or looking to invest in the region that they should be aware of the risks they may face when conducting business. International entities such as Rolls Royce have in the past found themselves to be the subject of UK investigations due to allegations of corruption in Africa. Enforcement improvements in certain African countries mean that there is a risk of prosecution by African authorities alongside more established prosecutors such as in the UK and the US. Debarment by multi-national development banks also remains a risk, alongside the typical reputational and financial damage that arises during such enforcement action.

However, such corruption risks can be mitigated by businesses putting in place vigilant systems and controls to prevent bribery and corruption. For instance, risk assessments should be carried out and kept up to date, and thorough due diligence conducted in relation to third parties. Anti-bribery and corruption policies and procedures should be reviewed and updated frequently, and their effectiveness properly assessed. Regular training to employees and representatives should also be provided, particularly to those with exposure to risky jurisdictions, taking care to ensure that the training will help them to navigate any red flag touch points that may exist in particular regions. Such training should also be extended to third parties where possible so that they too are aware of bribery risks and issues.

If you would like to discuss anything in this article further, please contact James Cooper.