| TABLE OF CONTENTS | |
| Title Declarations | i |
| Acknowledgements | ii |
| Summary | iii-iv |
| Key terms | v |
| Table of contents | vi-ix |
| List of tables | x |
| List of figures | xi |
| CHAPTER 1: GENERAL INTRODUCTION | |
| 1.1 Introduction | 1 |
| 1.2 Background and rationale | 1-7 |
| 1.3 Statement of the problem and the research question | 7 |
| 1.4 Research questions | 7-8 |
| 1.5 Purpose of the study | 8 |
| 1.6 Terminology | 8 |
| 1.6.1 Corruption | 8-9 |
| 1.6.2 Corporate governance | 9 |
| 1.6.3 Service delivery | 10 |
| 1.6.4 State public enterprises | 10 |
| 1.6.5 Systemic corruption | 11 |
| 1.6.6 Governance | 10-11 |
| 1.6.7 Manager | 11 |
| 1.6.8 Director | 11 |
| 1.7 Scope of the study | 11-12 |
| 1.8 Limitations | 12 |
| 1.9 Data sources and methods of data collection | 12-13 |
| 1.10 Method of data analysis and interpretation | 13 |
| 1.11 Literature review/study | 13-14 |
1.12 Overview of chapters 14-15
- Introduction 16
- Corporate governance as an issue related to corruption and business
Ethics 36-38
CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY
- Data collection and collection procedure 51-52
- Presentation and analysis procedure 52
- Conclusions 53
CHAPTER 4: DATA PRESENTATION, ANALYSIS AND INTERPRETATION
- Introduction 54
- Demographic data 54-56
- Causes of systemic corruption in public enterprises in the
Harare metropolitan area 57-58
- An analysis and discussion of the causes of systemic corruption in public enterprises in the Harare metropolitan area 58-60
- Manifestation of systemic corruption in public enterprises in the
Harare metropolitan area 60-62
- An analysis and discussion of the manifestation of systemic corruption in public enterprises in the Harare metropolitan area 62-63
- Effects of systemic corruption in public enterprises in the
Harare metropolitan area 63-66
- An analysis and discussion of the effects of systemic corruption in
public enterprises in the Harare metropolitan area 66
- Strategies for implementation to eradicate systemic corruption in
public enterprises in the Harare metropolitan area 67-69
- Conclusions 69
CHAPTER 5: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
- Summary 70-71
- Conclusions on the findings of the study 71
- What were the causes of systemic corruption in public enterprises in the
- Conclusions on the findings of the study 71
Harare metropolitan area 71-72
- How did systemic corruption manifest itself in public enterprises in the Harare metropolitan area 72
- What were the effects of systemic corruption on service delivery and public life in public enterprises in the Harare metropolitan area 73-74
- How can systemic corruption in public enterprises in the
Harare metropolitan area be eradicated 74-75
- Recommendations 75-76
- Further research study 76
List of references 77-84
Appendices 85-93
LIST OF TABLES
Table 1 Causes of systemic corruption in public enterprises in the Harare metropolitan area 57
Table 2 Interview results on other variations of corrupt activities in public enterprises in the Harare metropolitan area 65
Table 3 Perceived strategies that could be implemented to reduce systemic corruption in public enterprises in the Harare metropolitan area 67
LIST OF FIGURES
Figure 1 Respondents’ age range 55
Figure 2 Qualifications of research respondents 56
Figure 3 Manifestation of systemic corruption in public enterprises in the Harare metropolitan area 61
Figure 4 Effects of systemic corruption in public enterprises in the Harare metropolitan area 63
CHAPTER 1 GENERAL INTRODUCTION
- Introduction
The study focuses on the impact of systemic corruption in public enterprises in the Harare metropolitan area in Zimbabwe. The introductory chapter provides the background and rationale, the statement of the problem, research questions and clarification of concepts. Limitations of the study, the research scope and delimitations are set out briefly. The case study and explanatory research designs are adopted as the research approaches, thus the study is descriptive and explanatory in nature. The introductory chapter concludes with an overview of the chapters contained in the study and how the research unfolds.
Background and rationale
The impact of systemic corruption on economic development and the well-being of the public is no longer questioned. Corruption disproportionately impacts on the disadvantaged, hinders economic development, reduces social services, diverts investments in institutions critical to the existence of the nation (UNDP 2004:1). Moreover, it fosters an anti – democratic environment, characterized by uncertainty, unpredictability and declining moral values and disrespect for constitutional institutions and authority. Corruption, therefore, reflects a democracy and governance deficit – in other words, a weak governance system in a country (UNDP 2004: 1).
