Wednesday, June 1, 2011

Endemic Corruption

For some time now, I've been sketching out this blog entry in my head.  The question that students ask me the most is, "What business would you start in Senegal?"

My answer is, "I would not start a business in Senegal because the corruption is so deep - and at so many layers - that I would have to spend all my time on managing and controlling instead of doing something constructive such as new product innovation and providing superior customer service."

Let's start with the obvious corruption: government employees.  Remember when we used to call these people "public servants?"  Today in Senegal, even the military has finally succumbed to endemic corruption.  The Gendarme (essentially, the armed forces that also serve as a general police force for most of the nation) were considered one of the bright spots for many years in Senegal.  The following story is more representative of their role today.

Last week, the director of our program was returning from a rural location and his vehicle was pulled over by the Gendarme "for inspection."  Rather than be satisfied with just one vehicle, this particular officer then proceeded to pull over approximately ten more vehicles and told everyone to wait.  Essentially, the officer would then determine which driver was most likely to pay a "fine" directly to him for some imagined infraction.  This process would likely continue for most of the day.

Everyone knows about this type of corruption in Africa, but no one does anything to stop it.  That's simply because this corruption can only occur if it is sanctioned from the top of an organization.  To me, it's shameful, but I don't think this even captures the idea that the entire society is corrupt. 

The "private" corruption is why Senegal - and most other African nations - will never be a good place to do business.  I recently took over as the financial manager for my institution after the previous employee resigned.  There were things I expected to see such as "padded" expense reports, pre-paid gasoline cards that seem to be spent when no one is traveling, phantom employees, etc.

What I was unaware of was the outrage and scandal I would cause when I took the lead role in disposing of assets that are perfectly useable, but obsolete for our purposes.  First, the employees were outraged that the assets were not given to them as a donation.  Who would receive the assets?  Well, that was for the Operations Manager to decide, but - surely - these were "their" assets.  And, if we were going to sell the assets, then the staff was obviously much more qualified than I was to locate the buyers.

Here's where the scandal occurs: the real reason the employees were so angry was because I - the Whitest Guy in West Africa - was going to keep to keep all the "commissions" that were rightfully theirs.  Most readers should be shaking their heads right now (as I did) in wonderment, but any time an asset was previously sold at our institute, the person who sold it took a percentage of the sales price right off the top as their "commission" before turning in the remaining money to the company.  How much commission?  Well, no one knows because that gets negotiated between the buyer and seller (our employees!). 

It's not enough that we pay employees wages and salaries that are significantly above market rates, most of the senior administrative staff considers it their RIGHT to pocket 10% to 30% on EVERY transaction - sale or purchase - that our organization endeavors to make.  And this is part of the culture!  After all, just because they work in the private sector and not government doesn't mean they aren't entitled to take a percentage of each transaction.  In government, we call that a bribe in most parts of the world.  In private industry, we call it "theft", but in Senegal it's much more palatable to call it a "commission."

You want an airline ticket?  One professor asked for a ticket home during Christmas break.  He had a travel allowance of $1,500.  I booked my ticket over the Internet for $1,250.  His price (to the same destination) was $1,700 when purchased through our organization.  The extra $450 was meant to be split between the travel agent and whichever employee at our organization made the call.  When he complained to the employee, she responded, "You're rich, so you can afford it." 

By the way, she's the person I replaced as financial manager...

Some people might be laughing and saying, "It looks like THEY are teaching YOU a lesson or two about how to do business."  But, they're not.  They have raised the level of mistrust such that I now have no desire to do any business with them. 

Lest you think it's just our organization, I spoke with the manager at another education institute about how he handled this problem.  His answer was simple, "I work 12 to 14 hours a day and do all the purchasing myself."  He has one advantage in that he is Lebanese, and there is a large contingent of Lebanese businesspeople in Dakar.  He only does business with the Africans when he has to. 

Even my local Rotary Club is having the same issue with regard to bringing donated medical devices into the country.  The biggest issue (after determining how to avoid bribery at the port) is that most of the organizations that would be prime recipients for these supplies are very likely to re-sell them.

And the biggest irony of all?  This is a country that is widely known for a large tribe a businessmen known as the Marabout.  Go ahead and look them up; they are represented throughout the world and their basic system of accounting is built on... trust.

1 comment:

  1. Hi White guy in Senegal,

    I really enjoyed reading your blog entry. I am based in London but need to do some primary reseach into how local business people in Senegal view corruption.

    I have a short survey, just 4 questions. Could I send it to you somehow, maybe you might be interested to give me your thoughts?

    My email is I could write you more about my research via email and could even ring you to discuss if you have any questions.

    Thanks again for the very insightful blog post. I look forward to hearing from you.

    Best regards,