Friday, April 23, 2010
By Mutale Kapekele
Thu 22 Apr. 2010, 01:10 CAT
THE Zambia Business Forum (ZBF) has launched the Business Action Against Corruption (BAAC) project which will engage the private sector in designing and implementing programmes to fight corruption.
In Zambia, corruption has been cited as increasing the cost of doing business, reducing profit margins for the private sector and also creating an environment of uncertainty in which firms operate.
Speaking at the launch of the BAAC programme on Thursday, ZBF chairperson Nathan Chishimba urged the private sector to take a leading role in fighting corruption.
BAAC is an international initiative that was born in 2006 following a G8 business summit where global and African leaders identified corruption as a critical obstacle to investment and growth and pledged to work together to tackle the problem.
Chishimba said the ZBF had identified the need to help step up the efforts to fight corruption by engaging the private sector, hence the launch of BAAC, Zambia chapter intiative.
He said although corruption was generally perceived to be rampant in the public sector, it also existed in the private sector.
“In Zambia it is fashionable to ascribe the term corruption only to those holding public office, or the public sector,” Chishimba said. “If this were the case, corruption would have been very easy to eliminate and manage. In reality, corruption has become a pervasive and invasive scourge that seems to have percolated through many aspects of everyday life, and its perpetrators exist in both the public and private sectors.”
He said the private sector should be concerned about corruption as it compromised business and industry standards, leading to an increase in the cost of doing business.
“For us in the private sector, corruption is not only a fashionable buzz word, or a distant concept that we should use in broad conceptual terms,” he said.
“Corruption distorts the application of the rule of law, disrupts regulation, reduces transparency, compromises business and industry standards, often to the detriment of the health and safety of consumers and above all, substantially heightens the cost of doing business. These cannot be said to be desirable elements of a business environment.”
Chishimba said it was the duty of the private sector to ensure that a stringent and effective fight against corruption was sustained.
“Ultimately, a corrupt free business environment is in the best interests of the businesses we represent,” he said. “It is therefore, our bounded duty to ensure a stringent and effective fight against corruption.”
He said the ZBF was well “placed” to lead a robust private sector driven initiative that could make an impact in the fight against corruption.
“The six member associations of the ZBF cover key strategic business sectors in Zambia with an estimated contribution of about 70 per cent to the country’s GDP Gross Domestic Product,” Chishimba said. “It is easily observable that ZBF membership commands a significant proportion of economic activity in Zambia, both directly and indirectly. We therefore feel well placed to lead a robust private sector driven initiative to work with the government and other stakeholders in order to make an impact in the fight against corruption.”
ZBF member associations include the Zambia National Farmers Union (ZNFU), the Chamber of Mines of Zambia (CMZ), the Zambia Association of Manufacturers (ZAM), the Zambia Chamber of Small and Medium Business Association (ZCSMBA), the Tourism Council of Zambia (TCZ) and the Global System for Mobile Communication (GSM) Association of Zambia.
Chishimba said the private sector was enthusiastic about actively participating in the fight against corruption through BAAC and hoped that the government and other stakeholders felt the same about the project.
Speaking at the same function, deputy minister of finance Chileshe Kapwepwe observed that corruption was a degrading vice to the integrity of the nation and it was a problem that affected everyone.
“Over the past decade, considerable attention has been devoted to fighting corruption in the public sector, however, it is worrying that little attention has been given to engagement and involvement of the private sector,” Kapwepwe said. “Corruption is a degrading vice to the integrity of a nation, a problem that affects all of us, the private sector, the government and the ordinary citizen alike. It takes two parties or more to effect a corruption transaction, and the economic principle of supply and demand also applies here.”
She said the perceived corruption in the public sector also had corresponding presence in the private sector.
“It is in this vein that we wholesomely welcome the increasing role of the private sector in promoting good corporate governance,” Kapwepwe said. “The launch of the BAAC marks a significant milestone in collective action in solving this problem.”
Kapwepwe warned that at macro level, corruption was a barrier to industrial development, had a negative impact on the economy and affected competiveness in the economy.
She said at micro level, corruption increased the cost of doing business, undermined innovation, diverted investment, undermined the rule of law and kept foreign investors at bay which resulted in less jobs created and limited sustainable development and poverty reduction.
She said fighting corruption was complex and required collective action which was not easily achieved.
“Collective action is not easy or quick and it requires patience, hard work and expertise,” she said. “Therefore, each one of us, as stakeholders, has a role to play. For the private sector, this includes initiating internal reforms by way of embracing good corporate governance practices and pushing for policy reforms in areas where corruption is rampant. For civil society, it entails checks and balances by advocating for transparency in business dealings and transactions in both the public and private sectors.”
Kapwepwe said the government would continue to provide leadership in fighting corruption by ensuring timely implementation of policy reform aimed at creating a favourable environment for corruption to thrive were removed.
Kapwepwe advised the ZBF to ensure that the objectives of the BAAC were plotted on a checklist which would enable all stakeholders to assess the programme’s progress in fostering good governance in the private sector and reducing the cost of doing business.