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Chancellor College

Centre for Social Research

Final Report

Governance and Corruption Survey 2013

Prepared

By

Blessings Chinsinga

Boniface Dulani

Peter Mvula

Joseph Chunga

May 2014

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Table of Contents

ABBREVIATIONS ............................................................................................................................................... 4

EXECUTIVE SUMMARY .................................................................................................................................... 5

ACKNOWLEDGEMENTS ................................................................................................................................ 16

1. SETTING THE CONTEXT ........................................................................................................................ 17

1.1 INTRODUCTION AND BACKGROUND ........................................................................................................... 17

1.2 ORGANIZATION OF THE REPORT ............................................................................................................... 19

2. METHODOLOGY AND SAMPLE DESIGN ............................................................................................ 20

2.1 THE HOUSEHOLD SURVEY SAMPLE SIZE .................................................................................................. 20

2.2 THE SAMPLING FRAME .............................................................................................................................. 20

2.3 SAMPLING PROCEDURES ........................................................................................................................... 21

2.4 THE ENTERPRISE SURVEY ........................................................................................................................ 21

2.5 PUBLIC OFFICIALS’ SURVEY ...................................................................................................................... 22

2.6 FIELD PERSONNEL ..................................................................................................................................... 23

2.7 DATA ENTRY, EDITING AND ANALYSIS ...................................................................................................... 24

2.8 PROBLEMS AND CHALLENGES ................................................................................................................... 24

3. PERCEPTIONS AND EXPERIENCES OF GOVERNANCE AND CORRUPTION ............................. 25

3.1 USERS VIEWS OF PUBLIC AGENCIES’ PERFORMANCE ............................................................................. 25

3.2 HONESTY AND INTEGRITY OF PUBLIC INSTITUTIONS ................................................................................. 27

3.3 INSTITUTIONAL PERFORMANCE AND INTEGRITY ........................................................................................ 30

3.4 CORRUPTION AND DEVELOPMENT............................................................................................................. 31

3.4.1 Views of Households ...................................................................................................................... 31

3.4.2 Views of Businesses ...................................................................................................................... 32

3.5 UNDERSTANDING CORRUPTION ................................................................................................................ 33

3.5.1 Views of Citizens............................................................................................................................. 34

3.5.2 Views of Public Officials ................................................................................................................. 35

4. THE PREVALENCE AND TRENDS OF CORRUPTION ....................................................................... 36

4.1 SERIOUSNESS AND FREQUENCY OF CORRUPTION ................................................................................... 36

4.1.1 View of Citizens............................................................................................................................... 36

4.1.2 Views of Businesses ...................................................................................................................... 37

4.1.3 Views of Public Officials ................................................................................................................. 39

4.2 MEASURING THE COST OF CORRUPTION .................................................................................................. 43

4.3 SOURCES OF CORRUPTION ....................................................................................................................... 44

4.3.1 Typical Patterns of Corruption ...................................................................................................... 44

4.3.2 Users’ Experiences with Public Institutions ................................................................................ 46

5. GOVERNANCE AND CORRUPTION IN KEY SECTORS .................................................................... 48

5.1 THE LEGAL AND JUDICIAL SECTOR ........................................................................................................... 48

5.1.1 Concerns of Businesses over Anti-corruption Legislation and Regulations .......................... 48

5.1.2 Access to the Court System .......................................................................................................... 50

5.2 EDUCATION SECTOR .................................................................................................................................. 54

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5.3 HEALTH SECTOR ........................................................................................................................................ 56

5.4 PUBLIC UTILITIES ....................................................................................................................................... 57

6. FIGHTING CORRUPTION ....................................................................................................................... 61

6.1. POLITICAL WILL.......................................................................................................................................... 61

6.2 PUBLIC AGENCIES IN THE FIGHT AGAINST CORRUPTION .......................................................................... 62

6.3 REPORTING OFFICIAL CORRUPTION ......................................................................................................... 62

7. CONCLUSIONS AND RECOMMENDATIONS ...................................................................................... 65

REFERENCES .................................................................................................................................................. 67

List of Tables

TABLE 1: SELECTION CRITERIA FOR NATIONAL LEVEL PUBLIC OFFICIALS ................................................................... 23

TABLE 2: RESPONDENTS FOR THE PUBLIC OFFICIALS’ SURVEY .................................................................................. 23

TABLE 3: PREVALENCE OF CORRUPTION IN GOVERNMENT ....................................................................................... 39

TABLE 4: PREVALENCE OF CORRUPTION IN SPECIFIC ORGANIZATIONS ...................................................................... 40

TABLE 5: EDUCATIONAL SCHOOL ENROLMENT BY TYPE, 2010 AND 2013 ................................................................ 55

TABLE 6: EVALUATION OF HEALTHCARE BY FACILITY USED (2006 AND 2010 RESULTS) ......................................... 56

TABLE 7: TYPE OF CONNECTION TO PUBLIC UTILITIES, 2006-2013 ......................................................................... 58

TABLE 8: RELIABILITY OF PUBLIC UTILITY SERVICES, 2006-2013 ............................................................................ 58

List of Figures

FIGURE 1: CITIZEN’S EVALUATION OF THE PERFORMANCE OF PUBLIC INSTITUTIONS .............................................. 25

FIGURE 2: PRIVATE SECTOR’S EVALUATION OF PUBLIC INSTITUTIONS PERFORMANCE ........................................... 26

FIGURE 3: CITIZENS’ ASSESSMENT OF INTEGRITY AND HONESTY OF PUBLIC INSTITUTIONS ................................... 28

FIGURE 4: BUSINESSES’ ASSESSMENT OF INTEGRITY AND HONESTY OF PUBLIC INSTITUTIONS .............................. 29

FIGURE 5: RELATIONSHIP BETWEEN INTEGRITY AND PERFORMANCE ....................................................................... 30

FIGURE 6: KEY CONSTRAINTS TO DEVELOPMENT RECOGNIZED BY MALAWIANS ..................................................... 31

FIGURE 7: BUSINESSES’ VIEWS ON CONSTRAINTS TO OPERATION AND GROWTH ................................................... 33

FIGURE 8: IMPACT OF CORRUPT ACTS ON HOUSEHOLD WELLBEING ....................................................................... 34

FIGURE 9: IMPACT OF CORRUPT ACTS ON THE ECONOMY ........................................................................................ 35

FIGURE 10: VIEWS OF CITIZENS ON SERIOUSNESS OF CORRUPTION ....................................................................... 37

FIGURE 11: SEVERITY OF OBSTACLES WHEN CONDUCTING BUSINESS WITH GOVERNMENT ................................... 38

FIGURE 12: IMPORTANCE OF CAUSES OF PUBLIC SECTOR CORRUPTION ................................................................ 42

FIGURE 13: TYPICAL PATTERNS OF CORRUPTION ..................................................................................................... 45

FIGURE 14: PERCENTAGE OF CONTACTS LEADING TO REQUEST FOR GRATIFICATION ............................................ 46

FIGURE 15: OBSTACLES TO ACCESSING COURT SYSTEM, 2013 .............................................................................. 50

FIGURE 16: BUSINESS SIZE AND THE PROPENSITY TO INITIATE COURT CASES, 2013 ............................................ 52

FIGURE 17: ALTERNATIVE DISPUTE MECHANISMS/INSTITUTIONS UTILIZED .............................................................. 54

FIGURE 18: ACCESS TO PUBLIC UTILITIES BY LOCATION, 2013 ................................................................................ 57

FIGURE 19: UNOFFICIAL AND GRATIFICATION PAYMENTS FOR SERVICE UTILITIES, 2013 ....................................... 59

FIGURE 20: PUBLIC OFFICIALS’ OPINION ON POLITICAL WILL TO FIGHT CORRUPTION ............................................. 61

FIGURE 21: CITIZENS’ ASSESSMENTS OF INSTITUTIONS PERFORMANCE IN COMBATING CORRUPTION .................. 62

FIGURE 22: OBSERVATION AND REPORTING OF CORRUPT ACTS ............................................................................. 63

FIGURE 23: REASONS FOR NOT REPORTING CORRUPT ACTS ................................................................................... 64

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Abbreviations ACB Anti-Corruption Bureau

ADMARC Agricultural Development and Marketing Corporation

ADR Alternative Dispute Resolution

AU African Union

CSR Centre for Social Research

EA Enumeration Area

ESCOM Electricity Supply Commission of Malawi

ISIC International Standard Industrial Classification

LDF Local Development Fund

MANEB Malawi National Examination Board

MBC Malawi Broadcasting Corporation

MEC Malawi Electoral Commission

MP Member of Parliament

MTL Malawi Telecoms Limited

NSO National Statistical Office

ODPP Office of Director of Public Prosecution

OPC Office of President and Cabinet

SAFC Southern African Forum against Corruption

SPSS Statistical Package for Social Scientists

UN United Nations

YEDEF Youth Development Enterprise Fund

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Executive Summary Introduction and Methodology

The Governance and Corruption Survey was carried out for the third consecutive time in 2013 by the Centre for Social Research (CSR). The main purpose of the survey is to systematically monitor and track the trends of corruption in the country. The ultimate goal of the survey is to help the Anti-Corruption Bureau (ACB) to refocus, refine and rediscover altogether its anti-corruption strategies on the basis of the findings. The results are thus critical for the purposes of informing the country’s overall strategy in curbing and combating corruption.

Concerted anti-corruption efforts cannot be overemphasized because the negative impact of corruption on a country’s development potential is widely recognized. It is, in fact, argued that the tentacles of corruption do not only affect a country’s development agenda but also its political wellbeing by undermining the legitimacy of a regime and institutions of the state. In short, rampant corruption in a society is symbolic of deep institutional problems, indicating failure of transparency and accountability which are essential characteristics of good governance.

In response to the concerns of increasing costs for executing the survey since its introduction in 2006, the methodological framework was somewhat tweaked as an integral part of the initiative to make the survey affordable. The review and consequent modification of the methodological framework are part of the transitional modalities that would ensure that the survey is affordable, focused and dynamic enough to respond to challenges as they emerge as it would be held at fairly regular intervals. These transitional modalities shall, inter alia, involve systematically isolating key corruption issues that should be subjected to regular monitoring, and that would, indeed, pay the expected dividends in the fight against corruption in a survey that would be cost efficient through a comprehensive qualitative assessment whose goal will be to fully grasp the underlying dynamics of corruption in the domestic context while, of course, not losing sight of the international norms, standards and practices.

The survey comprises three independent modules namely: 1) household survey; 2) public officials’ survey; and 3) business enterprise survey. As detailed out in the sampling procedures (see section 2.3), the sample size for the household survey was reduced from 1,500 to 1,200; from 500 to 300 for the business enterprise survey; and from 1011 to 337 for the public officials’ survey. In each case, the reduction in the sample sizes was done on the basis of rigorous statistical computations which showed that the new sample sizes would not at all compromise the scientific reliability and validity of the results.

The survey was carried out for a period of 40 days following intensive training of the field teams. The field team comprised of seven mobile teams each with 5 Research Assistants and 1 Supervisor. These were responsible for the collection of data from Households, Enterprises and Public Officials. The field teams were closely supervised by a team of Principal Investigators that included Dr. Blessings Chinsinga, Dr. Boniface Dulani, Dr. Peter Mvula, and Mr. J. Chunga.

The data entry was carried out using the CSRro template developed for each of the three modules. This was later converted to the Statistical Package for Social Scientists (SPSS). The SPSS analysis principally involved frequency and cross tabulations mainly for consistency check. The final stage of data analysis entailed the production of graphs and tables modeled on the structure and format of the previous reports of the survey.

The major challenge encountered related to the reluctance of some respondents to participate in the survey especially those from the public sector. This could be attributed to the fact that the

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survey was carried out almost immediately after the news about the ‘cashgate scandal’ at Capital Hill had just broken out. However, regardless of this particular challenge, the survey teams managed to complete the interview quotas that were set for the public sector officials except for the Ministers. The plan was to interview 5 Ministers but none of them was available despite repeated efforts to interview them for a period of more than four weeks.

Findings

Perceptions and Experiences of Governance and Corruption

The 2013 survey results show that the efficiency levels and the quality of services offered by public agencies have substantially deteriorated both from the perception of households and businesses although the assessment is particularly negative on the part of the latter. In the 1 to 4 rating scale, the rating of 3.0 denotes somewhat good performance whereas the rating of 2.5 is deemed neutral. This implies that a public agency is neither doing a poor nor good job while any rating below 2.5 implies poor performance. Consequently any rating of above the 2.5 threshold denotes an overall positive rating of an agency’s performance.

The main concern is that none of the agencies received a rating of 3 from both households and businesses. In 2010, at least 4 agencies received a rating of 3 from households while the situation for businesses did not change at all in 2013. None of the agencies received a rating of 3 from businesses in 2010 as well. In both cases the number of public agencies receiving the rating of either 2.5 or above has substantially declined from 16 in 2010 to 12 in 2013 and from 20 in 2010 to 3 in 2013 for households and businesses respectively.

The top performing agencies in as far as households are concerned include the Malawi Postal Corporation, Malawi Telecommunications Limited (MTL), Local Development Fund (LDF), Malawi Electoral Commission (MEC) and Malawi Broadcasting Corporation (MBC). The list is essentially the same as it was in 2010. The only new entrant is the LDF. While Traffic Police and the Administrator General remain amongst the least performing public institutions during this period, the new entrants include ADMARC, Accountant General and Public Education Services replacing Immigration Department, Ministry of Agriculture and the Youth Enterprise Development Fund (YEDEF) from the 2010 lineup.

The lineup of the top performing public agencies from the perception of businesses has also changed with only the Malawi Bureau of Standards remaining in this category between 2010 and 2013. The new entrants to this elite list include Telephone Providers, Registrar general, Malawi Fair Trade and Competition Commission and National Roads Authority. ESCOM, Immigration Department, and Administrator General no longer make the shortlist of least performing public agencies from the perspective of businesses. These have been replaced by ADMARC, Accountant General and Office of the Director of Public Procurement (ODPP). What is, however, striking is that the Accountant General has slumped from being one of the top performing public institutions in 2010 to one of the least performing public institutions for households in 2013.

There have been some notable changes in the ratings of the levels of honesty of public institutions by households between 2010 and 2013. Only two out of the top five performing institutions were retained from 2010 in the 2013 shortlist. These are Churches/Religious Bodies and Public News Media. The new entrants to the top five include Ministry of Agriculture, Press Trust and Ministry of Gender. Only Political Parties and Police excluding Traffic remain in the shortlist of least honest institutions according to the 2013 survey results. The new entrants include the Ministry of Finance and Office of the President

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and Cabinet (OPC). For businesses, the highly rated public institutions in terms of honesty include Malawi Postal Services, Ministry of Gender, Telephone Providers, Courts and Building Department. Only Malawi Postal Services survives from the 2010 shortlist. With regard to the least honest public institutions, businesses rated as such Political Parties, Members of Parliament, Traffic Police, Office of President and Cabinet (OPC) and Ministry of Finance in 2013. The new entrants to the 2010 shortlist are only Office of President and Cabinet (OPC) and Ministry of Finance.

While the results of the survey in 2010 represented an improvement in how both businesses and households rated the honesty of public institutions from 2006, the results of the 2013 survey show sharp deterioration in the overall integrity of public institutions. As many as 16 public institutions were either rated 3 or above while up to 31 crossed the 2.5 threshold in 2010. In the 2013, only 2 were rated 3 or above while only 22 crossed the 2.5 threshold. While in 2010 businesses rated 8 public institutions either 3 or above and 40 above the 2.5 threshold only were rated either 3 or above and only 20 crossed the 2.5 threshold respectively.

Just like in the previous surveys, there is a direct correlation between the levels of performance and perceived integrity of public institutions. Thus the higher levels of integrity correspond with higher levels of performance of public institutions. The fact that the performance of a public institution progressively improves as its integrity is evaluated positively suggests that concerted efforts must be taken to improve the integrity of public institutions.

Unlike in the 2010 survey in which corruption was distinguished as the third major factor undermining the country’s concerted development efforts (79%) from the households’ perspective, the 2013 results pushes corruption to second at 89.1%. This clearly shows that the incidence and effects of corruption have been worsening. In the 2006 survey, corruption was the fourth most important constraint at 59%. This is a serious cause of concern in the fight against corruption as well as in the development endeavours of the country. Just as in the 2010 survey, there is a striking similarity in terms of the factors identified as a hindrance to national development both in urban and rural areas. The first top five factors identified are the same and in the exact same order. These included high prices of food, corruption, unemployment, food availability and low quality of education.

