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Overseas Aid: Corruption

Volume 455: debated on Thursday 25 January 2007

To ask the Secretary of State for International Development what estimates he has made of the proportion of the UK overseas aid budget lost to corruption; and in which countries this occurs. (110809)

The amounts lost to corruption cannot be easily identified due to its hidden nature. The World Bank's public website summarises the situation well:

“Corruption is a cancer and no country, rich or poor, is immune … Fraud and corruption have undoubtedly occurred in [Bank-funded] projects, but it would be nearly impossible to determine how much [Bank] money might have been lost. Corruption on a world-wide, country by country basis has not been measured by anyone, given the difficulties and enormous costs of collecting quantitative data on the subject”.

However, while corruption is impossible to assess fully, DFID is working actively to combat it domestically in the UK, with partners at the country level and internationally. Where instances of fraud or corruption do come to light, our policy is one of zero tolerance and action will be taken to recover any funds that have been lost.

We have a range of preventative controls and procedures in place to minimise the risk of DFID funds being lost to corruption. With partner countries, we support them to improve national systems and reduce the risk of funds being wasted or misused. Together with other international partners, we are providing ongoing support for long term programmes to strengthen the public financial management systems of many partner governments, for example in Malawi, Mozambique and Rwanda. These programmes typically address a range of public financial management issues from budget planning and design (e.g. helping to establish medium term expenditure frameworks); to improving infrastructure (computerised financial management information systems); to helping strengthen key institutions such as the National Audit Office. We also support many initiatives with civil society, parliaments and anti-corruption bodies to increase the demand for accountability and better governance.