Business Governance: Challenges of Corruption within the EAC Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Crisis of Legality Crisis of Legitimacy Ethical Leadership Crisis Governance and Change Drivers Without good governance, no amount of oil or no amount of aid, no amount of effort can guarantee EAC’s success. But with good governance, nothing can stop the EAC. Governance Defined … the process and institutions by which authority in a country is exercised. It is the process by which governments are selected, held accountable, monitored and replaced Government’s capacity to manage, formulate, implement, and enforce good policies and regulations

C=M+D-A R. Klitgaard et. Al. C=M+D-A R. Klitgaard et. Al. Dr. A. K. Akidiva - Governance, Leadership, and Integrity  Transaction or attempt to secure illegitimate advantage for nation or self by subverting a public official or entity from performing their proper function Fraser-Moleketi  Transaction or attempt to secure illegitimate advantage for nation or self by subverting a public official or entity from performing their proper function Fraser-Moleketi Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violation of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish…no country, rich or poor, is immune to that evil phenomenon. Both public and private sectors are involved. And it is always the public good that suffers. Dr. Kofi Anan

Kenyan Level: 1987 All Africa Games Kenya National Assurance Company Indigenous Banking Collapse/KCB/NBK Goldenberg/Anglo Leasing Asset Misappropriation in State Corporations: AFC/ADC et.al. A&CG’s Reports on Misappropriation on GoK resources Devolved Funds/Triton/Maize/NSE/Privatizatio n etc Kenyan Level: 1987 All Africa Games Kenya National Assurance Company Indigenous Banking Collapse/KCB/NBK Goldenberg/Anglo Leasing Asset Misappropriation in State Corporations: AFC/ADC et.al. A&CG’s Reports on Misappropriation on GoK resources Devolved Funds/Triton/Maize/NSE/Privatizatio n etc Dr. A. K. Akidiva - Governance, Leadership, and Integrity Fraud, Corruption, Asset Misappropriation and Economic Crime International Level: Enron, Tyco, Ponzi Schemes (Bernard Maddof – USA Total - France Daimler Benz – Germany British Arms Manufacturer - UK United Nations/Donor/Civil Society Organizations International Level: Enron, Tyco, Ponzi Schemes (Bernard Maddof – USA Total - France Daimler Benz – Germany British Arms Manufacturer - UK United Nations/Donor/Civil Society Organizations

Dr. A. K. Akidiva - Governance, Leadership, and Integrity Types of Corruption Grand Corruption and Petty Corruption These types find expression as: Administratively (Petty Corruption) Political Scandal (Grand Corruption) Individual/Personal Level Institutionalized Corruption Domestic Corruption Foreign Sponsored Corruption

State Capture REMEDY: Good Governance; Leadership and Integrity Affects Elective and Appointive Leadership (PEPS) Captor Firms Influence Rules, Laws; Control Bureaucrats and Systems Political Patronage and Influence Distort Policy, Legal and Institutional Frameworks Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Business Governance and Corruption Dr. A. K. Akidiva - Governance, Leadership, and Integrity Estimates of Illicit Flows from East Africa (Last Four Decades – US$ - Kar & Cartwright 2010) Deductive Methods of Calculation Burundi1.2 billion Rwanda1.9 billion Kenya5.6 billion Uganda6.2 billion Tanzania7.4 billion Southern SudanNo Figures TOTAL22.2 billion + Sufficient to pay off Collective External Debts

Bribery, Extortion and Fraud Dr. A. K. Akidiva - Governance, Leadership, and Integrity African Continent – “Net Creditor" Capital Flight (Assets) Debt Liaibilities Net Assets Cumulative ODA Capital Flight ODA Number of Countries 25 LICs33 SSA Cumulative Capital Flight exceeds Cumulative Debt and Cumulative ODA Leonce Ndikumana

Corruption Challenges within the EAC Citizen Apathy and Lack of Public Participation Weak Institutional Framework to Promote Integrity Cross Border Corruption Political Economy and State Capture Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Constitution of Kenya 2010 LIA 2012 ACECA 2003 POEA 2003 EACCA 2011

Civil Society Oversight Freedom of Information Public Hearings of Draft Laws Monitoring by media/NGO’s Good and Clean Government Competition and Entry Competitive Restructuring of Monopolies Regulatory Simplification Public Administration and Public Finance Meritocratic Civil Service Transparent, Monetized, Adequate Remuneration Accountability in Expenditures (Treasury, Audit, Procurement) Strategy for Good Government and Anticorruption Accountability of Political Leadership Disclosure of Parliamentary Votes Transparency in Party Financing Asset Declaration, Conflicts of Interest Rules Checks and Balances Independent and effective judiciary Decentralization with accountability Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Systemic Approach Values-Based Approach Values-Based Approach Integrity Management Integrity Management Rules-Based Approach Rules-Based Approach Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Bribery, Extortion and Fraud Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Tax Evasion Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Using One’s Position and Authority to Subvert Systems, Regulations, and Procedures Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Home to 7,000 MNCs & 100, 000 SMEs A Great City to Live, Work & Play From 3 rd World to 1 st in One Generation ! Singapore Today About Singapore Dr. A. K. Akidiva - Governance, Leadership, and Integrity

Thank you for your kind attention! Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. Margaret Mead The measure of civilization/society is how they treat their weakest members. Javier Perez de Cuellar Whether its genocide or ethnic cleansing it always starts with humiliation of one individual. Kofi Annan Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. Margaret Mead The measure of civilization/society is how they treat their weakest members. Javier Perez de Cuellar Whether its genocide or ethnic cleansing it always starts with humiliation of one individual. Kofi Annan