According to the 2013 survey results, the top five factors that businesses perceive as constraining their operations have not changed. They include inflation, financing, corruption in the public sector, exchange rate, and crime/theft/disorder. There are, however, some changes in the order of importance and the magnitude of their rating. While in the 2010 survey the most serious constraint that businesses were facing was financing (41.8%), this has been replaced by inflation at 78.7%. And while financing was a leading constraint rated at 41.5% in 2010, it was rated at 70.2% in 2013 as the second most important constraint. Inflation has moved from being the fifth most important factor at 30.9% in 2010 to the most important factor in 2013 at 78.7%.

The main concern, however, is that although public sector corruption is no longer the second most important factor constraining the operations and growth of businesses, the reported levels shows that the problem of corruption is worsening instead of getting better. In the 2006 survey, corruption was the seventh obstacle affecting business operations and growth at 23%, rising to 39% in 2010 and peaking to 62.9% in 2013. The magnitude of corruption as an obstacle to the operations and growth of businesses is even greater when the incidence of private sector corruption is taken into account. In the 2013 survey, the incidence of private sector corruption was estimated at 43.4% compared to 28.2% in 2010.

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Both households and businesses recognize and feel the impact of corruption on their livelihoods and operations respectively. For instance, nepotism just like in the 2010 survey remains the most devastating corrupt act on the welfare of households rising from 77% in 2010 to 80% in 2013. The perceived level of the impact of the rest of corrupt acts has increased between 2010 and 2013. This generally means that the corruption situation in the country has been worsening since the last survey was conducted in 2010. Public officials continue to establish a close relationship between various corrupt acts and the overall health of the economy. However, there have been changes in the order of the corrupt acts’ perceived impact on the overall health of the economy. Just like in the 2010 survey, bribes to avoid taxes and nepotism remain the most devastating impacts on the overall health of the economy. The fact that the sale of arbitration court decisions remains the least devastating corrupt act on the health of the economy is at least a vote of confidence in the country’s judiciary.

The Prevalence and Trends of Corruption

There is widespread perception among citizens, businesses and public officials that the incidence of corruption has become more serious and its frequency has increased in the country. As high as 96% of ordinary Malawians feel that corruption is currently a very serious problem, a jump from 83% in 2010. Up to 43% of businesses in 2013 reported that it is common to pay gratification in order to get things done which is a considerable jump from 27% in 2010. There is a huge turnaround in the perception of public officials on the status of current prevalence of corruption compared to prevalence of corruption over ten years preceding the survey. Up to 78% of public officials believed that corruption in government was prevalent ten years before compared to only 27% in 2010. In 2013, 82% of the public officials hold that corruption in government is prevalent now compared to 48% ten years ago.

The seriousness of the incidence of corruption in the country is underlined by the very high perception that the problem of corruption has gotten worse. Up to 92% of Malawians feel that the state of corruption is worse than it was ten years ago. This is a clearly significant increase from 2010 where only 50% of Malawians believed corruption was worse compared to ten years before that. Most Malawians feel that public officials are the main culprit in as far as the worsening corruption situation is concerned. Up to 62% Malawians believe that public officials are the leading perpetrators of corruption in the country. They were also ranked first at 54% in 2010. While the general direction is that the frequency of cases of corruption has increased, it is, however, not regarded as something that happens always when citizens interact with public officials.

The businesses were equally split between those who indicated that it is common for firms in their respective line of businesses to pay gratification to get things done and those who said it is rare at 43%. What is important is the fact that this represents a rise from 27% of those who are saying it is common and a corresponding fall from 53% for those who said it is rare in 2010. This observation suggests that businesses are getting entangled in corruption especially considering that up to 64% of businesses said it is rare for them to pay gratification in 2006. However, the noteworthy difference is between businesses that make sales to government and those that do not. Up to 58% of firms that conducted business with government in the past two years indicated that it is common for them to pay gratification. This is in contrast with 38% for those which did not. In 2010 the pattern was similar except that the proportion of those who had made sales to government and said it is common has risen from 33% to 58%. Like in 2010, delayed payments are the most widely acknowledged problem with 7 out of every 10 businesses saying it is a major problem. This has risen from 5 in every 10 firms observed in 2010.

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As high as 82% of public officials that said corruption is prevalent compared to only 27% who said so in 2010. It is, however, striking that while public officials indicate that corruption is generally rampant in the public service, they think that it is not the case in their work places regardless of the type of institution they are working in. Compared to three years ago, most public officials think the state of corruption has remained almost the same except for the Malawi Revenue Authority (MRA) who feel that it has been completely stamped out.

The survey established that gratification paid to public officials represents a slightly high percentage of their salaries in 2013 compared to 2010. Public officials reportedly receive an average of 32% of their salaries in gratification, which is an increase from 28% in 2010. In terms of the distribution of gratification, typically a public official shares an average of 26% of the gratification with his or her superiors; 27% with colleagues and 27% with political party agents or politicians in general. This is slightly different from the distribution indicated in 2010 where superiors would get 26%; colleagues 30% and politicians would benefit 15%.

The perception among public officials is that there is a slight decrease in the number of public officials who say jobs are acquired by gratification. Only one in every 10 indicated this was the case, dropping from 2 out 10 in 2010. This is in tune with the earlier observation that public officials generally think that cases of corruption are rare in their own organizations. The paradox, however, is that while few public officials think jobs are obtained through gratification, the percentage of those saying that the most qualified candidate always or usually get jobs decreased from 66% in 2010 to 59% in 2013. This implies that there are significantly many cases where people are still employed based on other factors instead of merit. There is an increase in the proportion of public servants who feel that professional achievements are at least recognized with some rewards. A combination of those who think their organizations reward fully or often stands at 18% which is a substantial increase from 10% in 2010. Consequently, the worsening corruption in the public sector can be explained less by lack of rewards for those officials who say they are professional in the discharge of their duties.

According to public officials, the main cause of corruption in the public service is low salaries followed by lack of transparent political processes. Low salaries remain the leading perceived cause of corruption at 90% up from 86% in 2010. Lack of transparent political processes was reported at 83% replacing lack of incentive mechanisms which was the second most important factor in the 2010 survey results. This supports earlier observations that politicians seem to be more involved in corruption now than in 2010 as underlined by the fact that they now receive a larger share in the gratification distribution chain and the gratification they receive accounts for 80% of their salaries which is above any other public official. It is further worth noting that 64% of public officials think tolerance or acceptance of corruption as a norm is an important cause of corruption which is a considerable increase compared to 57% in 2010. This certainly calls for intensified efforts to deal with the evils of corruption to prevent it from becoming systematic.

Just like in the 2010 survey, businesses acknowledge the cost of corruption and indicate that they are ready to pay more if the business environment was corruption free. The survey findings show that businesses are prepared to pay an additional average of 13% of their revenues, a percentage higher than in 2010. The mean percentage is just marginally higher for registered businesses (13%) than for unregistered businesses (12%). Compared to 2010, there has not been any change for registered businesses while the mean for unregistered businesses has leaped from 3%. This means that there is no difference between the effects of corruption on registered and unregistered businesses.

The survey established that typically, it is public officials who instigate corrupt acts in the interactions with citizens and businesses. The worrying issue is that public officials actually

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acknowledge that they are the leading perpetrators of the problem of corruption. The fact that public officials ask for gratification in order to deliver services to citizens and businesses, the latter realize that if they want things done they have to comply or, indeed, initiate gratification. This poses a great risk since such an attitude among citizens and businesses may eventually entrench corruption.

According to the survey findings, there are only a few public institutions whose dealings with the firms do not involve asking for gratification. The Traffic Police are the most corrupt of all institutions surveyed with its officers asking for gratification in 4 out of every 10 contacts they have with businesses. The positive development, however, is that compared to 2010, the number of institutions with a clean sheet has increased from 3 to 6. While in 2010, the Internal Procurement Committees were considered most corrupt, the Traffic Police have now replaced them at the top of the table. The former are now ranked 12th, with only 5% of the contacts being associated with payment of gratification contrasting with 33% in 2010. However, some institutions such as the Traffic Police, General Police and Road Traffic Directorate require more targeted efforts to combat corruption because they remain among the most corrupt as was the case in 2010.

Governance and Corruption in Key Sectors

Judicial Sector

The 2013 survey results, when compared to those obtained in 2010, show that Malawi has regressed on a number of indicators. In 2013, just less than half (49%) of businesses owners felt that obtaining laws and regulations affecting their firms were very or somewhat easy. This is down 14 percentage points from 63% who offered a similar response in 2010. Although the proportion of business owners who feel that laws and regulations affecting their businesses has become somewhat or increasingly easy to obtain has dropped between 2010 and 2013, it is important to note that the 49% saying so in 2013 is still higher than 38% that offered this response in the baseline survey in 2006.

Similar assessments were made with regard to predictability of changes in rules and regulations governing the business sector and the consistency of general laws and regulations and their interpretations. The survey results show that the gains that were recorded in 2010 have not been sustained, and in many instances, the gains that were registered in 2010 are facing a serious threat of erosion. The negative trends between 2010 and 2013 further suggest that although the business environment in 2013 remains much better compared to the base year of 2006, there has since been a downward trend in relation to easiness of obtaining laws and regulations affecting firms, predictability of changes in business rules and regulations and consistency of general business laws and regulations and their interpretations. There is thus need for renewed efforts to improve across all areas in order to regain and boost the confidence of the business sector.

The major obstacles to using the court system have essentially remained the same between 2010 and 2013 for both households and businesses. The major factors cited by households included: high lawyer fees (79%); the view that court decisions are influenced by corruption (73%); and the lengthy duration of the court processes. For businesses, the major factors included: long court processes (76%); the belief that court decisions are influenced by corruption (69%); high fees for lawyers (59%); and the concern that there is lack of enforcement mechanisms to implement court decisions (59%). When compared to the 2010 survey results, there is a general sense of the worsening of the factors that limit court access for both businesses and ordinary citizens. The main concern, however, is that the perception that court

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decisions are influenced by corruption has gone up between 2010 and 2013 among both business owners and individual households.

The increasing challenges in accessing judicial services coupled with lengthy delays before cases are disposed of appear to be dissuading businesses and individuals from contemplating the pursuit of further court cases. This is reflected in the fact that while in the 2010 survey 48% of businesses who had initiated legal action said that their experience with the court system would lead them to sue again, only 30% indicated the same in 2013. This probably implies increasing negative experiences with the court system or processes by the business sector that needs special attention. This should be a cause of concern especially coming after the introduction of commercial courts that are expected to expedite the handling of cases involving business enterprises.

There is an increase in the usage of Alternative Dispute Resolution (ADR) among both businesses and citizens. Thus 41% and 45% of citizens and businesses used the ADR in 2013 compared to 32% and 38% in 2010 respectively. This can either imply that the conflicts are not serious enough that both citizens and businesses are utilizing the ADR option more thus leaving the courts to attend to the more serious cases or it could simply be a function of the challenges that both businesses and citizens face in accessing court services. The top three ADR options for businesses are: friend and family (26%); formal mediator/arbitrator (22%) and lawyers (19%) while those for citizens include MPs, traditional leaders, marriage counselors, friends and family.

Education Sector

Just like in 2010, a very high proportion of children (84%) were attending government schools in 2013. Enrollment in private and mission schools was estimated at 10% and 6% respectively. The fact that public institutions enroll the largest proportion of Malawian school children should serve as an important reminder to government to invest more resources in the sector to prepare the country’s children for meaningful contribution to the country’s development.

A large majority of Malawians (84%) expressed satisfaction with the quality of schools that their children attend describing them as either good or very good. This shows improvement from 2010 when only 68% of Malawians described the schools their children attend as being good or very good. The most important finding is that the level of parents’ satisfaction with the quality of education in public, mission and private schools is not significantly different. Thus taking into consideration that the majority of children attend government schools, it is important that the current standards be maintained or improved upon. And considering the high fees that are levied by private and mission schools government should work with these schools to ensure that the quality of education offered is commensurate with high fees that parents are paying.

Generally, the perception of households is that the education sector in Malawi, irrespective of whether it is private, mission or government, has improved when compared to the 2010 survey results. The main negative observation, however, which needs urgent attention, is that the percentage of those paying gratification to access services in the education sector has somewhat doubled from 7% in 2010 to about 13% in 2013. This calls for concerted efforts to stem off the tendencies for gratification before they can get systematized and entrenched in the sector.

Health Sector

While in 2010 there were more urban residents who reported having visited healthcare facilities compared to rural residents, the 2013 survey findings reveal almost no difference in usage of

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healthcare facilities by location. Instead, nearly as many urban residents (79%) as rural residents (78%) visited health care facilities. Just as in 2010, the 2013 survey results show that Malawians evaluate at least positively the quality of medical staff and health facilities across the board. And consistent with the 2010 survey findings, private and mission hospitals are evaluated more highly than government facilities. Despite some variations, a comparison of the 2010 and 2013 survey results show that Malawians in general are putting more confidence in the health sector in relation to the quality of medical staff and health facilities particularly in the private sector. More importantly gratification payment remains very low in the health sector.

Public Utilities

There are huge disparities between urban and rural areas with regard to access to public utilities, a trend that has been consistently maintained across the surveys. The 2013 survey shows that only 2% of rural households are connected to public electricity supply, 2% are connected to water supply and a meager 0.2% of Malawians have fixed phone lines. Despite the fact that there is a low number of households that are connected to fixed telephone lines, this does not necessarily imply that communication in this area is impeded as availability of mobile phone facilities have greatly lowered the need for fixed telephone lines.

Although the 2010 survey findings recorded a decline in the likelihood of households getting connected to public utilities using unofficial channels, the 2013 survey demonstrates that those gains have not been sustained. Instead, the proportion of households that have obtained these three public utilities through unofficial means has increased between 2010 and 2013. Overall, the reliability of public utilities in 2013 was considered worse than in 2010. Although the reliability of electricity services has remained the same between 2010 and 2013, less than three in 10 respondents considered the quality of the service to be reliable. For water and telephone services, the reliability of service in 2013 was rated worse than that recorded in 2013. The largest decline was in the reliability of water services, which fell further from 77% to 56% in 2013. Thus public satisfaction with the reliability of major public utilities has gone down across the board and this calls for serious and urgent action on the part of service providers to find ways of ensuring reliable service supply.

Unlike in 2010 when 95% of businesses indicated that they were connected to the public electricity grid, the proportion of businesses that report being connected had fallen to 58% in 2013. This declining rate of power connectivity might reflect stagnation on electricity generation, which is in turn making it difficult and impossible for the new firms to get hooked to the national power grid. The net effect of unavailable and unreliable power means that many firms are being forced to use generators to provide backup power. It is thus not surprising that as many as a quarter (24%) of firms report that they own a generator to provide backup power due to the unreliability of electricity supply from the national grid.

The 2013 survey results further show that nearly all citizens that have access to utilities such as electricity, water and telephones, use official channels to pay their bills. The main concern, however, is that as much as 10% of the respondents believe that they can get their electricity bills reduced through payment of gratification while 9% think that they can avoid payment of water bills by offering gratification. In fact, 23% of the respondents report to have paid gratification in return for electricity supply while a further 8% reported to have made gratification payments to secure water supply.

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Fighting Corruption

There is a strong feeling that the overall efficacy of the government’s anti-corruption strategy has dramatically declined. While in 2010 59% of the respondents said it was effective, only 35.5% indicated as such in 2013. This is a substantial decline especially when one considers that in the 2006 baseline survey as many as 75% of the respondents deemed the government’s anti-corruption strategy effective. The 2013 survey results clearly show that confidence in the government’s anti-corruption strategy has been substantially eroded over the years.

The institutions that were rated highly in combating corruption included the media (73.6%), churches/religious bodies (72.6%), Non-Governmental Organizations (61.1%), academics and teachers (60.9%), the Anti-Corruption Bureau (ACB) (50.5%), the Police (49.6%) and Office of the Ombudsman (48.5%). The media and the churches/religious organizations have more or less retained the levels of performance recorded in 2010 at 74% and 72% respectively. It is striking to note that the performance of the Anti-Corruption Bureau has dramatically gone down from 73% in 2010 to 50.5% in 2013 which raises serious concerns about the country’s prospects of winning the battle against corruption.

The main concern, however, of the 2013 survey findings is that they show that citizens are generally not fully aware of the processes of reporting corruption. The results show that only 17.6% of the citizens fully knew the processes of reporting corruption. In contrast, the survey of public officials revealed that as high as 73.1% of them knew the process of reporting corruption. These results could partly explain why fewer people among ordinary people reported corrupt acts which they observed taking place. This really calls for intensification of ACB’s efforts in awareness raising about the processes of reporting corrupt activities to the relevant authorities in order to increase the number of corrupt cases being reported and prosecuted.

