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21 November 2013

How to fight corruption with $5m in cash

Is it possible to build a fortune cleanly in African telecoms?

By Sophie McBain

Mo Ibrahim describes himself as an “accidental businessman” but in 2005 he sold his African mobile phone company, Celtel, for $3.4bn. Ibrahim pocketed $1.4bn and set up the Mo Ibrahim Foundation to campaign for better governance across Africa. Since 2007 he has funded the world’s largest cash prize, worth $5m, which is awarded every year to an African leader who has led inspiringly and stepped down voluntarily. For two years, the prize committee has been unable to find a leader worthy of the award.

I meet Ibrahim in his offices in Marble Arch, central London, where framed photographs seem to cover every flat surface. A few are family portraits but most of the faces are familiar – on the table next to me is Ibrahim shaking Barack Obama’s hand, with the handwritten message: “Thank you for your good work.” Mo Ibrahim was born in Sudan in 1946 but grew up in Egypt. His father was a “modest man, who didn’t have beyond elementary education” and his parents wanted him to take up a career in government or academia, “middle-class respectability in our kind of society”. He worked first at the post office in Sudan’s capital, Khartoum, before moving to the UK to study. Business was never part of his plan, but in 1983, when he was teaching at Birmingham University, he was poached by British Telecom.

Working for BT was a turning point, because it “was a great lesson in how to screw up a business”. Fed up with the firm’s bureaucracy and its slowness to understand the potential of mobile phones, he left BT in 1989, to set up an independent consultancy and then, in 1998, founding Celtel.

Is it possible to build a fortune cleanly in African telecoms? Ibrahim, who often repeats the phrase that “behind every corrupt politician are 10-20 corrupt businessmen”, says Celtel was able to expand to 14 countries without paying bribes by instituting a rule that payments over $30,000 had to be signed off by the board. This offered protection to local chief executives when they came under pressure from national governments. “In the final analysis, finding a way to do clean business and not to pay bribes actually improves your bottom line,” he says.

The usually gregarious businessman is unable to hide his irritation when I outline common criticisms of the Ibrahim prize. Some argue it is needlessly large, others say it is pointlessly small: for the average kleptocrat, $5m is loose change. “People rush into these statements without reading what we’re doing,” he replies, energised with indignation. “This prize is not for corrupt people . . . this prize is intended for good people, who – prize or no prize – are good people.” He says the money is meant to enable winners to devote their retirement to charitable causes, rather than being a reward for not stealing in office.

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Ibrahim also hopes the prize will shift perceptions. “The problem we have in Africa is an image problem. Everybody in Europe and the US, they know about our few corrupt leaders, even if they died 50 years ago,” he says. How would I feel, he asks me, if the only European leaders he could name were Hitler, Mussolini and Milosevic? “You would be insulted!”

Despite Ibrahim’s impressive address book, his award doesn’t (yet) have the same profile as the Nobel Peace Prize. Nor are its previous winners – Joaquim Chissano of Mozambique (2007), Festus Mogae of Botswana (2008) and Pedro Pires of Cape Verde (2011) – well known in the west. But if Ibrahim is hoping that the continent’s rising economic and political elite will start taking responsibility for poor governance and high poverty, it cannot be denied that he is setting a powerful personal example.