v The study is to generate data which anti-corruption agencies and their partners could utilize to develop more effective tools to respond to and track progress in fighting corruption.
v The study is commissioned by the Centre for Accountability and Rule of Law (CARL) with funding from Department for International Development (DFID) and support from Christian Aid, Restless Development and Budget Advocacy Network (BAN).
v Data was collected from ten (10) sectors which form 72.5 percent of the economy. The sectors studied include; agriculture, mining, energy, fishery, construction, banking, education, health, transport and communications.
v The Study derived data from official Government records, extensive key informant interviews, and records from empirical literature and unofficial sources compiled between August and mid-December, 2019.
v Over 50 key informants were canvassed from Government agencies, including oversight bodies, revenue management agencies, and vote controllers, private sector actors, academics, non-governmental organizations and the media to help build a picture of corruption estimates in the country.
v The research adopted a two-phase approach for analysis of the data generated.
v The first scenario/phase presents estimates of officially published or known figures on corruption. Figures generated through official Government of Sierra Leone (GoSL) annual and special audit reports and where findings describe the discrepancies as acts of corruption and recommended that monies misappropriated be refunded by individuals or establishments.
v The second are figures from the Anti-Corruption Commission records, police and judicial records where culpability was established for identified acts of corruption. Figures from these two broad categories are combined to form the first level or estimate of the cost of corruption for the two years under study.
v Relevant to note though is, that this study largely covers data from the GoSL annual and special audit reports.
v Overall, the volume of corruption for the period 2016-2018 ranges between 10.45 Trillion to 15.9 Trillion Leones (Equivalent to US$1.47 to 2.18 Billion). The corruption volume was higher than the combined revenue for the three years which was 8.8 Trillion Leones. At the minimum, an average 12.7 percent GDP was lost to corruption each of the three years.
v The Financial Year 2017 recorded the highest volume of corruption even though the Government had announced that it was enforcing some austerity measures. The value of corruption in 2017 alone was Le7.2 Trillion, equivalent to 26.3 percent of GDP for that year and 2.6 times tax revenue. Volume of corruption in 2017 was 3.1 times capital expenditure and 1.1 times total expenditure of the Government.
v In 2016, the value of corruption was Le1.9 Trillion, equivalent to 7.9 percent of GDP, 76.8 percent of tax revenue, 14.5 percent of capital expenditure and 37.4 percent of total government expenditure.
v The sectors which recorded the highest volumes of corruption are: construction (Le4.9 Trillion); Mining (2.35 Trillion) and Electricity (Le1.16 Trillion). The figures on corruption may appear high but are likely underreported.
v The figures are obtained from secondary sources. It may also be the case that because of the unavailability of data for 2016 and 2018, less corruption was recorded than in 2017.
v There is a sharp decline in corruption in 2018, perhaps due to the change in Government, the hype around the Commissions of Inquiry that was proposed to be established and the aggressive posture of the Anti-Corruption Commission leadership, Francis Ben Kaifala Esq.
KEY RECOMMENDATIONS IN THE REPORT:
v Further anti-corruption approaches to be adopted, such as intensifying openness and transparency in sharing public financial management data in newspapers, radio and television, including terms of contracts, and procurement processes, and publicly accessible beneficial ownership registers. The publishing of data on social media and various analytic apps will help Government to gain public support for its programmes and intensify citizen monitoring.
v Ensure legal compliance in all contracting processes.
v Training CSOs and Media Actors on addressing corruption at the budget allocation stage. ACC and MDAs to take steps to tackle corruption arising from the misallocation of resources. The ACC Prevention Department to engage with MDA resource allocation processes, ensuring that the integrity systems are properly built around key budget lines, especially those relating to procurement and contracts to the private sector.
v Conduct operational research on drivers and patterns of corruption in major purchase and contracting processes.
v Automate public procurement system. To put in place transparent and open procurement management system by instituting an online and open procurement and contract system. The National Public Procurement Authority (NPPA) together with the ACC to be supported to establish an online platform for procurement processes with full involvement of the public.
v Political Party financing. The urgent need for PPRC and ACC and other agencies to work together to ensure that political party funding is effectively regulated, since political parties are sponsored by godfathers and individuals who are rewarded with contracts and appointments when the political party attains power.
v An effectively implemented money-laundering framework helps limit corruption. It is noted however that, the FIU lacks the range of enforcement powers to help it obtain evidence and is subject to the direct supervision of its operational activities by political authorities.
v Better screening and monitoring of Politically Exposed Persons (PEPs). With improved asset declaration regime and better collaboration between the ACC and FIU, both institutions can work with the central bank and other financial institutions to ensure that the Financial Action Task Force (FAFT) recommendations dealing with PEPs are fully implemented.
v Government to embark on long-term high-return institution building activities, coupled with generating political will to hold those who transgress accountability standards. There is need to focus energy on the critical growth sectors by establishing web-based platforms and block chain technology to provide greater transparency to Public Financial Management (PFM) in these sectors, including contract negotiations and procurement systems which form a significant source of corruption and leakage in Sierra Leone.
THE STUDY FINDINGS SHOW FIVE FACTS ABOUT CORRUPTION AND STATE BUILDING IN SIERRA LEONE:
1. Corruption intensified in the last year to election.
2. Corruption starts at the planning stage of budgets of Ministries, Departments and Agencies.
3. High volumes of illicit financial flows recorded in high return sectors which have the biggest potential to boost the revenue base of the country and thus deprive Sierra Leone of resources needed to invest in poverty reduction activities.
4. Weak capital formation by local elites means that the proceeds of corruption is unproductive.
5. Impunity and weak institutions. Impunity is the biggest driver of financial loss to the State. Failure to adhere to official audit recommendations remains pervasive.