Conclusions and Recommendations

The findings of the 2013 survey generally paint a rather gloomy picture about the country’s capacity and commitment to successfully fight corruption and create an enabling environment that ensures that those entrusted with the task of providing quality public resources and assets do so in a safe way, in a fair, honest and profession manner. The apparent gains that appeared to have been made in the fight against corruption as demonstrated by the 2010 survey results have not been sustained. The 2013 survey results actually show that the country has experienced regression almost on every other index that is tracked. The results generally point to corruption becoming more or less systematic and deeply entrenched in public life.

The findings further raise some serious concerns in relation to the country’s prospects for democracy deepening and attainment of inclusive and sustainable development. They, inter alia, show unequivocally for that matter that nepotism, cronyism, lack of transparency and accountability and greed are rife in the country’s public sector. The combined effect of these vices especially in a context where citizens express a great deal of cynicism in the efficacy of public sector institutions as the results of the 2013 survey demonstrate presents serious challenges to the sustenance of the good governance agenda.

Drawing on the findings of this survey, the following recommendations are made with the expectation that they will contribute to laying a solid foundation for sustainable and transformative anti-corruption efforts. The recommendations are divided into two broad categories, namely: general and specific in an attempt to provide a platform for possibly very well focused and innovative anti-corruption efforts. It is, however, quite important to note that most of the recommendations that were made in the previous surveys are still very relevant.

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There are even more relevant this time around given that the results show that country’s efforts to fight corruption have been substantially derailed. In other words, the corruption situation in the country has greatly deteriorated underlined by the proverbial “cashgate” scandal.

The set of recommendations below have been categorized into specific and general ones. The specific ones entail those that the ACB can implement on its own where as the general ones are dependent on the ACB enjoying the goodwill and cooperation of other stakeholders to successfully implement. This means that the fight against corruption should be understood as a collective national effort in which each relevant stakeholder is expected to play their role while the ACB takes the lead in driving the implementation of a gamut of anti-corruption strategies and interventions.

Specific Recommendations

Undertake a comprehensive political economy analysis of the implementation of the anti-corruption efforts which will be quite critical in terms of identifying barriers to and opportunities for implementation of anti-corruption strategies.

Review and strengthen the anti-corruption legislative framework because a robust legal and regulatory framework properly enforced guarantees legitimacy.

Promote corruption risk assessments interventions especially amongst those agencies that have been poorly rated in terms of performance, honesty and integrity which would greatly help to prevent corruption and establish mechanisms for early detection of misappropriation, fraud and major losses of essential resources.

Hasten the plans to streamline the scope of the survey to make it cost efficient and effective so that it can be carried out regularly to provide strategic guidance in the anti-corruption efforts.

Publicize the results of the governance and corruption surveys widely as a way of putting pressure on consistently corrupt agencies to change their ways of doing business.

Promote a culture of reporting corrupt activities by both citizens and public officials by widely publicizing the authorities or institutions to which they can be reported to as well as the procedures involved.

General Recommendations

Promote a citizenry that does not tolerate corruption through socialization and various forms of civic education programmes emphasizing on values of honesty, hard work and positive competition among many others.

Cultivate strong political will to fight corruption among political leadership at all levels of society such that leaders in all spheres should not condone corruption.

Make corruption very costly by making officials pay heavily for their acts of commission and omission.

Identify and respond to the major challenges in service delivery since poor service delivery is one of the key triggers of fraud and corruption.

Promote simplification of procedures such as setting clear guidelines for the transparent conduct of public affairs and eliminate red-tape and bureaucratic obstacles to innovation.

Ensure that supreme audit institutions are independent of the Executive and are properly resourced to carryout checks and balances that are critical to preventing fraud, corruption, cronyism and mismanagement.

Advocate for sustained and committed leadership that embodies the core values of good governance at every level of society because when leaders are committed to transparency,

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integrity and accountability and live by these standards they set the tone for the rest of their followers.

Advocate for transparent and accountable financial systems for they have tremendous potential to prevent corruption especially when backed up by anti-corruption programmes and rules that all employees understand and follow.

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Acknowledgements We would like to take this opportunity to thank the Anti-Corruption Bureau (ACB) for entrusting the Centre for Social Research (CSR) to carry out the Governance and Corruption survey for the second successive time. This survey would not have been possible without the support of people too numerous to mention. However, we owe a special debt of gratitude to the team of Research Assistants who traveled the lengths and breadths of the country to collect data from sampled households, businesses and public officials. They carried out this exercise with a great deal of dedication especially given the sensitivity of the subject matter following revelations of massive looting at Capital Hill dubbed “cashgate” at the time the fieldwork was being conducted. We cannot thank enough all the respondents across the three modules of the survey who sacrificed their time to respond to the questions often at very short notices. Last but not least we would like to sincerely acknowledge with thanks the support that Mr. I. Musopole of the ACB offered the team that ensured the smooth execution of the survey. Any errors of interpretation remain entirely our responsibility.

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1. Setting the Context

1.1 Introduction and Background Governance and corruption have become an integral part to the development discourse especially in the developing countries. In the words of Arkerman (1997), scholars and development practitioners have realised that “those worried about development failures common throughout the world must confront the problem of corruption and the weak and arbitrary state structures that feed it”. This is the case because corruption is associated with a host of evils that stand in the way of sustainable development of a society. More importantly, it is a symbol of deep institutional problems, indicating failure of transparency and accountability, which are essential characteristics of good governance. The meaning of corruption is heavily contested. According to Colombatto (2003), the term “generally identifies a transaction whereby an individual bound by a formal principal-agent contract takes advantage of his discretionary power in order to sell to a third party property rights that do not belong to him”. Shleifer and Vishny (1993) define corruption as “sale by government official of government property for private gain”. What underlies any conventional definition of corruption is “abuse of office for private gain” (Akcay, 2006). According to the World Bank (1997), corruption happens “when an official accepts, solicits, or extorts a bribe. It also happens when private agents actively offer bribes to circumvent public policies and processes for competitive advantage and profit. Public office can also be abused for private benefit even if no bribery occurs, through patronage and nepotism, theft of state assets, or diversion of state revenues”. Some scholars argue that corruption enhances efficiency by serving as ‘grease’ for business transactions (Nye, 1966; Huntington 1968; Friedrich 1972; Aidt, 2003; Meon and Weill, 2008). To the contrary, there is mammoth empirical evidence that corruption actually slows down the wheels of the economy. It has been widely acknowledged that corruption retards economic growth, reduces tax revenue, is associated with high child mortality rate, primary school students dropout rate, and poor roads condition, among others (Akcay 2006). For example, Vinod 1999 argues that a corrupt transaction worth US$1 imposes a burden of $1.67 on the economy. Many others find a negative relationship between the incidence of corruption and various positive development variables including foreign and domestic investment, GDP per capita, economic growth. Mo (2001) establishes that a 1 percent rise in the level of corruption leads to an approximately 0.7 percent fall in economic growth. In the same vein, others have demonstrated a positive relationship between corruption and negative factors of development. For example, Al-Marhub (2000) finds a positive relationship between corruption and inflation. Gupta et al (1998) find that corruption increases income inequality and poverty. Akcay (2006) tested the relationship between corruption and human development and concluded that corruption negatively affects human development. Morse (2006) finds a negative relationship between corruption and environmental sustainability. All these empirical accounts point to the futility of the development agenda if fighting corruption is neglected. The tentacles of corruption not only affect the economic development agenda but also the political wellbeing of a country by undermining legitimacy of the regime and institutions of the state. It is against this backdrop that international organisations and inter-governmental organisations are working hard to combat it. For example, the UN adopted the United Nation Convention against Corruption. In Africa, the AU initiated the African Union Convention on Prevention and

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Combating Corruption in 2003, which came into force in 2006. At regional level, there are such anti-corruption agreements as Anti-Bribery Convention of the Southern African Forum against Corruption (SAFAC). Other institutions such as the World Bank, Transparency International and World Justice Project have invested significantly in monitoring the state of corruption and other aspects of governance for comparison at international level. The United Economic Commission for Africa in conjunction with United Nations Development Programme also introduced the African Governance Report after realising that there can never be development on the continent without factoring the governance situation. Malawi has demonstrated her efforts to fight the evils of corruption through enactment of the Corrupt Practices Act in 1995, and establishing the Anti-Corruption Bureau by 1998. Malawi has ratified both the United Nations Convention against Corruption and the African Union Convention on Prevention and Combating Corruption in late 2007. The will to fight corruption in the country is further manifested by the launch of the National Anti-corruption strategy in 2008. However the war of corruption is far from being won. According to Transparency International Corruption Perception Index of 2012, Malawi ranks 88/176 scoring 37/100. This is only a marginal improvement on 2011 score of 3/10 although the rank has improved significantly from 100. The score was not very different in 2010, (3.4) when the country ranked 85th in the world. According to World Justice Project’s Rule of Law Index, Malawi scored 0.44 on ‘absence of corruption’ factor on a scale of 0 to 1. This is not too bad in comparative perspective since Malawi comes 7th among the 18 countries in the sub-Saharan African region. However, it shows there is a lot to be done to redeem the situation since the score is even below half. In spite of the various monitoring mechanisms employed by these international organisations, there is need to have domesticated and highly contextualised ways of monitoring and evaluation. Not only does it affect acceptability and ownership of the resultant initiatives, but it also reflects the fact that corruption is rooted in a country’s social and cultural history, political and economic development, bureaucratic traditions and policies (Akcay, 2006). Countries are different in terms of these variables. This calls for approaches and tools that are deemed appropriate and relevant to the immediate context. It is against this backdrop that Anti-Corruption Bureau (ACB) with support from various development partners introduced the Governance and Corruption Survey in 2006 to monitor and track the trends of corruption in the country. This survey is carried out every five years and helps the ACB to refocus, refine and rediscover altogether its anti-corruption strategies on the basis of the results. The surveys have therefore been very important in informing the country’s overall strategy in curbing and combating corruption although there is a general feeling that the surveys are not frequent enough to systematically guide the ACB’s efforts since corruption and its impacts on a country’s governance situation are highly dynamic. This report presents results of the third Governance and Corruption Survey which was carried out in the last quarter of 2013. While the second one was carried out in 2010 the third one was not due until 2014. However, as an integral part of the response to the widespread concern that the intervals at which the surveys are held are quite long, the ACB decided to hold the third survey earlier while working on transitional modalities that would ensure that the survey is held regularly and preferably every two years. These transitional modalities will, among things, involve systematically isolating the key corruption issues that should be subjected to regular monitoring and would indeed pay the envisaged dividends in the fight against corruption in a streamlined survey that would be cost efficient through a comprehensive qualitative assessment

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whose goal will be to fully grasp the underlying dynamics of corruption in the domestic context while, of course, not losing sight of the international norms, standards, and practices. In its current form, the survey constitutes three modules, namely: 1) household survey; 2) public officials’ survey; and 3) business enterprise survey. These modules will be maintained but they will be substantially streamlined to make the survey cost efficient and cost effective so that it could indeed be held on a regular basis.

1.2 Organization of the Report The report is divided into seven chapters. Following this introduction, chapter 2 presents the methodological framework that was employed to carry out the survey with focus on the adjustments that were made in the sample sizes as a first step in the efforts to streamline the Governance and Corruption Survey so that it is cost efficient. The third chapter presents results about the perceptions and experiences of governance and corruption by households and businesses. The focus is principally on performance assessment of selected public institutions in the delivery of services as well as stakeholders’ perceptions of their honesty and integrity. It also examines the relationship between corruption and development as well as how various stakeholders understand corruption. Chapter 4 zeroes in on the prevalence and trends of corruption with particular focus on the seriousness and frequency of corruption from the perspective of households, businesses and public officials. It also attempts to put in perspective the cost of corruption including highlighting the major sources of corruption in the country. In chapter 5, the focus is on the status of governance and incidence of corruption in the key sectors of the economy. Sectors that are particularly singled out include the business sector with particular emphasis on anti-corruption legislation and regulations; the judiciary sector; the education sector; the health sector; and public utility sector. In all these sectors, the main areas of focus are on access, efficiency and effectiveness of the services provided. Chapter 6 assesses the country’s concerted efforts in the fight against corruption paying particular attention to the political will to do so; the leading institutions in the fight against corruption; and the public’s zeal and eagerness to report acts to the relevant authorities especially the ACB. The final seventh chapter offers concluding reflections and suggests recommendations about how the fight against corruption in the country can effectively be advanced forward with positive and sustainable outcomes in as far as national development efforts are concerned.

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2. Methodology and Sample Design The discussion to streamline the scope of the Governance and Corruption survey was ignited by the enormous cost outlays required to execute it on the basis of samples that were used in the first two surveys. These concerns made it imperative to explore whether the sample sizes could be streamlined without really compromising the integrity of the overall outcomes. This discussion eventually led to the reduction of the household sample from 1,500 to 1,200; the business enterprises from 500 to 300; and the public officials’ survey from 1011 to 337. The justifications for these reductions in sample sizes are explained in the rest of this chapter.

2.1 The Household Survey Sample Size

The sample size was reduced from 1,500 to 1,200 as strategy to cut costs. This was justifiable because the results would not be significantly affected at all in terms of their statistical significance. While a sample size of 1,500 would yield a margin of error of +/-2.6% at the 95% confidence interval, a sample of 1,200 provided almost similar margin of error of +/-3% at the same 95% confidence interval.

In the household survey, one respondent primarily the household head or any other member of the household older than 18 years, was interviewed. Since we were only taking a single member per household, the number of respondents interviewed was equal the number of households. This therefore made sense to adopt a household approach in sampling respondents for the survey.

Utilizing the fact that information collected in the household survey is likely to be expressed as the proportion of households sharing a particular view about corruption or governance and that such views will be many, the formula for the calculation of sample size for a proportion as given by Bradley (1981) was used to work out the expected precision of our results after they were analyzed. To achieve this, our results were assumed to have proportion of households sharing a given view of 50% in order to capture the highest variance given the following conditions: A design effect equal to 4, and a national sample size of 1,200. With these assumptions, the level of precision of our results at the national level was calculated to be plus or minus 5% with 95% confidence.

Before the sample was drawn, all the regions in the country were treated as a stratum. In addition, the country’s four cities were treated as an urban stratum. This sampling scheme considered all Bomas and Towns as belonging to the rural stratum. This implied that each region represented a rural stratum and all cities covered in the regions represented the urban stratum in the sample. Consequently the sample was drawn in two stages. The first stage involved the selection of enumeration areas whilst the second stage involved the selection of households within each selected enumeration area.

A number of enumeration areas were allocated to each stratum in proportion to the population of households each stratum had. This implied that strata with large populations had a relatively larger number of enumeration areas allocated to them. Eight households were interviewed in each enumeration area. It was decided to reduce the number of households selected per enumeration area in order to maximize the number of enumeration areas since the expectation is that there is a much larger variability of the indicators between enumeration areas than it is within enumeration areas. This gave a total of 150 enumeration areas spread proportionately within each one of the strata.

2.2 The Sampling Frame

The sampling frame for the first stage units comprised a list of enumeration areas in each of the four strata that comprise the country. These are areas that were demarcated following physical

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features such as roads/paths, rivers/streams, galleys etc. They were demarcated in such a way that, during the Census, a Research Assistant would interview all the households in the area within a period of 21 days. Each area is estimated to contain an average of 300 households.

The enumeration areas used were those that were demarcated in preparation for the most recent Population and Housing Census that was conducted by the National Statistical Office (NSO) in the year 2008. Each of the four strata contained a list of these enumeration areas together with each enumeration area’s household population. The implicit stratification of enumeration areas by Traditional Authority and the districts in our rural strata and by Wards in the cities as provided by the NSO was not be disturbed so as to maintain the geographical arrangement of the enumeration areas. There were therefore a total of 4 frames, one covering each of the three regions and one stratum for the 4 cities. Maps showing non-overlapping enumeration areas in Traditional Authorities in the rural strata and Wards in the urban strata were obtained from the NSO to guide the field teams in the implementation of the survey.

2.3 Sampling Procedures

The first stage involved the selection of Enumeration Areas (EAs) to represent each rural stratum and the urban stratum. These EAs were selected within each stratum with Probability Proportional to Size where the measure of size was the household population of each of the EAs within the stratum. Before selection, the EAs were listed within each rural and the urban stratum by Traditional Authority (TA)/Ward. As discussed before, this implicit stratification of EAs by TA/Ward within each stratum as arranged in the Census was not disturbed so as to maintain the geographical arrangement of the enumeration areas. The selection of enumeration areas was done in the office at CSR.

