P012 – Cleaning up capitalism? Economic Fraud and Anti-Fraud Measures in Contemporary Africa
10 July, 16:00-17:30

Wiegratz Jörg / University of Leeds


This panel aims to contribute to a study of economic fraud in the Global South with an emphasis on sub-Saharan Africa. A number of African economies are characterised by a significant level of economic trickery, fraud and crime in many business sectors – and related to this corruption, intimidation and violence. After two decades of light-touch economic regulation and an ‘unregulated’ expansion of business activities and business power during the rise and height of neoliberalism, some states have recently started to undertake a number of explicit countermeasures to reduce fraud. These have included attempts to restrict import of sub-standard goods. These regulatory initiatives, inspections and crackdowns to ‘clean up’ the economy are complemented by activities of consumer protection organisations that demand to regulate problematic business practices. This panel will shed light on the economic and political-economic drivers, characteristics and repercussions of fraud and/or anti-fraud activities in particular countries.

Faire le ménage dans le capitalisme? Fraude économique et mesures anti-fraude dans l’Afrique contemporaine
Un certain nombre d’économies africaines sont caractérisées par des niveaux importants de malversations, de fraudes et de crime économique dans plusieurs secteurs d’activité – et, par extension par la corruption, l’intimidation et la violence qui en découlent. Après deux décennies marquées par une régulation minimale doublée d’une expansion ‘dérégulée’ des activités des puissances économiques certains pays ont récemment décidé d’introduire une série de mesures destinées explicitement à réduire la fraude, y compris afin de restreindre l’importation de produits de qualité inférieure. Ces initiatives règlementaires, inspections et opérations visant à ‘assainir’ l’économie, sont renforcées par des activités de plus en plus importantes de la part d’organisations de protection des consommateurs qui demandent une régulation des pratiques économiques et des marchés. Les contributions à ce panel se pencheront sur les facteurs politiques et économiques, aux caractéristiques et aux répercussions de la fraude et de la lutte anti-fraude dans certains pays.

Paper 1

Weeks John / SOAS

Copper, Capital Flight and Fraud in Zambia, 1970-2014

Clandestine and illegal capital drains sub-Saharan countries of resources, and in no country more so than Zambia. Through a variety of mechanisms that are detailed in this paper, the privatized coppery corporations extract billions from the country annually. The resource drain from Zambia is estimated over four decades using the Ndikumana and Boyce database. I compare the outflow from Zambia to thirty other sub-Saharan countries. The comparison reveals that countries with natural resource based exports tend to have relatively high levels of fraudulent capital flight, even compared to conflict affected countries. The paper estimates the macroeconomic impact of capital flight, then proposes measures to control it.

Paper 2

Klantschnig Gernot / University of York

The politics of fake medicines in West Africa: reconciling wealth and health?

This paper addresses the burgeoning interest in ‘fake medicines’ – fraudulent or sub-standard pharmaceutical drugs – in West Africa. International and local control agencies and experts have warned of a growing role for the region as a transit point, while also lamenting the prevalence of use of these potentially lethal substances, especially among the poor. Based on archival, government and media sources, as well as interviews with key officials and industry representatives, the paper reconstructs the political dynamics underlying recent claims about the threat of ‘fake medicines’ in Nigeria. The paper asks why these commodities have become a social, health and political problem in the last 20 years and why Nigeria has been singled out as a key focus for international policy responses. It focuses particularly on the work of the regulatory body NAFDAC, which has been hailed as a great success in Nigeria and beyond. By reconstructing the history of the trade and related claims about its dangers, the paper shows how the history of these substances can be traced back to the earliest trade in Western medicines in the region and that concerns about fraudulent drugs have been directly linked to broader crises of the pharmaceutical industry and healthcare in Nigeria, particularly since the onset of structural adjustment and trade liberalisation.

Paper 3

Mouan Liliane / Coventry University

The political economy of oil revenue transparency reforms in postwar Angola

Oil-rich sub-Saharan Africa has been the site of international experiments aimed at rooting corruption out of the region’s extractive sector. Attempts to make sense of governments’ responses to these institutional arrangements have emphasised their compliance or resistance to global standards such as the Extractive Industries Transparency Initiative (EITI). Angola is somewhat unique, in that it has undertaken a series of ‘homegrown’ reforms independently. The aim of this paper is to critically reflect on the key features, drivers and main consequences of this reform agenda. Critics have claimed that these regulatory efforts have had anti-developmental effects, and regularly speak of a trend towards the legitimation of corruption in the Angolan oil industry. While there is indeed enough evidence to prove that these reforms have produced other types of opacity in the oil industry, the paper stresses, however, that one needs to go beyond both the operationalisation of revenue transparency and corruption scandals, to understand the reform process in this petro-state. Specifically, it shows how external actors’ interests and legitimacy shortfalls, domestic structural and political constraints, and even oil’s materiality, combined to shape not only the design, but also the implementation and effects of oil revenue transparency policies. In conclusion, the article warns against imported models for solving complex governance challenges such as resource-related corruption in Africa.

Paper 4

Never Babette / German Development Institute

Social norms, trust and control of power theft in Uganda: Does bulk metering work for MSEs?

Power theft is still rampant in many developing countries. Governments and utility providers tend to favour technical solutions, neglecting the socio-economic dimension. This article analyses the interaction between the socio-economic factors trust, informal social norms, awareness and electricity pricing effect and technical control measures in Uganda. After reforming its power sector, Uganda introduced two technical innovations: bulk metering for micro and small enterprises (MSE) and prepaid metering for households. The bulk metering system imposes a strong form of social control among MSEs. Drawing on semi-structured interviews with 29 MSEs and 16 experts in Uganda, this article shows how well bulk metering works in practice. It finds that trust is key in the relations between electricity user and utility provider, between citizens and government overseeing the energy sector as well as within bulk metering groups of MSEs. The electricity price impacts MSEs’ ability to pay and to some extent also their willingness to pay. Finally, power theft used to be accepted as an informal social norm. Change is happening, but is currently undermined by corruption and patronage networks in the energy sector and the political system, impacting people’s attitude to compliance – regardless of the privatization of the electricity sector.

Paper 5

Wiegratz Jörg / University of Leeds

Anti-fraud initiatives in neoliberal Uganda: a political economy analysis

Decades into the neoliberal transformation, a number of African economies are characterised by significant levels of economic trickery and crime. Notably, some governments have recently undertaken a range of countermeasures in the name of fighting related practices and improving levels of transparency and propriety in their economies in order to boost consumer confidence, economic growth and development. The drivers, characteristics and repercussions of these anti-fraud measures deserve analytical attention. This paper therefore offers an analysis of selected anti-fraud initiatives in Uganda; special attention is given to respective political economy aspects.

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