In my fifth commentary on corruption in Ethiopia this year, I focus on the construction sector. The other commentaries are available at my blogsite.
The cancer of corruption in the construction sector the World Bank (WB) documented in its “Diagnosing Corruption in Ethiopia” is just as malignant and metastatic as in the land, education and telecommunications sectors. According to the WB report:
In the construction sector, Ethiopia exhibits most of the classic warning signs of corruption risk, including instances of poor-quality construction, inflated unit output costs, and delays in implementation. In turn, these factors appear in some cases to be driven by unequal or unclear contractual relationships, poor enforcement of professional standards, high multipliers between public sector and private sector salaries, wide-ranging discretionary powers exercised by government, a lack of transparency, and a widespread perception of hidden barriers to market entry.
Ethiopia’s “construction sector” falls into four categories: roads, water supply and irrigation, power, and other public works including construction of universities, schools, hospitals and markets. Annual spending on roads alone is estimated to be US$1.2 billion. The “government” totally dominates the construction sector. “Ethiopia is unusual compared with most other African countries, which have already fully privatized the design and construction of public works.”
There are multiple and “interrelated drivers of corruption in Ethiopia’s construction sector.” These drivers are “related to deficiencies in accountability (transparency based on clear performance criteria), capacity (availability of sufficient material and human resources and proper procedures), and trust (confidence in the market that allows businesses to invest in increasing their own capacity). In Ethiopia, “A lack of capacity makes corruption possible, a lack of accountability makes corruption happen, and a lack of trust allows corruption to take root.”
The WB report highlights corruption in Ethiopia’s construction sector along six dimensions. The policymaking and regulatory processes are at high-risk area of corruption. Such corruption “has a major effect on sector governance.” Policies and regulations could “encourage, or help hide, corrupt practices” and unless corrected perpetuate corruption by groups or individuals. The Ethiopian “government” “controls the price of construction materials, access to finance, and access to equipment. It controls professional and company registrations. Itmaintains high-level, bilateral infrastructure deals with China and lacks independent performance audits.” According to the WB report, “Many stakeholders are concerned about the possibility of a connection. between the dominant role of Chinese contractors in the road sector and high-level links between the Ethiopian and Chinese governments” and the “lack of effective competition, with Chinese contractors dominating the international market and a limited set of domestic contractors dominating the national market.” These problems are compounded by other factors such as poor quality control, weak enforcement of professional standards and overall lack of transparency. Professionals in the construction sector are reluctant to complain “for fear of being victimized” and believing there is no truly independent body to which they can appeal.” Since the “government is a major client”, “there is a reluctance to express dissent.” .............”
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