The second and final stage involved a systematic sampling of eight households in each of the selected enumeration areas. Malawi, just like many other developing countries, does not have a frame of households from which a sample can be drawn. In order to build up such a frame, a household listing exercise has normally been done. Household listing can be time consuming and costly especially in surveys as large as this one. To avoid incurring such costs and taking advantage of the knowledge of the total number of households in selected enumeration areas and the required sample size, a systematic sample was drawn on the ground by field personnel without bothering about listing. This was done on the basis of a well considered assumption that the total number of households in respective enumeration areas has not changed that significantly since the last population census was conducted in 2008

To accomplish this, an enumeration team utilizing a map, traveled to the selected EA and got acquainted with the boundaries as given on the map. This helped to avoid collection of data from any areas outside it or leave some parts of it uncovered. After having acquainted themselves with the boundaries, the team then assembled at the middle of the EA where the supervisor spanned a bottle for each of his team members. This was done to determine the direction in which each enumerator would move in the selection and getting information from the sample households. The first household which the enumerator encountered when moving in the direction dictated by the Supervisor through the spinning of the bottle was the first household to be interviewed. After that, the Research Assistant collected data from every 5th household from the one he/she interviewed earlier until he/she finished collecting the data from all households allocated to him/her.

2.4 The Enterprise Survey

As already indicated, the number of respondents for the business enterprise survey was reduced from 500 to 300. The statistical analysis showed that interviewing 300 businesses out of the given total population of business enterprises in the country would not undermine the

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integrity of the results. They would thus be generalizable. In this module, 300 directors/managers of businesses were interviewed using a questionnaire designed by the World Bank but adapted to local conditions.

The sampling frame for the enterprises was obtained from the National Statistical Office (NSO). The NSO uses the International Standard Industrial Classification, (ISIC) which classifies industries into 9 groups. These groups are namely: Agriculture; Construction; Transport; Mining; Manufacturing; Wholesale and Retail; Electricity and Water; Forestry; and Services. These enterprises were listed by type of activity in each of the 4 strata and within each stratum and sorted by labour force. Those enterprises with a labour force of less than 10 were removed from the frame. Two enterprises in each of the nine activity categories were systematically selected in each of the four strata after arranging the enterprises in increasing order of size on the basis of the size of the labour force.

2.5 Public Officials’ Survey

Similarly the number of respondents in the public official survey was reduced from 1,011 to 337 on the basis of rigorous statistical computations. Given the size of the public sector in the country, interviewing 337 officials would yield results that would be generalized to the total population of the country’s entire public sector

The Public Officials survey sought information from the following categories:

Members of Parliament

The Executive (Ministers)

Civil Servants

Representatives of the Judiciary

Malawi Revenue Authority

District, Town and City Assemblies

District Development Committees

Representatives of Parastatal Organizations

Where appropriate, the personnel in each of the above categories were divided into policy makers, program managers and support staff. There are about 43 employees that constitute the Executive (Ministers including the President). The proposal was to interview 5 of them at random but this was not possible because of their non-availability during the survey period even after extending it for about two weeks. Ten MPs were interviewed out of the 193 in the national legislature and 11 employees from the Malawi Revenue Authority (MRA) were also interviewed.

The mainstream civil service required drawing a sample in a detailed and careful manner. This sample was drawn on the basis of the estimate that there are about 135,000 civil servants in Malawi that belong to about 43 ministries and government departments. In drawing the sample, the frame of employees by status category was obtained from the respective Ministries in this stratum at the time the field team visited them. At least 3 employees from each of the 43 ministries were randomly selected and interviewed depending on their availability. A significant proportion of civil servants work in Lilongwe City which falls in the designed urban stratum and as such the decision was that only civil servants falling in the urban stratum were interviewed. This gave a total of 129 civil servants that were interviewed in Lilongwe. Table 1 below provides a summary of public officials that were interviewed at the national level.

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Table 1: Selection Criteria for National Level Public Officials

Category Total

Executive -

Members of Parliament 10

Malawi Revenue Authority 11

Civil Servants 129

TOTAL 150

A total of 182 public officials were interviewed at the district level except in Likoma. The decision to exclude Likoma was based on logistical considerations. It is difficult to send field teams to Likoma because it requires somewhat complicated transport logistical arrangements. It is, however, important to note that the respondents that were interviewed for the public officials’ survey were mostly clustered in urban as well as Boma headquarters of the selected district rural stratum. The distribution of officials interviewed at regional level is given in Table 2 below.

Table 2: Respondents for the Public Officials’ Survey

Category

Region

North Centre South Total

District Development Committee 10 18 26 54

District, Town, City Assemblies 12 22 32 66

Representatives of the Judiciary 6 10 15 31

Representatives of Parastatal organizations4

6 10 15 31

Total 34 60 88 182

2.6 Field Personnel

For the execution of this study, the Centre for Social Research recruited from its pool of experienced Research Assistants 42 temporary personnel. Thirty five of these possessed the Malawi School Certificate of Education whilst the other 7 were University graduates. These were divided into 7 mobile teams each comprising 5 Research Assistants and 1 Supervisor. These were responsible for the collection of the information from Households, Enterprises and Public Officials. One of the teams was responsible for the collection of data in the Northern Region, 3 teams were assigned to the Southern Region while the other 3 teams were assigned to the Central Region. Collection of all the data lasted 35 work days for all the three modules of the survey. The field

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teams were regularly supervised by the Principal Investigators on the survey: namely Dr. B. Chinsinga, Dr. B. Dulani, Dr. Mvula, and Mr. J. Chunga.

2.7 Data Entry, Editing and Analysis

Data entry started as soon as the fieldwork was finished. It was done by a team of six data entry clerks using a CSPro 3.3 data entry package which involved the development of three separate data entry templates for each module of the survey. The data entry exercise was preceded by data editing which mainly involved checking and correcting the identification parts of several questionnaires whose identification was not clear. The data from the three modules was captured into the CSPro prgrammes and was later converted to the Statistical Package for Social Scientists (SPSS).

A preliminary statistical analysis was carried out using Version16 of SPSS. This involved mainly frequency tabulations and cross tabulations whose main purpose was to detect if there were any mistakes that were overlooked during the data editing stage. This ensured that the integrity of the data was not comprised at all. The final stage of data analysis entailed the production of graphs and tables modeled on the structure and format of the previous reports of the survey. This was done to allow for the comparison of the results over time but particularly with the results of the 2010 survey.

2.8 Problems and Challenges

There were not many problems and challenges associated with the preparation and conduct of the survey especially since the CSR was doing it for the second successive time. However, the main challenge as intimated above related to the reluctance of the respondents to participate in the survey especially those from the public sector. Survey teams had to make several visits and requests before they could be granted the opportunity for interviews. The team that was assigned to conduct these interviews could not complete the exercise during the stipulated period. Their time in the field had to be extended by two weeks but despite the extension they were not able to interview any Minister.

This could be attributed to the fact that the survey was carried out almost immediately after the news about the “cashgate scandal” at Capital Hill had just broken out. Most public officials therefore felt that the survey was a witch hunting instrument to trap those who were involved in the proverbial pilferage of public resources. However, regardless of this particular challenge, the survey teams managed to complete the interview quotas that were set for the public sector officials except for the Ministers.

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3. Perceptions and Experiences of Governance and Corruption

3.1 Users Views of Public Agencies’ Performance

The main focus of the assessment was on the extent to which the selected public agencies’ are efficient and deliver quality public services motivated by fact that these are critical integral components of the good governance agenda with tremendous potential to either help to curb corruption or actually worsen it. Both households and businesses were therefore asked to rate the performance of the selected public institutions in terms of their perceived efficiency in service delivery as well as the quality of the services provided. This was done using a scale of 1(very poor) to 4 (very good). The results are presented in Figures 1 and 2 below.

Figure 1: Citizen’s Evaluation of the Performance of Public Institutions

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Figure 2: Private Sector’s Evaluation of Public Institutions Performance

In the 1 to 4 rating scale, the rating of 3.0 denotes somewhat good performance whereas the rating of 2.5 is deemed neutral. This implies that a public agency is neither doing a poor nor good job while any rating below 2.5 implies poor performance. Consequently any rating of above the 2.5 threshold denotes an overall positive rating of an agency’s performance.

The 2013 results show that the efficiency levels and quality of services offered by public agencies have substantially deteriorated both from the perception of households and businesses although the assessment is particularly negative on the part of the latter. It is thus quite striking that none of the agencies received a rating of 3 from both households and businesses. In 2010, at least 4 agencies received a rating of 3 from households. The situation did not change for businesses in 2013. None of the agencies received a rating of 3 from businesses in 2010 as well. The main concern, however, is that in both cases the number of public agencies receiving the rating of either 2.5 or above has substantially declined from 16 in 2010 to 12 in 2013 and from 20 in 2010 to 3 in 2013 for households and businesses respectively.

The results show that there have been some changes both on the part of households and businesses in as far as the least and top performing agencies between 2010 and 2013 although some institutions have remained in the least performing category during this period.

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For households, the top performing institutions include Malawi Postal Corporation, Malawi Telecommunications Limited (MTL), Local Development Fund (LDF), Malawi Electoral Commission (MEC) and Malawi Broadcasting Corporation (MBC). Four institutions, namely: Malawi Postal Corporation, MTL, MEC and MBC have remained in the top five performing category of public institutions while LDF is the only new entrant. MANEB and Telephone Providers have exited this category. The lineup of the five least performing public institutions has also seen some notable changes. While Traffic Police and the Administrator General remain amongst the least performing public institutions during this period, the new entrants include ADMARC, Accountant General and Public Education Services replacing Immigration Department, Ministry of Agriculture and Youth Enterprise Development Fund (YEDEF) from the 2010 lineup.

The lineup of the top performing public agencies from the perception of businesses also changed with only the Malawi Bureau of Standards remaining in this category between 2010 and 2013. The new entrants to this elite list include Telephone Providers, Registrar General, Malawi Competition and Fair Trade Commission and National Roads Authority. There have also been some changes in the lineup of least performing public institutions. ESCOM, Immigration Department and Administrator General no longer make the shortlist of least performing public institutions from the perspective of businesses. These have been replaced by ADMARC, Accountant General and Office of the Director of Public Procurement (ODPP). What is, however, striking is that the Accountant General has slumped from being one of the top performing public institutions in 2010 to one of the least performing institutions in 2013. While it did not feature at all in the lineup of the least performing public institutions for households in 2010, the Accountant General features in the 2013 shortlist.

Overall, the results of the assessment raise serious concerns about the performance of public institutions in the country. The results show that the efficiency levels and the general quality of public services have dramatically declined between 2010 and 2013. As noted earlier, none of the public institutions has been rated at 3 by both households and businesses while the number of institutions registering the rating of 2.5 has equally plummeted. This means that even though most institutions have not made it onto the shortlist of least performing institutions, their performance still leaves a lot to be desired. They are unable to meet the basic minimum standards of performance. These results therefore imply that that there is urgent need for interventions that would progressively ratchet the capacity of public institutions to provide quality services and to do so both efficiently and effectively. This would be quite imperative in order to sustain the trust of citizens in democratic governance as the vehicle for sustainable and transformative development.

3.2 Honesty and Integrity of Public Institutions

The assessment of honesty and integrity of public institutions was motivated mainly by the conviction that good governance is not sustained only by good intentions alone but also lasting incentives and strong institutions. This is to say that good governance requires an integrated long-term strategy built upon cooperation between government and citizens. The honesty and integrity of public agencies or officials is actually quite critical in creating an environment that serves the cause of good governance and national level development.

The public sector is very critical in the overall scheme of national development since it is mandated to manage the public good, present and future, and to provide essential services and infrastructure. Citizens have therefore a right to expect that the public sector carries its duties mindful of those it is working for. In more practical terms, honesty and integrity means providing quality services and prudent management of financial resources and assets. They simply entail

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service delivery by public agencies in a safe way, in a fair, honest and professional manner. The virtues of honesty and integrity are thus bedrocks for accountability.

The results of households’ and businesses’ rating of public agencies in terms of honesty and integrity are presented in Figures 3 and 4 respectively.

Figure 3: Citizens’ Assessment of Integrity and Honesty of Public Institutions

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Figure 4: Businesses’ Assessment of Integrity and Honesty of Public Institutions

There have been some notable changes in the ratings of the levels of honesty of public institutions by households between 2010 and 2013. Only two out of the five top performing institutions were retained from 2010 in the 2013 shortlist. These are Churches/Religious Bodies and Public News Media. The new entrants to the top five include Ministry of Agriculture and Food security, Press Trust and Ministry of Gender. Only Political Parties and Police excluding Traffic remain in the shortlist of least honest institutions according to the 2013 survey results. The new entrants include Ministry of Finance and Office of the President and Cabinet (OPC).

For businesses, the highly rated public institutions in terms of honesty include Malawi Postal Services, Ministry of Gender, Telephone Providers, Courts and Building Department. Only Malawi Postal Services survive from the 2010 shortlist. With regard to the least honest public institutions, businesses rated as such Political Parties, Members of Parliament, Traffic Police, Cabinet Office and Ministry of Finance in 2013. The new entrants to the 2010 shortlist are only Cabinet Office and Ministry of Finance.

The most striking overlap between households and businesses is the classification of both OPC and Ministry of Finance amongst least honest public institutions. In fact, businesses classified the Ministry of Finance as one of the top five honest public institutions in the 2010 survey. It

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could actually be argued that the unfavourable ratings of these institutions reflect their perceived role in the infamous cashgate scandal in which billions of kwachas have been lost through grandiose corruption if not outright theft by public servants.

While the results of the survey in 2010 represented an improvement in how both and households rated the honesty of public institutions from 2006, the results of the 2013 survey show sharp deterioration in the overall integrity of public institutions. As many as 16 public institutions were either rated 3 or above and up to 31 crossed the 2.5 threshold for households in 2010. In 2013, only 2 were rated 3 or above while only 22 crossed the 2.5 threshold. The story is almost similar for businesses. While in 2010 businesses rated 8 public institutions either 3 or above and 40 above the 2.5 threshold only 2 were rated either 3 or above and only 20 above the 2.5 threshold in 2013.

These results are a cause of concern in as far as the fight against corruption is concerned. The promising positive trend demonstrated in the 2010 survey results has not been sustained. This means that public institutions have not been able to inspire adequate confidence in citizens and businesses yet it is very critical for good governance and management of public affairs for sustainable national development.

3.3 Institutional Performance and Integrity

Just like in the previous surveys, there is direct correlation between the levels of performance and perceived integrity of public institutions. Thus the higher levels of integrity correspond with higher levels of performance of public institutions. Figure 5 below depicts the relationship between institutional performance and integrity.

Figure 5: Relationship between Integrity and Performance

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The fact that the performance of a public institution improves as its integrity is evaluated positively suggests that concerted efforts must be taken to progressively improve the integrity of public institutions. This is key to improved public service delivery, entrenching rule of law and creation of an enabling environment for the private sector. This calls for building systemic integrity so that both politicians and public sector employees should be held accountable individually and collectively for fulfilling government’s responsibilities and commitments.

The case of ESCOM deserves particular mention. In the 2006 and 2010 surveys, ESCOM consistently came out as the least performing public institution with the least integrity. Although there is still some concern with the performance of ESCOM it has at least managed to pull itself out of the bottom five institutions in as far as performance and integrity are concerned. Nevertheless, the experiences of ESCOM show that it is possible for public agencies to turnaround their image if they are specially committed. This is achievable as long as the public institutions could focus on generating sustainable development results by meeting the needs of the public and other clients.

3.4 Corruption and Development

The impact of corruption on a country’s development efforts need not be overemphasized. Corruption, in whatever form, has strong potential to squander the wealth of a nation and impoverish its people. This is the case because corruption reduces investment and economic growth, promotes inferior public infrastructure; reduces tax revenues; leads to poor maintenance of public infrastructure; reduced foreign direct investment; and high prices to consumers. In other words, corruption undermines a country’s attempts to fight poverty and inequality in the interest of sustainable development.

3.4.1 Views of Households

Malawians identified corruption as one of the major factors that undermine the country’s concerted development efforts alongside other factors as presented in Figure 6 below.

Figure 6: Key Constraints to Development Recognized by Malawians

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Unlike in the 2010 survey in which corruption was distinguished as the third major factor undermining the country’s concerted development efforts (79%), the 2013 survey results pushes corruption to second at 89.1%. This clearly shows that the incidence and effects of corruption on development has been worsening. In the 2006 survey, corruption was the fourth most important constraint at 59%. This is a cause of concern in the fight against corruption as well as in the development endeavours of the country.

