A cure for corruption? The scourge of Africa's kleptocrats

Mohammed Ibrahim built a fortune out of mobile phones. And now he wants to give millions of it away to encourage leaders to honour their democratic promises. Kim Sengupta reports

The reception at the Mandarin Oriental Hotel in London last night, with its mixture of politicians and businessmen, was opulent enough to have satisfied the king or emperor of a central African state.

The host was indeed one of the richest men in Africa. But Mohammed Ibrahim earned his vast fortune, by building up a telecoms empire. And now, he says, he wants to spend some of that wealth to try to eradicate the continent's endemic problem of corruption.

The names behind the Mo Ibrahim Foundation, an impressive list mostly gathered through Dr Ibrahim's personal contacts, include Nelson Mandela, Tony Blair, Bill Clinton, former Irish president Mary Robinson, Paul Wolfowitz (in his capacity as president of the World Bank rather than his former role as the Pentagon superhawk) and Amartya Sen, the Nobel Prize-winning economist.

Yet the man with such extensive contacts behind this hugely ambitious plan - to change the face of the body politic through swaths of a continent - had been anything but high profile. He has made regular appearances in The Sunday Times Rich List, and the deal to sell his pan-African mobile telephone company, Celtel, to MTC Kuwait for $3.4bn (£1.8bn) last year made a few businesses pages, but not an awful lot more. Only now, with the launch of his award, has the 58-year-old businessman begun to appear, shyly, in the limelight.

Dr Ibrahim is offering African leaders a highly lucrative reward of $5m, with $200,000 thereafter, if they desist from theft, try to improve conditions in their country and actually step down when the electorate tell them to do so through the ballot box. The sums make it the world's richest prize, dwarfing the $1.3m of the Nobel Peace Prize.

The son of a Sudanese cotton trader who grew up in Cairo, he now holds British nationality and describes himself as a former Marxist. He declares he would never have put himself under scrutiny if he had any fears of skeletons rattling out of the cupboard. Dr Ibrahim eschews the trappings of corporate success. His office is at a smart Mayfair address, but the interior is spartan. There is no expensive impressionist art on the walls, and the furniture is functional, wooden chairs and metal desks.

The plump, bespectacled figure, chomping on a pipe and given to excited exclamations, says: "I have not got a yacht, I don't even have a small boat. I don't even have a toy boat in my bathtub. I don't have a biplane. I don't have anything. Those things are toys and I don't need them to be happy."

He studied engineering at the University of Alexandria then worked for the International Telecommunications Union in Geneva. The path that set him on the way to being a tycoon began one evening on his way to see the film Khartoum, in which Charlton Heston played General Gordon, when he heard the driver using a mobile phone, one of the first he had seen.

"I asked the driver how it works because in a city you cannot maintain a line of sight between the aerial on the car and the transmitter. Of course, it was a naïve question because the driver did not know."

But Dr Ibrahim's appetite had been whetted and he returned to Sudan, joined the state telecoms company then left to do a postgraduate degree in Birmingham. He joined BT as technical director when it launched its Cellnet service.

But soon he left and set up a mobile business for himself, co-founding Mobile Systems International. BT, he felt, was failing to see the big picture and he was also getting fed up being expected to chant the corporate mantra. "The corporate culture really had a lot of fighting, back-stabbing, protecting your little arse and it didn't matter what you said, it was how you said it. Maybe I was a little bit naïve or romantic, but I thought organisations were more efficient and could be more effective than that. BT failed to see the potential of cellular communications. They had a golden opportunity to become the leading cellular company but they failed to grasp it."

Dr Ibrahim and his colleagues were not prepared, as they saw it, to miss the main chance. He decided to venture into Africa, at the time virgin territory for mobile telecommunications, and started the Celtel network.

Seven years later, it had 10 million customers in 14 countries and was becoming the continent's biggest telecom operator. "Nobody invested in sub-Saharan Africa apart from South Africa and I realised just how negative the image of this region was to the world," he says. "Since I am African by origin I was obviously well aware of the daily difficulties faced in Africa. But I felt the risks were greatly exaggerated; there was an enormous gap between perception and reality.

"The need of individuals to communicate with each other is the same in Africa as anywhere else, but Africans felt frustrated due to the lack of available landlines. We were the first to bet that cellular telephony would fill this void." The Western scepticism towards African investment was also dissipating. In 1997, an US investor paid £36m for a 20 per cent stake. Three years later, MSI sold to Marconi for £570m, making Dr Ibrahim £70m. A third of the stock went to the company's employees.

Then the sale of Celtel to MTC for £1.8bn put the value of Dr Ibrahim's stake at £363m. The group's 3,000 African employees will also benefit from the share deal, sharing £10m. "It was inclusive capitalism and I think it was the best way," he says.

