African Union leader Nkosazana Dlamini-Zuma told President Obama on Tuesday that multinational companies are largely to blame for the corruption that Obama has said Africa needs to combat in the years ahead.
"Corruption is a global phenomena that is of great concern to all of us," Dlamini-Zuma said with Obama in the room on the last day of his Africa trip. She then pointed to a study led by former South African President Thabo Mbeki that said more than $50 billion in "illicit flows" leaves Africa annually. Of that, 60 percent is caused by the "activities" of multinational commercial enterprises.
Only 10 percent is the result of political corruption, and "criminal activity" accounts for the remaining 30 percent, she said.
"It means we have to look at corruption and attack it from all angles," Dlamini-Zuma said. African nations need to instill good governance but globally, companies need to build "good corporate culture," she added.
Obama did not back down during his remarks but did concede that corporate corruption is not unique to Africa.
"Nothing will unlock Africa's economic potential more than ending the cancer of corruption," he said to applause. "And you are right that it is not just a problem of Africa, it is a problem of those who do business with Africa. It is not unique to Africa — corruption exists all over the world, including in the United States."
"But here in Africa, corruption drains billions of dollars from economies that can't afford to lose billions of dollars," Obama continued. "And when someone has to pay a bribe just to start a business or go to school, or get an official to do the job they're supposed to be doing anyway — that's not 'the African way.'"
Obama said the U.S. will help Africa get fair deals from corporations but that first, African leaders must address governmental corruption.
"Only Africans can end corruption in their countries," Obama said. "As African governments commit to taking action, the United States will work with you to combat illicit financing and promote good governance and transparency and rule of law. And we already have strong laws in place that say to U.S. companies, 'you can't engage in bribery to try to get business,' which not all countries have. And we actually enforce it and police it."
During her opening remarks, Dlamini-Zuma also asked Obama to help her correct a "historic injustice" at the United Nations.
"Africa is the only continent not represented" on the Security Council, she said. The African Union is asking each permanent member of the Security Council to rectify that by elevating an African nation to permanent status, she said without naming a specific country.