The argument is that a corrupt society cannot be guaranteed leaps and bounds of sustainable economic growth and development. The other important factors include high prices of food at 98.6% which replaces unemployment at 91.1% as the most important factor affecting development efforts in the 2010 survey; unemployment at 86.5%; food availability at 81.1%; low quality of education at 78.4%; and low quality health care at 74.3%.

The high prices of food can be attributed to the rapid increase in inflation levels following the heavy devaluation of the local currency in April 2012. The kwacha had for a very long period of time been held at an artificial value which greatly contributed to the worsening economic conditions that made the massive devaluation imperative to facilitate some measure of economic recovery.

Just as in the 2010 survey, there is a striking similarity in terms of the factors identified as a hindrance to national development both in urban and rural areas. The first top five factors identified are essentially the same and in the exact same order. These include high prices of food, corruption, unemployment, food availability and low quality of education. For the country to experience sustainable development, these constraints must be addressed. Fighting corruption would be quite an important first step since it is a major hindrance to sustainable economic growth and development with disproportionate impact on poor communities and is corrosive on the very fabric of society.

3.4.2 Views of Businesses

According to the 2013 survey results, the top five factors that businesses perceive as constraining their operations have not changed. They include inflation, financing, corruption in the public sector, exchange rate and crime/theft/disorder. However, there are some noticeable changes in the order of importance and the magnitude of their rating as presented in Figure 7 below.

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Figure 7: Businesses’ Views on Constraints to Operation and Growth

While in the 2010 survey the most serious constraint that businesses were facing was financing (41.8%), this has been replaced by inflation at 78.7%. And while financing as a leading constraint was rated at 41.8% in 2010, it was rated at 70.2% in 2013 as the second most important constraint. Inflation has moved from being the fifth most important factor at 30.9% in 2010 to the most important factor in 2013 at 78.7%. This, inter alia, reflects the massive economic meltdown that country experienced following rampant economic mismanagement by the DPP government. The efforts to engineer economic recovery through the liberalization of foreign exchange management contributed to precipitating runaway inflation that has had negative impact on both the livelihoods of particularly poor Malawians and on the business operations.

The main concern, however, is that although public sector corruption is no longer the second most important factor constraining the operations and growth of businesses, the reported levels shows that the problem is worsening instead of getting better. In the 2006 survey, corruption was the seventh obstacle affecting businesses’ operations and growth at 23%, rising to 39% in 2010 and peaking to 62.9% in 2013. The magnitude of corruption as an obstacle to the operations and growth of businesses is even greater when the incidence of private sector corruption is taken into account. In the 2013 survey, the incidence of private sector corruption was estimated at 43.4% compared to 28.2% in 2010.

There is thus a perception that the incidence of corruption is worsening both in public and private sectors. This is not a favourable development because the image of worsening levels of corruption in the private sector erodes corporate identity, undermines confidence between business partners and can destroy the reputation of once trusted companies. Overall, the 2013 survey results paint a picture of limited impact of the concerted anti-corruption efforts in the country.

3.5 Understanding Corruption

The negative impact of corruption is widely recognized. The main negative impact of corruption is that it is a serious barrier to development and diverts resources away from poverty eradication

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efforts and sustainable development. This is an issue of great concern especially since the existing evidence suggests that corruption harms poor people more than others, stifles economic growth and diverts resources desperately needed for education, health care and other public services.

It is against this backdrop that the survey was interested in assessing the perception of the impact of corruption from both the perspectives of households and public officials. Recognizing that corruption affects households and public officials differently, the focus of the assessment was slightly different between them. The respondents in the household survey were asked whether corruption had a very significant, significant impact or no impact on their household wellbeing while public officials were asked whether corrupt acts have a very significant impact, minor impact, or no impact on the economy. The assessment in both surveys was based on the following list of corrupt acts:

Sale of parliamentary votes on laws to private interests.

Sale of decisions of courts in criminal cases.

Bribes to public officials to avoid taxes and regulations.

Public officials hiring their friends and relatives into official positions.

Contributions by private interests to political parties and elections campaign.

3.5.1 Views of Citizens

Just like in the 2010 survey, Malawians recognize and feel the impact of corruption on their livelihoods. Similarly, all corrupt acts were deemed to have significant effects on their livelihoods as shown in Figure 8 below.

Figure 8: Impact of Corrupt Acts on Household Wellbeing

Nepotism just like in the 2010 survey remains the most devastating corrupt act on the welfare of households, rising from 77% in 2010 to 80% in 2013. The least devastating corrupt act is the

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sale of parliamentary votes at 60% replacing contributions to political parties at 55% in 2010. The perceived level of the impact of the rest corrupt acts has increased between 2010 and 2013. This generally means that the corruption situation in the country has been worsening since the last survey was conducted in 2010. As noted earlier, the main concern is that public institutions and offices may lose their legitimacy when they misuse their power for private interest. Negative consequences for such a trend include reduction of interest in political participation, political instability, reduction in political competition, reduction in transparency of political decision making, distortion of political development and sustenance of political activity based on patronage, clientelism and money.

3.5.2 Views of Public Officials

The trend established in 2010 repeated itself in the 2013 survey. Public officials continue to establish a close relationship between various corrupt acts and the overall health of the economy. The results of the public officials’ assessment are presented in Figure 9 below.

Figure 9: Impact of Corrupt Acts on the Economy

There have been changes in the order of the corrupt acts’ perceived impact on the overall health of the economy except for the first two acts and the last one. Just like in the 2010 survey, bribes to avoid taxes and nepotism remain the most devastating impacts on the overall health of the economy. It is a vote of confidence in the country’s judicial system that the sale of arbitration court decisions remains the least devastating corrupt act on the health of the economy. Overall, however, it is important to note that there are no significant differences in the trends as evaluated by the public officials although there is generally an upward trend in the perceived magnitude of the impact of each corrupt act on the overall health of the economy. This is generally in tune with the findings of the 2013 survey that the corruption situation in the country has been progressively worsening since 2010.

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4. The Prevalence and Trends of Corruption

4.1 Seriousness and Frequency of Corruption

The proportion of Malawians holding the perception that corruption is serious and frequent has significantly increased since the last survey in 2010. As high as 96 % of ordinary citizens are of the view that corruption is a serious problem in Malawi. In 2010, 83% Malawians held this perception. Similarly, there is a huge rise in the number of people who feel that the problem of corruption has worsened. While in 2010, 52% Malawians felt the problem had worsened compared to preceding ten years, 92% hold that corruption had worsened in their comparison to ten years ago. Like ordinary citizens a higher percentage of businesses believe corruption is very common in their transactions. Up to 43% of businesses in 2013 said it is common to pay some gratification in order to get things done, which is a considerable rise from 27% in 2010. Businesses that have made sales to the public sector over the past two years are more likely to pay gratification in order to get things done than those who have not. This was also observed in 2010. However, the percent of such businesses has increased. In 2010, 33% of businesses that had done business with government indicated that it was common for them to pay gratification. This proportion increased 58% of business in 2013. In comparison, only 38% of businesses that had not done business with government in the preceding two years indicated that paying gratification is common. There is a huge turnaround in the perception of public officials on the status of current prevalence compared to prevalence of corruption over ten years preceding the survey. Up to 78% public officials believed that corruption in government was prevalent in 2010 ten years before compared to only 27% in 2010. In 2013, 82% of the public officials hold that corruption in government is prevalent now compared to 48% ten years ago. Regarding corruption in their respective organizations, only 12% of the officials indicated that corruption is prevalent in their organizations. Comparing with three years ago, the same percentage (12%) indicated that corruption was prevalent in their organization. In 2010, 7% of the public officials indicated that corruption was prevalent in their organization then, while 15% said it was prevalent three year before the survey. Thus, there is slight decline in perception on prevalence three years before each survey from 15% in 2010 to 12% in 2013; but a small increase on perception of prevalence at the time of each survey from 7% in 2010 to 12% in 2013.

4.1.1 View of Citizens

Generally, Malawians believe that the country is facing a serious and growing problem of corruption. Figure 10 below summaries citizens’ views of the seriousness of the problem of corruption now and compared to ten years ago. It shows that majority of Malawians, (96%) consider corruption to be a very serious or somewhat serious problem. Of these, 88% hold that it is actually a very serious problem. This is a sharp leap from 58% and 26% who rated corruption to be very serious and somewhat serious respectively. The seriousness of corruption in the country, according to citizens, is further underlined by the high perception that the problem has actually gotten worse. Up to 92% of Malawians feel that the state of corruption is worse than it was ten years ago. This is a combination of 74% who said the situation is much worse and 18% who indicated that it is worse. This is a clearly significant increase from 2010 where only 50% Malawians believed corruption was worse compared to ten years before that. Also notable in this regard is the fall in the percentage of

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citizens who believe things have changed for the better. In 2010, 46% of Malawians said the situation had gotten better. This has plunged to 6% in 2013.

Figure 10: Views of Citizens on Seriousness of Corruption

When asked as to who was behind the problem, most Malawians pointed at public officials as the main culprit. Choosing among public officials and other actors: namely, citizens, businesses, and politicians: 62% of Malawians believe that public officials are the leading perpetrators of corruption in the country. They were also ranked first, with 54% in 2010. Politicians and businesses are at 14% each while ordinary citizens are mentioned by 6% of the citizens. In view of the unequivocal message that corruption is serious and has gotten worse, one would expect that citizens think cases of corruption are the order of the day. However, when asked whether it is common for citizens to always, frequently, sometimes or never pay gratification to public officials to get things done, 25% said always, 32% said frequently, 27% sometimes while 11% thought it never happens. This may suggest that the kind of corruption that the citizens contend is a serious problem involves public officials and other actors like businesses not ordinary citizens. Additionally, although only 25% said always, it is also clear that on the whole, a large proportion of citizens at 84% think corruption happen with varying frequencies while 11% only says it never does. Compared to 2010, the proportion of those who believe that citizens always need to pay gratification to public officials has increased from 20%; that who hold that this happens frequently has increased from 24% while that which said sometimes and never have fallen from 39% and 13% respectively. Thus, the general direction is that the frequency of cases of corruption has increased but it is not regarded as something that happens always when citizens interact with public officials.

4.1.2 Views of Businesses

In the survey, businesses were, among others, asked their view on the prevalence of corruption as well as the extent to which corruption is an obstacle to their work. The business were equally split between those who indicated that it is common for firms in their respective line of business

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to pay gratification to get things done and those who said it is rare. They were both tied at 43%. What is important is the fact that this represents a rise from 27% of those who are saying it is common and a corresponding fall from 53% for those who said it is rare in 2010. This observation suggests that businesses are getting more entangled in corruption especially considering that up to 64% of businesses said it is rare for them to pay gratification in 2006. In respect of involvement in paying gratification, the findings show that this is not an urban phenomenon. As it was observed in 2010 there is no major difference between firms located in rural and urban areas. About 44% of urban business said it is common while 38% of the rural shared that view. The major difference is between businesses that make sales to government and those that do not. Up to 58% of firms that had conducted business with government in the past two years indicated that it is common for them to pay gratification. This is in contrast with 38% for those which did not. In 2010 the pattern was similar except that the proportion of those who had made sales to government and said it is common has risen from 33% to 58% now. This further suggests an increase in business - public official corruption. In order to assess the severity of corruption as a problem to businesses, the firms were asked to indicate the importance of key possible obstacles to doing business with the government in Malawi, namely delayed payment, too much competition, complexity of processes and requirement of gratification. On the scale of not an obstacle, minor, moderate and major obstacle, the businesses rated these elements as shown in Figure 11 below.

Figure 11: Severity of Obstacles when Conducting Business with Government

Like in 2010, ‘delayed payments’ is the most widely acknowledged problem with 7 out of every 10 businesses saying it is a major problem. This has risen from 5 in every 10 firms observed in 2010. Too much competition is also rated as a major factor by many businesses and almost similar to requirement of gratification. While requirement for gratification still trails delays in payment and too much competition, the percentage of businesses citing it as a major obstacle has doubled. It is 53% in 2013 from 25% in 2010. This echoes earlier findings that there is a

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growing perception among business and ordinary citizens that the problem of corruption has become more serious and prevalent.

4.1.3 Views of Public Officials

The survey also sought to find out views of public officials on various questions concerning corruption. On the question of prevalence of corruption in government generally, 82% of public officials believe that it is prevalent. In 2010, only less than a third of this (27%) held that corruption was prevalent. Asked about their opinion of prevalence ten years ago, 48% indicated it was prevalent. This was at 78% in 2010 regarding ten years before the survey then. Thus, while public officials thought the problem of corruption had been alleviated compared to ten years before 2010, many think it is worse today than it was ten years ago. As table 3 below shows, even broken down according to different categories of public officials the overall view is that the outlook is bleaker.

Table 3: Prevalence of Corruption in Government

Category of Public Officials Corruption 10 Years

Ago (%) Corruption Now (%)

Civil Servants in Lilongwe City 40 81

Civil Servants outside Lilongwe City 56 80

District Councils 55 83

Representatives of the Judiciary 100 67

The Executive and MPs 43 93

Malawi Revenue Authority 33 92

Referring to their own organizations, many public officials still believe that their particular organizations are less corrupt. Only 12% mentioned that corruption is prevalent in their particular organizations with 28% saying it is moderate. In 2010, only 7% felt it was prevalent while 31% indicated it was moderate in their organizations. In contrast, a high percent of 57% in 2010 and (50%) in 2013 reported that corruption is non-existent or rare in their specific organizations. The summary in Table 4 below shows the trend in public officials’ perception of corruption in their organizations.

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Table 4: Prevalence of Corruption in Specific Organizations

Category of Public Officials Corruption 3 Years

Ago (%) Corruption Now

(%)

Civil Servants in Lilongwe City 9 11

Civil Servants outside Lilongwe City 14 16

District Councils 14 14

Representatives of the Judiciary 0 0

The Executive and MPs 7 7

Malawi Revenue Authority 25 0

It is clear that while indicating that corruption is generally rampant in government, most public officials think that is not the case in their work places regardless of the type of institution they are working in. Compared to three years ago, most public officials think the state of corruption has remained almost the same except for Malawi Revenue Authority officials who feel that it has declined from 25% in 2010 to 0% in 2013. Gratification paid to public officials represents a slightly high percentage of their salaries in 2013 compared to 2010. Public officials receive an average of 32% of their salaries in gratifications. The average for 2010 was 28%. Disaggregating the public officials into various categories above sheds more light. Gratification accounts for 6% of salaries for those working with the judiciary, which is the lowest. The highest percentage is that of members of the executive branch of government and Members of Parliament which is as high as 81%. Thus, the range of proportions of salaries that is received as gratification has widened from 18%-34% in 2010 to 6%-81% in 2013. Probably the most significant finding is that the highest proportion (43%), which was received by Malawi Revenue Authority officials in 2010, has almost doubled to 81% given to cabinet ministers and MPs in 2013. This shows that corruption is very serious among politicians. While the lowest proportion was for district council officers, at 18% in 2010, now it is as 6% for judiciary workers. The survey further examined whether gratifications that public officials receive benefit others beyond the recipient officials and how they are distributed. They reported that typically a public official shares an average of 26% of the gratification with his or her superiors; 27% with colleagues and 27% with political party agents or politicians in general. This is slightly different from the distribution indicated in 2010 where superiors would get 26%, colleagues 30% and politicians would benefit 15%. Therefore the major change has been an increase in the share that goes to politicians from 15% to 27%. The total share of gratification that is distributed to other beneficiaries has increased from 71% in 2010 to 80% in 2013. This, inter alia, suggests that the system of gratification is well entrenched and that public officials initiate it. The logic is that if gratifications were occasional and not systematized, the concerned public officials would not share such huge proportions. Recruitment is one of the avenue through which corruption can affect the public service. In this survey, public officials were asked about the extent to which employment in their organizations

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is attached to or associated with paying gratification. There is a decrease in the number of public officials who say jobs are acquired by gratification. Only one in every 10 indicated in affirmation in 2013, dropping from 2 out of 10 in 2010. This dovetails well with the earlier observation that public officials generally think cases of corruption are rare in their own organizations. Nonetheless, the decline is a silver lining in the broader picture of the state of corruption, and suggests positive impact of anti-corruption efforts and mechanisms in the area of recruitment. In addition, the survey enquired whether gratification is an issue in recruitment or not. In this regard, public officials were asked to indicate how often jobs in their organization are obtained through gratification. Paradoxically, while few public officials think jobs are obtained through gratification, the percentage of those saying that the most qualified candidate always or usually get jobs had decreased. In 2010, 66% felt that the most qualified applicants are always or usually recruited by their organizations. Now, it is 59% of officials who hold this kind of view. This means there are significantly many cases where people are still employed based on other factors instead of merit. The motivations may not be gratification, but others such as nepotism that are also as detrimental to the integrity and performance of the public service It is argued that poor or lack of rewards system compels some public officials to indulge in corrupt practices. Therefore this survey further enquired whether public officials felt their organizations reward professional achievements. Approximately 4 in every 10 officials say professional achievements are not rewarded at all. This is an improvement from 2010 when 5 out of 10 officials felt the same. Some public officials say that their organizations reward professionalism but only sometimes. The proportion of this group of officials remains almost the same as in 2010. It was 37%; now it is 36%. A combination of those who think their organizations reward fully or often comes to 18%. This is certainly a noticeable rise from 10% in 2010. Therefore, there should be less motivation for public officials to engage in corruption now than it was in 2010 with regard to reward system. Hence cases of corruption in 2013 can be explained less by lack of rewarding for those officials who the officials say are professional in the discharge of their duties. In order to understand the motivation towards corruption, public officials were asked to assess various factors that may explain what lead to corrupt practices in the public service. They were required to indicate whether they thought the specified factor is important or not. The results are shown in Figure 12 below.