Corruption is primarily a result of poor governance, thus a solid framework of administrative strategies to manage society’s needs is required across state public enterprises. When formal systems break down in governance, it becomes harder to implement and enforce laws and policies that ensure accountability and transparency (UNDP 2004:2) in the management of public activities.
Corruption, as an ever changing phenomenon, is not an obvious variable in any society because values and norms differ considerably from nation to nation, which also means that countries have varied beliefs and knowledge systems. Thus behaviour that could be regarded as deviant in some countries may be acceptable in other countries. For example, in the Asian countries giving gifts is acceptable to a certain degree but not acceptable in the western countries. Regardless of the varied values, norms and belief systems in developing countries including Zimbabwe, political office bearers and public officials ought to root their discharge of duties on the need to promote the general welfare of the public. They should not put their self interest first before satisfying the needs of the public (Bauer & Van Wyk 1999:56).
Incidences of corruption vary among countries in Africa, from rare, widespread (happening in many public institutions but has not reached systemic levels) to systemic. Systemic corruption is a situation where corruption is considered a way of life or a situation where corruption has been normalized or regularized with public accountability becoming an exception and not the rule. When corruption is rare, it can be easily detected and controlled. When corruption is happening in many institutions (widespread), it can also be manageable but in a situation where it is systemic, detection and control is minimal, incentives and unethical practices are put in place to perpetuate the system. Institutional rules and norms of behaviour are adopted towards the ultimate goal of predatory gain (Hope & Chikulo 2000:1).
Corruption, in the case of state public enterprises in the Harare metropolitan area, is now systemic in nature. The abnormal way of conducting business in state public enterprises is now normalised, and indeed something has gone wrong in the governance of these institutions. Public officials are up to personal enrichment. They are maximising their takings without regard to the impact corruption has on the well- being of the citizenry (Hope & Chikulo 2000:1 and Goredema 2000:2). The poor directing and control of public entities (weak corporate governance) is a source of corruption. Principally, corruption in public enterprises is a failure of governance and it results in unfair public resource manipulation (UNDP 2004:2). Public enterprises are
subject to manipulation in many ways, clear examples of resource manipulation in some public enterprises in the Harare metropolitan area are highlighted next.
In 2003, Zimbabwe School Examinations Council (ZIMSEC) senior management crafted a vehicle policy which saw seven senior managers acquiring a vehicle each every fours years of their employment at zero book value. ZIMSEC officials also awarded business contracts to unqualified bidders and in most cases these unqualified bidders were companies/organisations of their friends and relatives (Shana 2006:1). In the same year, Zimbabwe United Passenger Company (ZUPCO) board of directors was involved in fraudulent dealings with a foreign company that supplied the enterprise with small passenger buses. These small buses were earmarked for servicing urban routes. The chairperson of the board, among others, received bribes in order to favour the company that supplied buses although they were not suitable for the required operations (Shana 2006:1).
The spate of corrupt activities continued in most public enterprises which saw National Oil Company of Zimbabwe (NOCZM), experiencing massive pillage by public officials including ministers in 2006. The organization’s resources were used to enrich ministers and senior public officials. One example is the diverting of fuel products that include diesel, petrol and lubricants which were meant to benefit farmers and deserving public to the black-market (Shana 2006:1). The year 2006 also saw the Grain Marketing Board (GMB) senior officials using the organization’s farming inputs meant to benefit the public for private gains. Officials converted several tones of fertilizer, maize seed and many other inputs to their own use. New farmers who were settled in farms during the land redistribution process from 2001 suffered a great deal which resulted in the underutilisation of farms due to shortage of inputs (Shana 2006:1).
On the same note, Air Zimbabwe (Airzim) bought unsuitable aircrafts which were meant to service domestic routes without proper evaluation, allegedly after senior officials had received bribes from a Dutch Aircraft Company to influence the decision
to purchase such aircrafts. The engines of these aircrafts were not designed to operate on high temperatures that are normally experienced in Zimbabwe (Shana 2006:1). The above described incidences are indications of systemic corruption in public enterprises in the Harare metropolitan area.
Corruption is endemic in all governments and is not restricted to a continent, regions and ethic groups, it cuts across faiths, its impact is detrimental to the performance of the economy (Dike 2007:1-19). Corruption in state public enterprises, including those under study, occurs in the provision of services where officers are paid materially or monetary to influence decisions to approve or offer services to those in need.
According to Dike (2007:1-19), corruption is the violation of established rules for self – gains. It is the effort to secure wealth or power through illegitimate means at the public expense. Corruption in most state public enterprises in the Harare metropolitan area manifest itself in the form of bribery, embezzlement, fraud, extortion, abuse of power, conflict of interest, favouritism, ghosting, nepotism and graft (Shana 20061:1).