Dr Ibrahim's plan to reward African leaders not to be dishonest has led to criticism from some quarters. Selim Nasruddin, a black British academic who is researching corruption in the Third World, believes the plan can be seen as patronising.

"What you are effectively saying is the only way to keep African leaders on the straight and narrow is to bribe them, that their main motivating factor is money rather than a sense of civic duty. Would such a prize be offered elsewhere?"

Teddy Brett, senior visiting fellow in developing studies at the London School of Economics, agrees. "This is a rather patronising exercise. Would we feel the same way to have a competition to see which European leader is the least corrupt?" Mr Brett also believes the sum Dr Ibrahim offers is too little."The problem is the corruption of top levels of the ruling class. Giving $5m to the least corrupt of them is not going to improve it much."

The scale of the problem was illustrated only yesterday, when Teodorin Nguema Obiang, the 37-year-old son and likely successor to President Teodoro Obiang Nguema Mbasogo of Equatorial Guinea said in an affidavit to a South African court that companies owned by ministers often bid for government contracts and receive "a percentage of the total contract the company gets. This means that a cabinet minister ends up with a sizeable part of the contract price in his bank account".

Dr Ibrahim is at pains to point out he is not being patronising towards his fellow Africans. Instead, he says, he wants to highlight how corruption on the continent is rooted in a lack of civic institutions, the result of arbitrary drawing of borders by colonial authorities ignoring local historical and cultural ties.

He is keen to stress that men rising to the top in such a system feel a great need to cling on to power. Departing Western leaders such as Tony Blair can look forward to making millions from the lecture circuit and board rooms.

"But our guys have no life after office," says Dr Ibrahim. "Suddenly, all the mansions, cars, food, wine, is withdrawn. Some find it difficult to rent a house in the capital. That incites corruption: it incites people to cling to power. The prize will offer essentially good people who may be wavering, the chance to opt for the good life after office."

Dr Ibrahim is also setting up a Kuwaiti-Sudanese holding company with one of the main shareholders of MTC to invest in Africa and particularly Sudan which is racked by violence in Darfur and instability in the south. He reckons conditions are still conducive to investment. "I tell them there is a trillion dollars sitting [in the Gulf] earning next to nothing," he says. Across the Red Sea, there are huge opportunities in agriculture, real estate, energy, mining."

The answer to Africa's problems, he believes, lies with the private sector rather than dependence on Western aid. "It's great that Africa is on the agenda and Blair and Brown are interested. But I am resigned to doing my own little things in my own little way.

"I really don't have any heroes in business. I never look up to business people. I come from a background where people like Albert Einstein have been my heroes, or people like Mandela or Gandhi, people who did political things for their countries. I don't think that we, as business people, deserve to be anybody's heroes."

In the running for the money

Benjamin Mkapa Tanzania

One of a small number of African leaders who stood down at the end of his term. He made painful reforms after election in 1995 and was the driving force behind Tanzania's economic liberalisation.

President Olusegun Obasanjo Nigeria

Former military ruler who, after election, oversaw anti-corruption clean-up, and agreed to go quietly when it became apparent a third term in 2007 was not a good idea.

Prime Minister Luisa Dias Diogo Mozambique

PM and Finance Minister of Mozambique since 2004. An economist of formidable rectitude, and first female PM of the country.

President Amadou Toure Mali

Although he led a coup to take power in the west African country, he established democracy and was elected President in 2002. Formed a politically inclusive government which is tackling development problems.

President Ellen Johnson-Sirleaf Sierra Leone

Doing well in her first year of office by tackling corruption, faced with issue of reconciliation after civil war.

President Yoweri Museveni Uganda

Started as the darling of the West as economy grew and praised for dealing with Aids epidemic, but his reputation was tarnished with attempts to continue to stifle democracy to stay in office.

President Meles Zenawi Ethiopia

Former rebel who dismantled the centralised state of dictator Mengistu and is on his third five-year term. Another darling of the West whose democratic credentials were undercut by the crackdown against protesters alleging fraud in parliamentary elections in May 2005.

President Patrick Mwanawasa Zambia

As President since 2002, he introduced free primary education and health clinics in rural areas. Benefited from G8 debt cancellation after pushing through economic reforms and fighting corruption. But accused of persecuting political rivals.

President Thabo Mbeki South Africa

Inherited mantle of Nelson Mandela but blotted copybook with failure to deal effectively with Aids which has infected one in 10 South Africans.

Abdoulaye Wade Senegal

At 80, the oldest living President in the world. After a promising beginning after his election in 2000, his reputation has been tainted by the jailing of his opponents - including a former prime minister seen as a rival - and of Senegalese journalists.