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Figure 12: Importance of Causes of Public Sector Corruption

According to Figure 12 above, the most important cause of corruption according to public officials is low salaries followed by lack of transparent political processes. The third is poor economic policies. There are several observations from these results especially when compared to 2010 findings. First, low salaries remain the most important factor with 90% of officials saying it is important. This factor was also ranked as important by 86% in 2010. This is an indication that any interventions to fight public sector corruption should pay particular attention to issues of salaries. Second, lack of transparent political processes at 83% has replaced lack of incentive mechanisms as the next highly acknowledged problem. This supports earlier observations that politicians seem to be more involved in corruption now than in 2010 as indicated by the fact that they now receive a larger share in the gratification distribution chain and the gratification they receive accounts for over 80% of their salaries which is above any other public officials. The third observation is that ‘poor economic policies’ has risen to third in the rank from fifth in 2010. It can further be observed that lack of effective incentive mechanisms has dropped to fourth at 75% from position two at 79% in 2010. The results collaborate the observation above that the more public official (18%) feel that their organization have a good reward system than in 2010 (10%). While in 2010, the least ranked important factor was independent and effective judiciary (55%), now it is lack of effective independent media at 52%. The judiciary has now been mentioned by 58% of public officials. This means public officials think that the judiciary is worse off than it was in 2010 in terms of its contribution to fighting corruption. In contrast, public officials acknowledge the positive impact that the media is having whether based on own initiatives or transmitting messages from the Anti-Corruption Bureau. It is also important to note that 64% of public officials think tolerance or acceptance of corruption as a norm is an important cause of corruption which is a considerable increase compared to 57% in 2010. Therefore, according to

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the public officials, corruption is increasingly being entrenched in the system. This calls for more awareness of the evils of corruption.

4.2 Measuring the Cost of Corruption

One way of trying to measure the cost of corruption is to estimate how much more taxes businesses would be willing to pay if corruption was eliminated. The logic is that corruption imposes constraints on businesses and robs the state machinery of revenue that it would raise if there was no corruption. Therefore, businesses were asked how much more taxes, in percentage of their total revenue, they would be willing to pay if corruption would be eliminated. Similar to 2010, businesses clearly acknowledge the cost of corruption and indicate they are ready to pay more if the business environment was corruption free. The survey findings show that businesses are prepared to pay an additional average of 13% of their revenue; a higher than that mentioned in 2010. The mean percentage is just marginally higher for registered businesses (13%) than for unregistered businesses (12%). Compared to 2010, there has not been any change for registered businesses while the mean for the unregistered has leaped from 3%. This means there is no difference between the effects of corruption on registered and unregistered businesses. In general there is no direct relation between the size of a business and the corresponding burden of corruption they shoulder as indicated by the mean percentage of their income they would pay in additional taxes. Firms with up to 10 employees are willing to pay an estimated average of 14% of their revenue if corruption is eradicated. Those employing between 11 and 50 indicated they are ready to pay about 10% while those with more than 50 employees would pay 14% more. In 2010, the broad picture was that larger businesses indicated they would pay less than smaller ones. The firms with 1 to 10, 11 to 50, and above 50 workers indicated averages of 12%, 13%, and 8% respectively. The general increase of the means compared to 2010 may indicate that firms are more aware of the evils of corruption or that corruption is becoming pervasive and therefore a heavier constraint to businesses. Unlike in 2010 when firms that conduct business with government were likely to pay more than those that do not, in 2013 the results were vice versa. Businesses that had made sales to government in the past two years said they are willing to pay an estimated average of 11% more compared to 14% in 2010. Those that had no business with government are prepared to pay 13% more now while in 2010 such firms indicated they would pay 10% more. Despite this turnaround, it is clear that the difference in the means for 2013 is marginal (2%) such that its implications cannot be overstretched. In the survey, both public officials and businesses were asked to assess how much of gratification is attached to procurement processes. Specifically, public officials had to indicate the approximate percentage of procurement contracts that involve gratification in their respective organizations. They estimated that about 10% of procurement contracts involve some exchange of gratification. This is close to 2010 estimate of 9%. When asked about what proportion of the contract one has to offer in order to secure a contract, the officials pegged it at an average of 8% of the contract value. Similarly, this is about the same as in 2010 when it was 7%. When asked the same questions, businesses indicated that an average of about 20% of all procurement contracts with government involve gratification and they pay an estimate of 11% of the cost of the contract to secure it. Thus the estimates from businesses are generally higher than those by public officials particularly regarding the proportion of contracts when gratification changes hands.

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Businesses were also asked to indicate the percentage of invoice processes in which they offer some gratification in order to secure payment for their contracts. The average estimate for 2013 is 11% while for 2010 was 8%. This frequency shows that there is a significant number of contracts that are awarded based on corrupt practices instead of merit of the bids submitted. Regarding the invoice value that firms must forfeit for them to secure payments, they indicated an average of about 10%. This was estimated at 6% in the year 2010. Comparatively, there is a not much difference between firms that do business with government and those that do not do business with government with regard to the value of gratification they pay to payments. Those that sale to government have to forfeit about 10% of the value on the invoice while those that do not do business with government forfeit almost similar amounts estimated at 9%. This pattern in similar to that of 2010 but the margin is different. Then, firms that were trading with government would forfeit 9% compared to 6% for those that were not. It is important to observe that based on the views expressed by businesses, corruption weighs heavy on their transactions with government. As observed above, they have to pay an estimated 11% of the contract value to secure a procurement contract. After that, they have to forfeit about 10% of the values of invoices in order to be paid. This should obviously have serious implications on the quality of the services they provide since the actual input into the service is much less than what is quoted as the value of the contract. This is one clear illustration of how corruption is affecting public service delivery.

4.3 Sources of Corruption

4.3.1 Typical Patterns of Corruption

The foregoing discussion on the trend and roles of various players, gives a rough indication of who is contributing negatively or positively to combating corruption. In the survey, all the three categories of respondents namely citizens, businesses, and public officials, were asked about their views about who really instigates the problem. They were asked about what typically happens when gratification is paid to public officials; whether the public officials ask for gratification, whether the businesses or citizens offer gratification or whether it is common knowledge to those involved that gratification has to be paid in the concerned transactions known beforehand and how much gratification should be paid. Figure 13 below presents the findings.

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Figure 13: Typical Patterns of Corruption

The pattern is the same for all the three categories of respondents. Typically, public officials ask for the gratification. Particular, this view is widely reported by citizens with close to 6 in every 10 of them reporting this compared to 3 out of 10 who think businesses and individuals are perpetrators. This suggests that in cases of corruption involving ordinary citizens and public officials it is the latter who drive it. Among business, a slightly high percentage (32%) says corruption is instigated by public officials while 29% thinks businesses or individuals initiate it. In contrast with the views of citizens, the high acknowledgment of the role played by businesses may be explained by observation above that firms have to pay gratification in 20% of cases in order to win procurement contracts; hence they are more likely to initiate corruption because they are interested in winning contracts. In comparison to 2010 results, there are a few changes. There is a shift in views of public officials. In the 2010 survey, a slightly high proportion of the officials said in most cases citizens and businesses take the initiative. In 2013 more (40%) are saying that they actually ask for the gratification compared to 39% that indicate that businesses and individual take the responsibility. There is also an increase, from 20% in 2010 to 29% in 2013, in the number of firms that believe that citizens and businesses offer gratifications to public officials. These results show that all the three groups (citizens, business, and public officials) share the blame. With varying degrees, they acknowledge that they are perpetrators of the problem of corruption. But more worrying is the fact that public officials seem to be the chief culprits, which they also do acknowledge. The fact that public officials ask for gratification in order to deliver services to citizens and businesses, the latter realize that if they want things done they have to comply or indeed initiate the gratification. This poses a great risk of a self-drive vicious cycle which may entrench corruption. However, there is hope in that the Figure shows that very few indicated “known before hand” as typifying corrupt transactions. This means corruption is not so regularized to the extent that all players take is as a norm.

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4.3.2 Users’ Experiences with Public Institutions

In the survey, businesses shared their experiences of dealing with public institutions regarding corrupt activities. Specifically, the firms were asked the number of times they had contact with a specified public institution over the past year; then asked the number of times the specified institution asked for gratification. The objective was to estimate the pervasiveness of corruption in the institutions. Figure 14 below shows the number of times, as a percentage of the total number of contacts, when public officials in a particular institution asked for gratification. Figure 14: Percentage of Contacts Leading to Request for Gratification

According to the experiences of various businesses, officers in the majority of public institutions ask for gratifications; there are a few institutions whose dealings with the firms did not involve asking for gratification. As shown in Figure 15 above, the Traffic Police are the most corrupt of all with its officers asking for gratification in 4 out of every 10 contacts they have with businesses. They are closely followed by institutions that have related functions namely, the Road Traffic Directorate and the Police. Compared to 2010, the number of institutions with a clean sheet has increased but from 3 to 6. Among these institutions are the National Roads Authority, Malawi Postal Corporations, and the Administrator General. The Postal Corporations has maintained its record of being corrupt free, at least as measured by it contacts with businesses. There are also significant differences in terms of the ranking. While in 2010, the Internal Procurement Committees were considered the most corrupt, the Traffic Police have now replaced them at the top of the table. The former are now ranked 12th, with only 5% of the contacts being associated with gratifications contrasting

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with 33% in 2010. Institutions that have maintained their 2010 top five positions are the Traffic Police, the General Police (ie excluding the Traffic Police), and the Road Traffic Directorate. The new entries in top five are the Malawi Broadcasting Corporation, the Office of the Accountant General and the Immigration Department (the latter two are tied at 23%). These have replaced the Lands Department and the Internal Procurement Committees. The movements of the Accountant General on the rank from being one of the least corrupt with less than 5% in 2010 to 23% in 2013 in worth noting. Similarly, the MBC has shot its way up from no record of asking for gratifications to 30%. In general, the number of clean institutions has increased, which is a positive record in the fight against corruption in the country. At the same time, however, the intensity of corruption in the concerned institutions has increased. This is evident in that only three institutions were reported to have asked for gratification in 15% or more of the contacts with businesses in 2010, while in 2013 six institutions have a record of 23% and above. The most corrupt institution in 2010 had gratification-contact percentage of 33% whereas for 2013 the record has increased to 43%. In addition to these two overall observations, some institutions namely: the Traffic Police, General Police and Road Traffic Directorate require more targeted efforts to combat corruption because they remain among the most corrupt as was the case in 2010.

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5. Governance and Corruption in Key Sectors

5.1 The Legal and Judicial Sector

The world over, the legal and judicial sectors provide one of the most reliable and effective institutional framework that deals with criminal activities, including the fight against corruption. Consequently, if the legal and judicial framework is not effective, or is itself corrupt, the quest to root out corruption is unlikely to succeed. In this regard, the performance of the legal and judicial sectors, both in aiding the fight against, and in resisting the allure of, corruption, is one of the key indicators in the evaluation of a country’s battle to root out corruption.

5.1.1 Concerns of Businesses over Anti-corruption Legislation and Regulations

In order for the business sector to thrive, it requires a number of key essential components. These include a predictable business environment; sound and attractive economic policies, a transparent business environment and consistency in the application of relevant laws and regulations. Taken together, these legal components help business owners and upcoming investors, both domestic and international, to make meaningful decisions on new investments while creating an enabling environment for enterprises to thrive. The results of the 2013 survey, when compared to those obtained in 2010, show that Malawi has regressed on a number of indicators. In 2013, just less than half (49%) of business owners felt that obtaining laws and regulations affecting their firms were very or somewhat easy. This is down 14 percentage points from the 63% who offered a similar response in 2010. Although the proportion of business owners who feel that laws and regulations affecting their businesses have become somewhat or increasingly easy to obtain has dropped between 2010 and 2013, it is important to note that the 49% saying so in 2013 is still higher than the 38% that offered this response in the baseline survey conducted in 2006. This, however, suggests that the gains made between 2006 and 2010 have not been sustained, even if the situation is still better than it was in 2006. When comparing registered and unregistered businesses, it was found that there was only a very marginal variation in relation to the perceived ease of obtaining laws and regulations affecting business. Specifically, 47% of registered businesses said that it is easy to obtain the laws and regulations while 51% of the unregistered businesses also indicated the same. While the proportion of business owners who feel that obtaining laws and regulations affecting business is somewhat or very easy has declined, there has been a corresponding increase in the proportion of businesses who feel that it has become increasingly difficult to obtain these laws and regulations. In the 2010 survey, for example, only 34% of business owners held the view that obtaining laws and regulations governing business is somewhat or very difficult. In 2013, this number had increased by nine percentage points to 43%. In a further demonstration of the negative trend from 2010, the 2013 study findings show that a higher proportion of registered business owners (49%) now feel that it is somewhat or very difficult to obtain laws and regulations affecting their business while only 40% of unregistered business hold the same view. This yet again represents a reversal from the 2010 study findings, when more unregistered firms (55%) felt that it was difficult to obtain laws and regulations compared to 45% of registered business who held that view. This might be a result of government policy efforts between 2010 and 2013 that have focused on making it easier for unregistered businesses to access laws and regulations governing them while ignoring the needs of the registered business sector.

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Asked about the predictability of changes in rules and regulations governing the business sector, almost half (48%) of business owners feel that the environment is completely or somewhat unpredictable while only 39% felt that it is predictable. Taken together with the findings on accessibility of laws and regulations governing businesses, these figures represent a reversal of the gains noted in 2010 when a majority (55%) of business owners indicated that any changes to the rules and regulations governing the sector were completely or somewhat predictable. In other words, the proportion of business owners who hold the view that the business environment is completely or somewhat predictable has fallen by 16 percentage points between 2010 and 2013, while the proportion of those who detect greater unpredictability has increased by eight percentage points. As in the two previous surveys, business owners in 2013 were asked to offer their assessment on the predictability of laws and regulations governing businesses in the last three years. The findings show that a larger proportion of business owners (45%) feel that changes in the laws, policies or regulations affecting their business have become much less or somewhat less predictable in the preceding three years. A further 19% see no change while 23% feel that the laws, policies and regulations have become more predictable. The 23% of business owners who indicated that the laws and regulations governing the sector in 2013 are predictable represents a 32% overall decline in the confidence expressed by business owners about stability in changes to the laws, policies or regulations governing this important sector when compared to the baseline survey of 2006. In other words, there is a danger that the changes in the country’s business laws, policies and regulations might be taking the country back to the low confidence levels of 2006 while erasing the gains that had been recorded in the 2010 survey. In relation to consistency of general laws and regulations and their interpretations, slightly over half of business owners (55%) in 2013 are of the view that these have been very or somewhat consistent while a third (33%) viewed them as very or somewhat inconsistent. These figures yet again demonstrate the downward trend noted earlier, as the 55% of business owners who perceived consistency in the application of business laws in 2013 was 15 percentage points lower than the 70% who held this position in the 2010 survey. At the same time, the proportion of business owners who see increased inconsistency has gone up by 7 percentage points between 2010 and 2013. Again, while the 2013 ratings are still higher than those that were recorded in the 2006 baseline study, they nonetheless represent a negative trend from the high ratings that were recorded in 2010. While the proportions of registered and unregistered business owners who hold the view that the general laws, regulations and their interpretations have been inconsistently applied is similar among registered and unregistered business owners (31 and 32% respectively,) there are notable differences in the perceptions of the unpredictability of changes in laws and regulations governing the sector. On one hand, 44% of registered businesses are of the view that the changes in laws and regulations governing the sector have been predictable, while only 35% of unregistered business owners share this view. This difference, however, can be explained by the larger proportion of unregistered business owners who appear to lack knowledge of the laws and policies governing the sector. For example, one fifth (20%) of unregistered business owners could not offer opinion on whether laws and regulations affecting the business sector are consistent or not. At the same time, 18% of unregistered business owners failed to offer an opinion on the predictability of changes in laws and regulations governing their businesses. By comparison, only about 5% of registered business owners failed to offer a response to these two questions.

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Overall, the data shows that the gains that were recorded in the 2010 survey have not been sustained, and in many instances, the gains that were registered in 2010 are facing a serious threat of erosion. The negative trends between 2010 and 2013 further suggest that although the business environment in 2013 remains much better compared to the base year of 2006, there has since been a downward trend in relation to easiness of obtaining laws and regulations affecting firms, predictability of changes in business rules and regulations, and consistency of general business laws and regulations and their interpretations. There is thus need for renewed effort to improve across all areas in order to regain and boost the confidence of the business sector.

5.1.2 Access to the Court System

In keeping with previous Governance and Corruption surveys, households and registered business firms were provided with several statements to capture possible obstacles to the accessibility of the court system in Malawi. Respondents in both the business and household surveys were then asked to indicate whether the extent of these obstacles was minor, moderate or major. Unregistered firms were not asked these questions because it was established that due to their nature of their operation, many are unlikely to engage the court processes as business entities. Figure 15 shows the frequencies of the commonest obstacles that are considered to be major in limiting access to the court system by individual firms and households alike.

Figure 15: Obstacles to Accessing Court System, 2013

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The top four obstacles limiting access to the court system cited by business are: long court processes (76%); the belief that court decisions are influenced by corruption (69%); high fees for lawyers (59%) and a concern that there is lack of enforcement mechanisms to implement court decisions (59%). Among ordinary citizens, the top three constraints cited as contributing to limited access to the judicial system are: high lawyer fees, cited by nearly four fifths (79%) of households; the view that court decisions are influenced by corruption (73%) and the lengthy duration of the court processes cited by nearly three quarters (73%) of households. Nearly three quarters of citizens also find that courts are too far, which further hinder access as well as concerns that the judicial processes are too complex (51%) for ordinary citizens to understand. The many obstacles encountered by ordinary citizens in particular, suggest that the Malawi judicial and legal systems need to be reviewed and retooled to make them more accessible to ordinary citizens, in whose name most court decisions are made. Although the major obstacles to using the court system have remained the same between 2010 and 2013, there is a general sense of a worsening of the factors that limit access for both businesses and ordinary citizens. It is noteworthy that the perception that court decisions are influenced by corruption has gone up between 2010 and 2013 among both business owners and individual households. Among business owners, the perception that court decisions are influenced by corruption has increased from 50% in 2010 to 69% in 2013. Among ordinary citizens, the perception has similarly gone up from 60% in 2010 to 73% in 2013. Not only is the perception that corruption is a major factor in influencing court decisions higher in 2013 compared to 2010, it is also higher even when compared to the base year of 2006, when 60% of households and 60% of businesses held this view. This further underscores the perception of worsening situation with regard to corruption in the country generally and in the judicial sector in particular. Although very few gratification payments were made to judicial and legal officials in 2013, there are still signs that some sections within this sector are susceptible to taking payments even when services are meant to be free. For example, there were a few reports of business owners making payments to some legal officials as gratification in return for services rendered. On average, business owners paid K1, 200 to law enforcement officers as gratification and an average of K330 as gratification to court clerks. However, as was the case in 2010, none of the business owners ever paid out gratification to Judges, Magistrates, Public Prosecutors, Legal Aid officers and Court Messengers. This represents a slight improvement over the results of the 2010 surveys, when some businesses indicated making gratification payments to Judges and Sheriffs. Although the number of gratification payments has declined slightly from 2010, they still have the potential of denting the image of these key anti-corruption institutions for those who encounter them. In keeping with past practice, the 2013 survey wanted to know if household members and registered business owners had initiated a legal action in the preceding three years. The results show that only 11% of households had initiated a legal action in the last 3 years, a slight increase from the 8% who reported doing so in 2010. Among the registered businesses, 23% reported to have initiated legal action in the preceding three years, an increase of 5 percentage points from 2010.Just like in 2010, the likelihood of initiating a case among businesses rises with the size of the business.

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Figure 16: Business Size and the Propensity to Initiate Court Cases, 2013

Overall, the likelihood of initiating litigation goes up as the number of employees in a registered business increases. In particular, the rate of litigation in 2013 among businesses with more than fifty employees was six times higher than businesses that had between one and ten employees. Having a large number of employees therefore appears to attract more litigation. Focusing on those who had filed a court case, when asked whether they received any indication that they were expected to pay some gratification to court personnel in order to get a favorable decision in the case, 34% and 10% of the citizens and businesses respectively agreed that they had received some indication that they were expected to pay some gratification. Compared to the 2010 survey, there is no statistically significant change among citizens while for businesses, there has been a substantial decline in perceptions that business owners will be required to pay some gratification. In 2010, 36% of the citizens mentioned that they had received indications that they were expected to pay some gratification. Among the business owners, 27% indicated that they had received indication that they were expected to pay some gratification, which is 17 percentage points higher than the 2013 figures. Although there have been some modest improvements in terms of the proportion of both citizens and businesses who are made to believe they need to pay gratification, there is still need to completely eliminate this perception, especially as it impacts negatively on confidence in the judicial system among citizens and businesses alike. Courts should be seen by the public as neutral and that the decisions made are and will be objective. Any indications that justice is only available at a cost, even if the numbers are low, has the potential of discrediting the integrity of court systems in the country. On average businesses indicated that it took 10 months to resolve their most recent court cases and 5 months for citizens. The increasing challenges in accessing judicial services, coupled with the lengthy delays before cases are disposed of, appear to be dissuading business and individuals from contemplating the pursuit of further court cases. This is reflected in the fact that while in the 2010 survey 48% of businesses who had initiated legal action said that their experience with court system would lead them to sue again, only 30% indicated the same in 2013. This probably implies an increasing negative experience of the court system or processes by the business sector that needs special attention. This should be a cause of concern

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especially coming after the introduction of commercial courts that are expected to expedite the handling of cases involving business enterprises. In the 2010 survey 18% of ordinary citizens said that in the preceding two years, they or someone in their household felt the need to use the court system to resolve a dispute, but decided not to. The figures have statistically remained the same, as 16% indicated that they also decided against using the court system to resolve a dispute. While the marginal decline of 2 % suggests a positive trend, it still is a matter of concern that there are citizens who are opting out of using the court system due to frustrations or the challenges that they encounter in accessing the formal justice sector. In this regard there was a significant difference between rural and urban citizens with the urban citizens showing a greater likelihood (28%) of not using the court system as compared to the rural citizens (14%). This is exactly the same pattern that was recorded in the 2010 survey, when an exact proportion of urbanites (28%) indicated that they would be reluctant to seek court assistance to resolve disputes compared to 18% among rural residents. The fact that a higher proportion of urban citizens express high reluctance to seek assistance in the court system compared to their rural counterparts is an interesting result, especially since it is generally expected that the urban residents, who are close to courts (and may also probably afford the court related costs) should be more willing to use the judicial services. More importantly, several informal conflict resolution mechanisms exist in the rural as opposed to the urban areas. One possible explanation could be that urban residents are more aware or knowledgeable of the court processes and their related negative consequences as opposed to the rural residents. In this regard, urban residents have a more negative perception of the court processes based on actual experience when compared to rural residents. The business sector has, however, continued to demonstrate a downward trend in the proportion of owners who are choosing to opt out from using the formal court system. In the 2006 baseline survey just under half (45%) of business owners had indicated that their firm ever felt the need to use the court system but decided not in the preceding two years. In 2010, this number fell to 25% and has fallen further in 2013 to 21%. This downward trend might suggest increasing confidence in the judicial system to help resolve disputes among the business sector. The fact that a fifth of business owners are still deciding against using the court systems, even when faced with a situation requiring court services, is still a matter of concern. When firms choose to bypass the formal justice system, they might be negotiating conflicts in an unsatisfactory and potentially divisive manner that could stall development prospects. Registered businesses and ordinary citizens share similar views regarding Alternative Dispute Resolution (ADR). Among citizens, 41 percent report to have used ADR mechanisms in 2013 while an almost similar proportion of businesses (45%) used ADR. Both figures suggest an increase in the usage of ADR mechanisms, as in the 2010 survey, only 32% of citizens and 38% of business owners, indicated that they had used ADR. This can either imply that the nature of conflicts are not serious enough that both citizens and businesses are utilizing the ADR option more, thus leaving the courts to attend to the most serious cases. An alternative explanation could however draw on the challenges that businesses and citizens have highlighted in accessing court services. The findings of the 2010 survey had showed that a higher proportion of registered businesses, compared to non-registered ones, opted against ADR in order to resolve conflicts. However, by 2013, the trend had reversed, as more registered businesses (48%) reported having used ADR while only 30% of unregistered businesses reported utilizing this option. This is complicated by

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the fact that unlike in the 2010 survey, when registered businesses that had initiated legal action indicated that they were likely to sue again (based on their positive court experience), few expressed similar interest in 2013. So if businesses are ignoring ADR and court systems, the question that emerges is which alternatives they are currently pursuing to address their legal issues. This calls for a critical review of the court and ADR systems to make them attractive to business enterprises. In 2013, registered business owners and households that used ADR were further asked to mention the persons or institutions they used to resolve their disputes. The responses are summed up in Figure 17 below.

Figure 17: Alternative Dispute Mechanisms/Institutions Utilized

Among business owners, the top three ADR options are friend and family (26%); formal mediator/arbitrator (22%) and lawyers (19%). On the other hand, ordinary citizens seek the help of both formal and informal institutions to resolve disputes. Among the most common ADR mechanisms utilized by ordinary citizens include contacting Members of Parliament, consulting traditional leaders, marriage counselors, friends and family.

5.2 Education Sector

All respondents in the household survey were asked to share their experiences with the education sector in the country. Of those interviewed, 16% of households did not have a child attending school. Just like the 2010 results, 93% of the respondents in the 2013 survey reported that the eldest school-age child in their household attends school. Of these, 73% attend nursery or primary school, 24% secondary school, and 3% college or university. These results are almost exactly the same as those obtained in the 2010 and 2006 surveys. Although the country

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has recently seen a proliferation of private primary schools, a very high proportion of children (84%) were attending government schools in 2013. Private school enrollment meanwhile stood at 10% while mission schools were enrolling 6% of students. These numbers are almost identical with those obtained in the 2010 survey as shown in Table 5 below.

Table 5: Educational School Enrolment by type, 2010 and 2013

Type of school / Survey year 2010 2013

Government 82 84

Mission 8 6

Private 10 10

Although the private sector and, to a lesser extent, missions, have increased investment in recent years, the results show that a majority of the country’s citizens are still relying on sending their children to government schools. As was the case in 2010, the number of children going to mission or private school is higher in urban areas (36%) than in rural areas (12%). The corresponding figures in 2010 were 41% in urban and 14% in the rural areas. The higher proportion of urban households who are able to send their children to either mission or private schools arguably reflects the urban-rural income divide: urban residents are more capable of paying for the education of their children while rural citizens lack the necessary monetary resources to pay for the education of their children in private or mission schools. The fact that public education institutions enroll the largest proportion of Malawian school children should serve as an important reminder to government to invest more resources in the sector to prepare the country’s children for meaningful contributions to the country’s development. If this is not done, the gap between the rich and the poor will continue to widen as only the children of wealthy parents will be able to access good quality education in private and mission schools. The mean/average fees paid by those sending their eldest school-age child to mission or private school was K16, 435 (minimum K1.00 and maximum K480, 000.00). However, the majority do not pay school fees because they attend government schools (76%). There is a slight increase in the number of those not paying fees when compared to 2010 survey results whose figure was 70%. Among those that pay fees, only 7% felt that the cost was somewhat or very expensive. Since the majority are not paying fees, and those that pay feel that it is not expensive, access to education in Malawi, from the view point, is not blocked by financial capabilities. Over four-fifths (83%) of Malawians feel that the schools their children attend are good or very good. Only a relatively fewer percentage consider the schools poor or very poor (16%). This shows an improvement in the quality of schools since 2010, when the survey results showed that only 68% Malawians rated the schools of their eldest children as good or very good while nearly a third (31%) rated the schools as poor or very poor. Similarly, irrespective of the type of school being referred to, almost all respondents felt that the schools that their children were attending were of good or very good quality. Interestingly, however, parents who send their children to private schools express the greatest satisfaction in the quality of schooling compared to those that send children to government schools. Overall, 84% of parents rated government schools as good or very good. The quality of schooling in mission and private schools is rated as the same, with satisfaction levels of 80 and 78 percent respectively. Taking into consideration that the majority of children attend government schools, it is important that the current standards be maintained or improved upon.

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Meanwhile, considering the high fees that are levied by private and mission schools, government should work with these schools to ensure that the quality of education offered is commensurate with the high fees that parents are paying. Households with school age children were further asked to comment on the overall quality of their child’s school over the preceding three years. According to the findings, 52% said that it is better or much better, 48% say it has stayed the same and 12% feel that it is worse. These figures are almost identical to the findings of the 2010 survey, when 50% said that the schooling of their children was better or much better; 30% felt that it was the same, and 12% felt that it was worse. Among respondents who had children in government schools 51% feel that their school is better compared to 16% who feel it is worse. In general, the perception of households is that the education sector in Malawi, irrespective of whether it is private/mission or government, has improved when compared to the 2010 survey results. The main negative observation, which needs close attention, is that the percentage of those paying gratification has almost doubled from 7% in 2010 to about 13% in 2013.

5.3 Health Sector

In relation to their experience to obtain healthcare in the past 12 months, 78% stated that someone in their household had visited a health care facility such as a hospital, clinic, etc. to obtain care. This is nearly the same as the 80% of households who reported using health care facilities in the 2010 survey. While in 2010, there were more urban residents who reported having visited the healthcare facilities compared to rural residents, the 2013 survey findings reveal almost no difference in usage of healthcare facilities by location. Instead, nearly as many urban residents (79%) as rural residents (78%) visited health care facilities. In relation to the type of health facilities visited, urban residents are more likely to visit hospitals (61%) than rural residents (42%). Conversely, more rural residents visit clinics or primary health providers (58%) than urban residents (39%). In an interesting reversal from previous survey findings, rural residents (15%) were more likely in 2013 to have visited mission or private hospitals compared to 9% of urban residents who utilized non-government facilitates. The findings also show that less than 2% of respondents ever paid gratification to health care officials. However, for those who made a payment, this ranged from a minimum of K4.00 to a maximum of K4, 500.00. Respondents who used health facilities were asked to evaluate the medical staff and conditions of facilities. Table 6 presents the results of the 2013 evaluations compared to those of 2010.

Table 6: Evaluation of Healthcare by Facility Used (2006 and 2010 results)

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Quality of Medical Staff

Quality of facilities

Government Mission Private Government Mission Private

2010 2013 2010 2013 2010 2013

2010 2013

2010

2013

2010

2013

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72 74 84 90 90 97 76 74 82 90 89 97

Poor/Very poor

28 25 16 10 10 3 23 25 17 10 10 3

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When the 2010 and 2013 results are compared, it is clear that both categories of health services (quality of staff and facilities) are positively evaluated across all three types of health facilities. However, consistent with the 2010 findings, private and mission hospitals are evaluated more highly than government facilities. Although the quality of services in private health facilities was already high in 2010, the 2013 ratings suggest that overall, private medical facility users are even more satisfied in both measurement categories (from 90% in 2010 for quality of medical staff to 97% in 2013; and an improvement from 89% positive rating for quality of facilities in 2010 to 97% in 2013). All in all, despite some variations, a comparison of the 2010 and 2013 survey results show that Malawians in general, are putting more confidence in the health sector in relation to quality of medical staff and facilities- especially in the private sector. More importantly gratification payment remains very low in the health sector.

5.4 Public Utilities

In the 2006 and 2010 survey results, there was a marked difference between rural and urban residents in relation to access to public utilities such as connection to public electric supply, water supply and telephone lines. The situation in 2013 suggests that there has been some change in the stark differences in access to public utilities by location as presented in Figure 18.

