Introduction
As nations vie for a larger share of global business, many are increasingly overlooking corruption in favour of economic gain and national interests. This shift, exemplified by President Trump’s nationalist stance, ignores the profound impact that weakening anti-corruption regulations, such as the Foreign Corrupt Practices Act (FCPA), can have on developing nations—especially resource-rich African countries.
On February 6, 2025, Transparency International released its 2024 Corruption Perceptions Index (CPI), ranking 180 countries and territories based on perceived public sector corruption. The report once again spotlighted the global corruption crisis, urging governments, international organizations, and businesses to prioritize anti-corruption efforts.
Yet, just four days later, President Donald J. Trump signed an executive order pausing the Foreign Corrupt Practices Act (FCPA) of 1977, arguing that it hindered American companies from competing fairly on the global stage. This decision raises a crucial question: when does national interest justify compromising ethical responsibility and international standards?
The fact sheet released by the White House stated that ”U.S. companies are harmed by FCPA overenforcement because they are prohibited from engaging in practices common among international competitors, creating an uneven playing field. Strategic advantages in critical minerals, deep-water ports, and other key infrastructure or assets around the world are critical to American national security”.
Foreign Corruption Regulations and Resource-Rich African Countries
Corruption is a significant challenge in many developing nations, leading to the implementation of regulations by developed countries to combat corrupt business practices. Among these, the U.S. Foreign Corrupt Practices Act (FCPA) stands out as one of the most prominent and rigorously enforced laws.
The FCPA has been an essential tool in the global fight against bribery and corruption, setting a high standard for corporate accountability. It has inspired other nations to adopt similar laws, reinforcing international anti-corruption efforts. For developing countries, especially in Africa—where institutional weaknesses and a lack of strong political leadership often hinder effective enforcement—the FCPA acts as an external safeguard against corporate misconduct. By holding multinational companies accountable for bribery, it helps deter corrupt business practices in regions with weaker regulatory frameworks.
However, a weakening of FCPA enforcement could embolden companies to engage in corrupt dealings, undermining global anti-corruption progress. Such a rollback could also disrupt international cooperation and complicate financial crime investigations. Arguably, with any reduced extraterritorial enforcement, both U.S. and non-U.S. companies might more freely engage in bribery, exacerbating corruption in African countries where institutional checks and balances are already fragile.
Corruption is central to Africa’s “resource curse,” where the continent’s abundant natural wealth—such as oil, diamonds, and minerals—fails to drive sustainable economic development. Instead, foreign companies’ competition for these valuable resources often fuels bribery, political instability, and weak governance, perpetuating the cycle of corruption and underdevelopment.
The 2024 Corruption Perceptions Index (CPI) underscores this trend, with countries like South Sudan, the Central African Republic (CAR), and Sudan seeing a decline in their scores due to ongoing instability, political conflict, and weak institutions. Foreign corruption in natural resource extraction is a major contributor to political unrest in these regions, slowing economic growth, destabilizing democracies, driving environmental destruction, and exacerbating widespread human rights abuses.
For example, DR Congo’s mineral wealth—including cobalt, gold, and coltan—has fuelled armed conflicts involving rebel groups and foreign interests. Similarly, Sudan’s oil fields played a major role in its civil war, ultimately leading to the country’s split with South Sudan in 2011. Natural resources have been key drivers of civil wars and insurgencies across Africa.
Quantifying the extent of foreign corruption can be challenging, as it often occurs in secret, and there are no precise figures available to accurately measure its scope and impact. However, the 2023 Global Financial Integrity Report estimates that Africa has lost over $1 trillion in illicit financial flows from resource-rich African countries over the last 50 years, largely due to corruption and mismanagement in the extractive sector.
The Role of Foreign Corruption Regulations in Promoting Development
A 2020 research study by Chicago Booth University, Reversing the Resource Curse: Foreign Corruption Regulation and Economic Development, found that U.S. firms—or companies with U.S. beneficial ownership—subject to foreign corruption regulations, often contribute to greater development in extraction areas where they operate. These firms are more likely to engage in activities that benefit local communities, promoting infrastructure, social programs, and economic growth. The study also revealed that U.S.-affiliated firms tend to exercise greater caution in their dealings in extraction operations, largely due to the compliance requirements of the FCPA, reinforcing the role of strong anti-corruption policies in fostering sustainable development. This suggests that foreign corruption regulations, such as the FCPA, can be a powerful tool in influencing corporate behaviour, ensuring businesses operate with greater accountability and responsibility in developing countries.
While a temporary pause in enforcement does not equate to abandoning it, Trump’s nationalist policies threaten to weaken compliance efforts and signal complacency to wrongdoers, especially in resource-rich African nations. The Attorney General must ensure that any new FCPA guidance upholds rigorous ethical standards, strengthens trust in international relations, and establishes clear expectations for businesses. Robust enforcement is essential not only to fostering transparency and accountability but also to deterring bribery and corruption in global markets, particularly in countries where natural resources are vulnerable to exploitation.
The Way Forward: Tackling Home-Grown Corruption in Africa
The 2024 Corruption Perceptions Index (CPI) report highlights persistent challenges across Africa, with a regional average score of 32 out of 100, showing widespread corruption. Notably, 44 out of 49 countries assessed scored below 50. This reflects a complex combination of factors that make eradicating corruption difficult. In many African countries, high-level corruption thrives as political elites collaborate with multinational corporations to secure business contracts while maintaining control over the enforcement of anti-corruption laws, creating a significant conflict of interest.
The Need for Genuine Patriotic Leadership: Countries like Rwanda have demonstrated that effective anti-corruption reforms go beyond policies—they require strong political leadership committed to integrity and change. When leaders prioritize national interests over personal gain, corruption can be reduced, enabling sustainable growth. Africa’s progress hinges on the emergence of such leaders. Without a shift in leadership toward ethical commitment, corruption will continue to undermine development.
Building a Culture of Integrity: Effective anti-corruption efforts also depend on the willingness of individuals at all levels to uphold ethical standards, follow the law, and resist the temptation to engage in corrupt practices. Creating a culture of integrity—where personal responsibility and accountability are prioritized—is just as important as implementing strong systems and frameworks. Without this cultural shift, even the best systems will struggle to create lasting change.
The Importance of Independent Law Enforcement: Additionally, African governments must ensure law enforcement agencies, including the police and judiciary, operate without political interference. Political influence often undermines their independence, especially when key positions—like the National Commissioner of Police—are appointed by the president, creating conflicts of interest. Until law enforcement can function independently, efforts to combat corruption will face significant barriers. The need for autonomy, accountability, and integrity in both policing and the judicial systems is more urgent than ever.
Conclusion
The tension between profit and integrity, nationalism and global accountability, has never been more pronounced. If major powers begin weakening anti-corruption laws in the name of competitiveness, it raises crucial concerns about the future of ethical business practices worldwide. What impact will this have on developing nations, particularly resource-rich African countries, where corruption already hampers economic growth and governance? Striking a balance between economic competitiveness and ethical responsibility is essential for fostering transparent, fair, and sustainable global business practices. Without strong anti-corruption enforcement, the cycle of exploitation, instability, and inequality will deepen, leaving developing nations to bear the greatest burden.
Reference
- https://www.transparency.org/en/publications/corruption-perceptions-index-2024
- Christensen, Hans B., Mark Maffett, and Thomas Rauter. Reversing the Resource Curse: Foreign Corruption Regulation and Economic Development. University of Chicago Booth School of Business, Stigler Center for the Study of the Economy and the State, Working Paper Series No. 304, October 2020, p 3-5.
