July 17, 2020

We Cannot Fight Corruption Without Fighting Neoliberalism

Alex Batubo

In a recent talk Femi Falani provide a key insight for those of us who really want to fight corruption. He said that we have to take account of “the impact of the neo-liberal policies being religiously pursued by the majority of African governments”. The main reason for the increase in corruption in recent decades is Neoliberalism and the resultant inequality. Neoliberalism leads to increased corruption by directly increasing the opportunities for corruption by championing the two reform approaches of outsourcing of public services and charging users for basic services. These expand the opportunities for corruption and are the two high risk areas for corruption in any public sector organisation.

The Buhari regime says it wants to fight corruption, indeed recently Buhari himself claimed that they were “winning the war on corruption”. But the problem is that the government is married to Neoliberalism. As a result, the current government has done nothing significant to reduce corruption. When was the last time you visited a government office and was not asked for a dash? How many times this week have you seen police or VIO collecting money?

Any government that is serious about corruption would have to introduce two key reforms:

1) eliminate the government contract culture – we need to bring back the Public Works Board to undertake capital contracts by direct labour.
2) eliminate user charges, education, health and other public services should be free. Charging individuals directly for these is inefficient and leads to leakages.

Finally we need the NLC/TUC to lead a proper fight for a decent minimum wage starting with another increase in 2021 – 10 years after the increase to N18,000.

Since the mid-1980s, when Babangida introduced the Structural Adjustment Program in Nigeria, government contracting has increased massively. Now it is expected that all capital spending will be on contracts with private sector companies. With each of these contracts 10% or more of the contract price will be used to settle the senior public sector officials and politicians who authorise the appointment of the particular contractor. Traditionally, contractors were expected to pay 10% of the contract sum to win a contract – a former Accountant General told me recently that this has now increased massively.

Previously if a government wanted to build a road or a primary school this would be undertaken by the Public Works Board. The Board would use directly employed workers and tools or equipment it owned. Now a contract will be let with a building or construction company. So it is now expected that all the capital budget will be used to pay contractors.

In addition, many more services are being out-sourced which also increases the number of contracts between the government and private sector companies. For example, security at all government (and trade union) offices is now privatised and provided under contract with a private sector company. Similarly printing, training, IT, catering services are increasingly provided by private contractors or consultants. All these contracts provide opportunities for easy corruption that is hard to stop.

The other major area which provides increased opportunities for corruption is charging for government services. The most efficient way to fund public services is through progressive taxation. Collecting small amounts of money from individual members of the public is hugely expensive. It also provides lucrative opportunities for corruption, as we all know. When we pay fees for public services we expect to pay more than the official rate and that the balance will be pocketed by the relevant public officers.

It is difficult to reduce leakages from collecting fees. It needs the public expectation that they will always receive standard official receipts that they recognise. It needs all money paid for fees to be paid direct into an official government bank account. In addition, charging for fees allows officials to charge extra or to charge for services that should be provided for free.

Any government that is serious about corruption would not charge for basic services. Education should be free from primary to university. No fees, no fees for forms, no tuition fees, free books, free examination entries etc. Similarly, there should be no charging for medical services. No examination fees, no charging for X-rays, inoculations, medicines, operations etc etc. It is possible to make all basic education and health services free – we just need to force the government to take the necessary steps.

Similarly we need to campaign for free electricity for the poor – rather than increasing costs again. In South Africa every household now gets the first 50kWh per month at no cost. This is enough to provide basic lighting, using an electric kettle, basic ironing and a small black & white TV. In addition, all households receive 6,000 litres of water a month free with basic sanitation. This is a very efficient system as the small electricity and other bills for these households do not have to be collected.

All these public services can be funded by taxing the rich at a higher rate – by returning to the rates in the 1970s. This would have the bonus of creating a more equal society which also reduces the incidence of corruption. To this end, we also need the NLC/TUC to start campaigning for another increase in the minimum wage next year. N30,000 is only 40% of the value of the minimum wage in 1998 so poor workers can afford to buy less than half the amount of rice or kerosene that they could afford in 1998.

Neoliberalism, starting with Babangida’s Structural Adjustment Program in 1986, has made corruption and inequality far worse. These are the real reasons for insecurity so deserve drastic measures. We need an end to the contract culture and a return to in-house services. We also need a massive reduction in range of charges for public services. These along with other measures to reduce inequality will greatly reduce corruption and also lead to a drop in insecurity. We want the NLC/TUC to lead this fight.

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