Figure 18: Access to Public Utilities by Location, 2013

Only 2% of rural households reported being connected to public electricity supply, 2% are connected to water supply and a meagre 0.2% have fixed telephone lines. Although the differences between rural and urban residents with regard to connectivity to public utilities are large, there are also differentials in urban areas where those who are connected to these public utilities are also few and skewed by income. In a demonstration of urban poverty, only 50% of urban residents report having connection for water supply and only 7% have fixed telephone lines. Despite the fact that there is a low number of households that are connected fixed telephone lines, this does not necessarily imply that communication in this area is impeded as availability of mobile phone facilities have greatly lowered the need for fixed telephone lines.

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Although the 2010 survey findings recorded a decline in the likelihood of households getting connected to public utilities using unofficial channels, the 2013 survey demonstrates that those gains have not been sustained. Instead, the proportion of households that have obtained these three public utilities through unofficial means has increased between 2010 and 2013 as depicted in Table 7 below.

Table 7: Type of Connection to Public Utilities, 2006-2013

Utility type

Type of connection

Survey Year

2006 2010 2013

Electricity

Officially 94 97 92

Unofficially 5 3 8

Water

Officially 82 99 94

Unofficially 14 0.9 4

Telephone

Officially 68 100 88

Unofficially - 0 13

Unlike the 2010 survey results which showed a sizeable number of households getting connected to public utilities using official channels, in 2013 there has been a significant increase in the number of respondents who report getting connected to public utilities unofficially. This could imply that the formal connection systems in the responsible public institutions have become more inaccessible, forcing new consumers to seek alternative and non-official means to get connected to the services. Among the notable declines are in the connection to electricity and telephone services. In fact, in the case of electricity, the proportion of respondents who report obtaining this particular utility through official means fell by a full 5 percentage points from 97 to 92%. Meanwhile, the proportion of respondents who reported getting electricity connection through unofficial means is actually higher in 2013 (8%) compared to the base year of 2006 (5%). With regard to telephone connections, all respondents who obtained this utility in 2010 reported getting connected through official means. However, in 2013, only 88% reported getting telephone connections officially while a further 13% used unofficial channels. For water, nearly all respondents (99%) reported getting this service officially in 2010. However, the results of the 2013 survey show a decline even in this area as well, as 94% of respondents report getting connected to water supplies officially while four percent reported getting connections through unofficial channels. Comparing the 2013 survey results with those of the 2006 and 2010, there is a general belief that the quality of service has been on a continuous spiral of decline. Overall, the increasing trend of unreliable public utility services that was recorded in 2010, continued in 2013, with the reliability of services going down even further than 2010 as shown in Table 8 below.

Table 8: Reliability of Public Utility Services, 2006-2013

Year/ Type of utility

2006 2010 2013

Electricity 82 29 28

Water 87 77 56

Telephone 91 89 81

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Overall, the reliability of public utilities in 2013 was considered worse than in 2010 and 2006. Although the reliability of electricity services has remained the same between 2010 and 2013, less than three in 10 respondents considered the quality of the service to be reliable. For water and telephone services, the reliability of service in 2013 is rated worse than that recorded in 2010, which itself was lower than the high ratings recorded in the baseline survey of 2006. The largest decline was in the reliability of water services, which fell further from 77% reliability to just above half (56%) in 2013. Public satisfaction with the reliability of major public utilities has gone down across the board and this calls for serious need by the service providers to find ways of ensuring reliable service supply. The results of the 2013 survey further show that nearly all citizens that have access to utilities such as electricity, water and telephones, use official channels to pay their bills. Only one percent of respondents said they paid their electricity and water bills using unofficial channels while no one used unofficial payments for telephone bills. Despite the fact that most citizens use official means to settle their utility bills, some citizens, albeit a small minority, believe that their electricity and water bills can be reduced through payment of gratification. Some have actually paid such gratification to secure supply. The results show that 10% of respondents, for example, believe that they can get their electricity bills reduced through payment of gratification while nine percent think they can avoid payment of water bills by offering gratification. In fact, 23% of respondents report to have paid gratification in return for electricity supply while a further 8% report to have made gratification payments to secure water supply. Figure 19 below summarizes these findings.

Figure 19: Unofficial and Gratification Payments for Service Utilities, 2013

The 23% who reported to have paid some gratification in return for electricity supply in 2013 represents a slight decrease from the 29% who paid gratification related to electricity in 2010. The eight percent who report to have paid gratification for water services meanwhile represent a slight increase from the five percent who reported to have done so in the 2010 survey. The only exception to the use of gratification for accessing service utilities is for telephone service. No respondent felt it is possible to get a reduced bill upon payment of a gratification. Not surprisingly, no single individual also paid any form of gratification as a means of securing the supply of telephone service.

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Unlike in 2010 when 95% of businesses indicated that they were connected to the public electricity grid, the proportion of businesses that report being connected had fallen to 58%in 2013. This declining rate of power connectivity might reflect stagnation on electricity generation, which is in turn making it difficult and impossible for new firms to get hooked to the national power grid. The net effect of unavailable and unreliable power means that many firms are being forced to use generators to provide backup power. It is thus not surprising that as many as a quarter (24%) of firms report that they own a generator to provide backup power due to the unreliability of electricity supply from the national grid. In an era when the mobile phone has become the modal form of communication, superseding fixed phones, the 2013 survey findings show that the number of businesses that are connected to a traditional landline telephone system has declined significantly from 70% in 2010 to 29% in 2013. Against the declining landline telephone connectivity, a high proportion of firms (82%), report that they are now using mobile phones as the primary means of communicating. When asked to explain the preference over mobile phones, a majority (53%) of the business respondents cited the convenience of using mobile phones over regular land-line phones as the primary reason while a further 33% indicated that mobile phone service is more reliable than regular phones.

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6. Fighting Corruption

6.1. Political will

According to the 2013 survey results, public officials feel that the desire to fight corruption is more genuine in the own organizations than in general government institutions as shown in Figure 20 below. This is in sharp contrast with the 2010 results which indicated that the level of desire was more or less the same at just below 90 per cent. It is, however, worth noting that there is generally a decline in the genuine desire to fight corruption in both cases. The desire in own organizations dropped from about 88% in 2010 to about 80.9 per cent while that of government dropped from about 88 per cent in 2010 to 57.9 per cent. This is an unwelcome trend especially when concerted efforts are reportedly taken to curb corruption.

Figure 20: Public Officials’ Opinion on Political will to Fight Corruption

Just like in the previous surveys, ordinary citizens were asked whether or not they agree with the statement that “corruption is a natural occurrence and part of our daily lives, so denouncing it is unnecessary”. The results show that 71.5% of the respondents strongly disagreed with this particular statement which is substantially lower than the proportion of respondents that reported strongly disagreeing with this particular statement in the 2010 survey. This should raise some alarm because it suggests increasing acceptance of corruption as a fact of life.

There is a strong feeling that the overall efficacy of the government’s anti-corruption strategy has dramatically declined. While in 2010 59 % of the respondents said that it was effective, only 35.5% indicated as such in 2013. This is a substantial decline especially when one considers that in the 2006 baseline survey as many as 75% of the respondents deemed the government’s anti-corruption strategy effective. The 2013 survey results clearly show that confidence in the government’s anti-corruption strategy has been substantially eroded over the years.

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6.2 Public Agencies in the Fight against Corruption

According to the household survey results, institutions that were rated highly in combating corruption included: the media (73.6%), churches/religious organizations (72.6%), Non-governmental Organizations (61.1%), academicians and teachers (60.9%), the Anti-Corruption Bureau (50.5%), the Police (49.6%), and Office of the Ombudsman (48.5%). The media and the churches/religious organizations have more or less retained the levels of performance recorded in 2010 at 74%and 72% respectively. It is striking to note that the performance of the Anti-Corruption Bureau has dramatically gone down from 73% in 2010 to 50.5% in 2013 which raises serious concerns about the country’s prospects of winning the battle against corruption. Academicians and Teachers are star performers according to the 2013 survey results. While they were rated only at 30% in 2010, the 2013 survey results put them at 60.9% as the third most effective institution in fighting corruption. The main concern generally is that most public agencies just as was the case in the 2010 survey have scored less than 50%.

Figure 21: Citizens’ Assessments of Institutions Performance in Combating Corruption

The star performance of the academicians could perhaps be attributed to the protracted academic freedom struggle lasted for almost the entire 2011 and the efforts of the ACB to push for the inclusion of such corruption issues in both primary and secondary school curriculum. The media have maintained top position probably because they relentlessly continued to unravel high level corruption tendencies both in the public and private sectors.

6.3 Reporting Official Corruption

As was the case in 2006 and 2010, households and public officials were asked whether they had observed any corrupt practices by public officials in the past two years. Furthermore those respondents that indicated having observed any corrupt act were then asked if at all they reported the act to relevant authorities. The results are provided in Figure 22 below which shows that 69% of the households did not observe any corrupt act which is a drop from 72 per cent reported in the 2010 survey. A similar trend emerged for the public officials. There was a

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drop in the proportion of public officials that reported to have observed any corrupt act from 63% in 2010 to 53% in 2013. Only 10 percent of the households who reported observing corrupt acts reported them to relevant authorities and the proportion for public officials who reported the corrupt acts was higher at 28%. Contrasting with 2010 statistics, the proportion amongst the citizenry dropped slightly from 25% but it increased slightly amongst public officials from 27%

Figure 22: Observation and Reporting of Corrupt Acts

Public officials and citizens who reported corruption were asked if the reporting process was effective, simple and whether it protected them from harassment. Results show that only 46.7% of the citizens thought that the process was simple. This is down from 70 per cent in 2010. As regards the effectiveness of the reporting process, only 44.8 per cent reported that the process was effective. This is also down from 57 per cent in 2010. In terms of the whistle blower being protected from harassment, 33.4 per cent of the citizens thought that this protection was there. This is almost similar 2010 results where the proportion reporting the same was 33 per cent. The majority of public officials who reported corruption felt that the process was simple (73.2%), effective (69.8%) and it provided the necessary protection from harassment (70%). Proportions for the public officials in 2013 do not deviate much from those of 2010 (73% simple, 77% effective and 70%provided necessary protection from harassment).

Those that had observed corrupt practices and did not report were asked why they failed to do so. The results of the reasons why they did not report the corrupt acts they observed are presented in Figure 22 below and as advanced by both the citizenry and public officials. Reasons advanced by the citizenry were: they knew there would be no enforcement (26%), they knew the act could not be proven (22%), they knew the act would not be investigated (21%), they thought the process would take long (20%) and they thought corruption was a custom (9%). The reasons provided by public officials included the following: they knew that investigations would not be made (25%), the process would take long (25%), knew cases could not be proven (13%), feared that there would be no enforcement (11%), corruption is a custom (8%), corruption is justified (7%), and were concerned about potential harassment (7%). Only 2% of public officials indicated that they did not know where to report and this is down from about 8 per cent in 2010. Amongst the citizenry, nobody indicated that they did not know where to report, down from about 26 per cent in 2010. This is a great improvement in the levels of awareness about the institutions where corruption should be reported to.

Did not observe, 69, 69%

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Figure 23: Reasons for not Reporting Corrupt Acts

However, further analysis of the data reveals that the citizens are generally not fully aware of the processes of reporting corruption. The results show that only 17.6% of the citizens fully knew the process of reporting corruption. In contrast, the survey of public officials revealed that as high as 73.1% of them knew the process of reporting corruption. The main concern is that the level of knowledge among the ordinary citizens regarding the process of reporting corruption has declined from 22% in 2010 while it has essentially remained the same among the public officials as it was in 2010. These results could partly explain why fewer people among the ordinary people reported corrupt acts which they observed taking place. This really calls for intensification of efforts of the ACB in awareness raising about the processes of reporting corrupt activities to the relevant authorities in order to increase the number of corrupt cases being reported.

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7. Conclusions and Recommendations The 2013 Governance and Corruption survey was conducted to gauge the levels and trends of corruption with particular focus on how they impact on the governance situation of the country. The overriding motivation of these surveys is to systematically track the incidence and trends of corruption as a key strategy for reviewing, refocusing and revamping the anti-corruption efforts. The results provide an overarching strategic direction and guidance on how to plan, execute, monitor and evaluate a wide array of anti-corruption efforts.

The importance of concerted and successful anti-corruption efforts cannot be overemphasized. This is the case because as consistently intimated in this report a corrupt free environment is very instrumental to catalyzing fundamental and sustainable development of a society. Corruption is quite a huge obstacle to development as it creates poverty; increases the gap between the poor and the rich; incite social unrest and dramatically reduces the capacity for a country to reach better overall levels of development.

The findings of this report, however, paint a rather gloomy picture about the country’s capacity and commitment to successfully fight corruption and create an enabling environment that ensures that those entrusted with the task of providing quality public resources and assets do so in a safe way, in a fair, honest and professional manner. The apparent gains that appeared to have been made in the fight against corruption as demonstrated by the 2010 survey results have not been sustained. The 2013 survey results actually show that the country has experienced regression almost on every other index that is tracked. The results generally point to corruption becoming more or less systematic and deeply entrenched in public life.

The findings of the 2013 survey raise some serious concerns in relation to the country’s prospects for democracy deepening and attainment of inclusive and sustainable development. They, inter alia, show unequivocally for that matter that nepotism, cronyism, lack of transparency and accountability and greed are rife in the country’s public sector. The combined effect of these vices especially in a context where citizens express a great deal of cynicism in the efficacy of public sector institutions as the results of the 2013 survey demonstrate, presents serious challenges to the sustenance of the good governance agenda.

Drawing on the findings of this survey, the following recommendations are made with the expectation that they will contribute to laying a solid foundation for sustainable and transformative anti-corruption efforts. The recommendations are divided into two broad categories, namely: general and specific in an attempt to provide a platform for possibly very well focused and innovative anti-corruption efforts. It is, however, quite important to note that most of the recommendations that were made in the previous surveys are still very relevant. There are even more relevant this time around given that the results show that the country’s efforts to fight corruption have been substantially derailed. In other words, the corruption situation in the country has greatly deteriorated underlined by the proverbial “cashgate” scandal.

The worsening trends of corruption as portrayed by the 2013 survey results raise one fundamental concern related to the implementation of the recommendations that have been over the years to their logical conclusion. It is clearly one thing to come up with a beautiful list of recommendations but quite another to actually implement them. The results suggest that there is somewhat laxity in the implementation as well as enforcement of strategies meant to fight corruption.

The set of recommendations below have been categorized into specific and general ones. The specific ones entail those that the ACB can implement on its own where as the general ones are

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dependent on the ACB enjoying the goodwill and cooperation of other stakeholders to successfully implement. This means that the fight against corruption should be understood as a collective national effort in which each relevant stakeholder is expected to play their role while the ACB takes the lead in driving the implementation of a gamut of anti-corruption strategies and interventions.

Specific Recommendations

Undertake a comprehensive political economy analysis of the implementation of the anti-corruption efforts which will be quite critical in terms of identifying barriers to and opportunities for implementation of anti-corruption strategies.

Review and strengthen the anti-corruption legislative framework because a robust legal and regulatory framework properly enforced guarantees legitimacy.

Promote corruption risk assessments interventions especially amongst those agencies that have been poorly rated in terms of performance, honesty and integrity which would greatly help to prevent corruption and establish mechanisms for early detection of misappropriation, fraud and major losses of essential resources.

Hasten the plans to streamline the scope of the survey to make it cost efficient and effective so that it can be carried out regularly to provide strategic guidance in the anti-corruption efforts.

Publicize the results of the governance and corruption surveys widely as a way of putting pressure on consistently corrupt agencies to change their ways of doing business.

Promote a culture of reporting corrupt activities by both citizens and public officials by widely publicizing the authorities or institutions to which they can be reported to as well as the procedures involved.

General Recommendations

Promote a citizenry that does not tolerate corruption through socialization and various forms of civic education programmes emphasizing on values of honesty, hard work and positive competition among many others.

Cultivate strong political will to fight corruption among political leadership at all levels of society such that leaders in all spheres should not condone corruption.

Make corruption very costly by making officials pay heavily for their acts of commission and omission.

Identify and respond to the major challenges in service delivery since poor service delivery is one of the key triggers of fraud and corruption.

Promote simplification of procedures such as setting clear guidelines for the transparent conduct of public affairs and eliminate red-tape and bureaucratic obstacles to innovation.

Ensure that supreme audit institutions are independent of the Executive and are properly resourced to carryout checks and balances that are critical to preventing fraud, corruption, cronyism and mismanagement.

Advocate for sustained and committed leadership that embodies the core values of good governance at every level of society because when leaders are committed to transparency, integrity and accountability and live by these standards they set the tone for the rest of their followers.

Advocate for transparent and accountable financial systems for they have tremendous potential to prevent corruption especially when backed up by anti-corruption programmes and rules that all employees understand and follow.

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