The South African Department of Public Service and Administration (2002:7) also states that corruption includes bribery, embezzlement, fraud, extortion, abuse of power, conflict of interest, favouritism, ghosting, nepotism and graft although countries may have different approaches to corruption.
Alatas (1990:1) defines corruption as the abuse of trust in the interest of private gains and divides it into seven types which are:
- autogenic corruption, which is self-generating and typically involves only the perpetrator,
- defensive corruption, which is corruption that involves situations where a person needing a critical service is compelled to bribe in order to prevent unpleasant results being inflated on one‘s interest,
- investive corruption, is corruption that entails the offering of goods or services without a direct link to any particular favour at the time but in anticipation of future situations when the favour may be required,
- extortive corruption, is corruption that entails the behaviour of a person demanding compensation in exchange for service,
- nepotistic corruption being corruption that refers to the preferential treatment of or unjustified appointment of friends or relations to public office in violation of the accepted guidelines,
- supportive corruption, is that corruption which usually does not involve money or immediate gains but involves actions taken to protect or strengthen the existing corruption, and,
- transactive corruption, is that corruption which refers to situations where the two parties are mutual and willing participants in the corrupt practice to the advantage of both parties.
Bracking (2007:5-6) explains that corruption can also be classified as petty or high level (grand). Petty corruption refers to small acts, or rent-taking actions by public officials. Bribery influencing and receiving gifts are sometimes seen as different forms of petty corruption. Grand corruption can also be referred to as high level corruption or endemic corruption. It is the misuse of public office, public resources or public responsibility for private, personal or group gains (Bracking 2007:5-6). Corruption in public enterprises, regardless of type, needs to be eliminated. The elimination or reduction of corruption improves state public enterprise service delivery and the well- being of the general public.
State public enterprises refer to all those public organisations with some form of independent control, although they may be required to comply with certain policy directives (Ströh, Brynard & Smith 1997:174). State public enterprises, as institutions established by certain acts or the stipulation of relevant legislation, imply that state accepts responsibility for activities of such institutions (Ströh et al. 1997:177).
State public enterprises are essential tools of control, economic planning and development. They are also a means of industrial power and influence, economic self- reliance, implementation of policy, safeguarding public interests, maintenance and enhancement of morality, thus their failure is not an option (Ströh et al. 1997:177).
The public, through the media and public debates, is now questioning the effectiveness of governance processes, especially, where executive directors are not different from boards of public enterprises. Boards of public enterprises refer to a group of professional individuals who are appointed by government to oversee the management of public enterprises. They are not involved in the day-to-day running of public enterprises, whereas executive directors refer to public officials that are responsible for the day-to-day management of public entities (Ströh et al. 1997:177). However, in the case of public enterprises in Zimbabwe, namely Zimbabwe School Examinations Council, Air Zimbabwe, Grain Marketing Board, National Oil Company of Zimbabwe, Zimbabwe Electricity Supply Authority and Zimbabwe United Passenger Company to name a few, executive directors are appointed as members of board of directors which give rise to possible conflict of interest.
Zimbabwean citizens and those who receive services from state public enterprises rightfully expect public enterprises, regardless of type, to act reasonably and in accordance with global acceptable corporate governance best practices and cultural backgrounds (Chikura 2000:6). It is the thinking of those served by state public enterprises at all levels of society that such institutions, as public enterprising organs of the society, will therefore be responsible to the general public and will conform to the standard expected of them in executing their mandate (Chikura 2004:6).
The disintegration of ethics in all areas of state public enterprises, in particular those enterprises in the Harare metropolitan area, have left the sector paralysed. The great feeling of mistrust by the public about the operation of state public enterprises in Harare could be an indicator that corruption should be minimized (Nyoni 2004:4). The Zimbabwe African National Union-Patriotic Front (ZANU-PF) ruling government
established the Anti-Corruption Commission in 1995, but is not effective in discharging its duties perhaps because of under funding and lack of personnel in corruption investigation. The eradication of corruption in public enterprises is critical for enterprise prosperity and development in any country (Matsheza & Kunaka 2001:19).
Statement of the problem and the research question
State public enterprises in the Harare metropolitan area are characterized by corrupt business conduct that include: fraud, graft, nepotism, bribery, abuse of power, ghosting, favouritism, bid rigging and embezzlement among other key indicators which comprise the lack of effective governance. These negative institutional unethical experiences have resulted in public officers failing to observe principles of effective governance, transparency, equity, accountability, responsibility, independence, fairness, discipline and respect. These practices have left the general public dumbfounded on the future of state public enterprises in the Harare metropolitan area.
By drawing upon relevant theories in literature that concern systemic corruption and experiential reality, the main research problem that is addressed by this study is, therefore:
