Nepad, Peer Review & SADC: Opportunities for Reform

1. Nepad, Peer Review & SADC: Opportunities for Reform Ayesha Kajee Researcher/Seminar Manager Nepad & Governance Project

2. The SAIIA Nepad Project • Three year Nepad Research Project • eAfrica Journal • African Network Interested in Nepad • Civil Society Database • Research and Conferences in Support of Reform

3. What is Nepad? • Framework • Philosophy • New way of dealing with the world • An organisation • A programme • Projects

4. ??? ??? Lusaka NAI Lome OMEGA Sirte Summit MAP African Union NEPAD

5. NEPAD Contents 4 Initiatives: • Peace & Security, Democracy and Governance • Economic and Corporate Governance • Capital Flows • Market Access 6 Sectoral Priorities: • Bridging the Infrastructure Gap • Human Resource Development • Agriculture • Environment • Culture • Science and Technology Platforms

6. NEPAD: A Simpler Definition • NEPAD Is FIVE Things: 1) Joint Negotiations/Pressure on the World 2) Re-organising Continental Institutions 3) Driving Regional Projects 4) Learning How to Solve African Problems 5) Managing Delivery • At THREE Levels: • Continental, Regional, and National

7. Why the Definition Matters • 2 views of Nepad: All Bad /All Good • Opens space for public conversation • What is working • What is not working and why • It would be nice if the world were more fair and Africa had more resources, but how can we do better with what we have

8. The Simplest Definition Nepad = Reform Reform = Changing How Africa Does Business at Every Level

9. Hope and Caution • Progress in individual African countries • In 2002, 14 African countries experienced > 5% growth BUT • it will take Sub-Saharan Africa • until 2129 to achieve universal primary education, • until 2147 to halve extreme poverty and • until 2165 to cut child mortality by two-thirds • Economies have not grown • 1/2 Africans live in extreme poverty • 1/3 live in hunger, and • 1/6 of children die before age 5 – the same as about 10 years ago Sources: World Bank and UNDP HDR

10. 1969 1974 1979 1984 1989 1994 1964 Where did aid to Zambia go? 20 $1200 Aid $1100 15 $1000 $900 10 Income to Average Zambian Aid to Zambia as percent of GDP $800 5 $700 Income $600 0 Notes: Sources for Aid (Overseas Development Finance) data: World Bank and OECD. Sources for Per capita income -Summers Heston. Data are five year moving averages ending at date shown

12. Theory and Reality • Peer Review is where Nepad theory becomes real at national level • Its existence is changing governments • Will test the sincerity of AU and national rhetoric

13. The AU Context • Credibility issue • Recognition that cannot afford another failed state • Chronic under funding at OAU, now much larger, more activist agenda • Tension between pro-reform and retrograde states • Peer review is awkward compromise

14. Peer Review Mechanism • Non-Political Think Tank-type • Evaluate both Economic and Political • Share/Advise on Best Practice • 3-5 Year Cycle, 6-9 Months per Review • Ad Hoc Intervention Between Reviews

15. APR Structures • Expert Review, Peer Intervention • APR Forum = Heads of Participating States • Panel of Eminent Persons • APR Secretariat: • 20 staff, 2-3 researchers per subject • Relies on partner institutions/AU

16. Five Stages of Peer Review • A) Country Establishes • APR Focal Point • Prepares National Action Plan • Completes Self-Assessment Questionnaire B) APR Secretariat Prepares • Background Document • Big Issues Document (Use Partner Orgs) • Country Review Team Visit • Review Team Drafts Report, Shares with Govt • Panel of Eminent Persons Reviews Report, Makes Recommendations to APR Forum (heads of state) • Final Report made public

17. APR Secretariat Government National Focal Point Eminent Persons Civil Society Panel Peer Review Structures

18. Potential Intervention Points for Parliamentarians and Regional Bodies APR Secy arranges Technical Assess-ments on big issues. Reports to APR Secy and country. APR Secretariat: Background Paper C o u n t r y V I s I t APR Secy Develops Big Issues Paper Issues paper may identify issues requiring more in-depth analysis thru Technical Assessments Country APR Focal Point Country self-assesses-ment Country drafts Programme of Action (POA) The Planned Process APR Secretariat: Background Paper APR Secy arranges Technical Assess-ments on big issues. Reports to APR Secy and country. APR Secy updates issues paper based on tech assessments C o u n t r y V I s I t C o u n t r y R e p o r t E M I N E N T P E R S O N S A P R F O R U M APR Secy Develops Big Issues Paper Issues paper may identify issues requiring more in-depth analysis thru Technical Assessments Prelim APR Visit & questionnaire to Participating Countries Country APR Focal Point Country submits to APR Secy Country self-assesses-ment Country submits Final POA adjusted based on CRV Country drafts Programme of Action (POA) Country updates POA if needed

19. Key Questions • Questionnaire focuses on what law says not what actually happens • Corruption is not an accident • Can we build new model of politics? • The risk to Africa’s reputation

20. Tensions Within APRM? • Can One Process Handle Both Reformists and Retrogrades? • How to Conduct Review? • Compliance vs Offering Best-Practice Advice • Questionnaire vs Expert-Based • Too Little Time, Too Few APR Staff

21. Aspects of NEPAD & APRM Source: Hansohm, 2003

22. Doing Business in Africa- The Corruption Conundrum • Every study consulted in this report, as well as eAfrica’s own research, concluded that corruption is one of the top issues holding Africa back. • Across Africa, 52% of business organisations told eAfrica that it would be necessary to pay bribes to open a business, with 1 in 7 reporting that bribes would have to be paid more than twice. • In African Elite Perspectives on AU and Nepad, respondents in all countries except Senegal said fighting corruption should be a top-three AU goal (Senegal ranked it fourth) behind encouraging trade. • The World Economic Forum noted that ‘the enterprises from developing and transition economies included in this year’s survey single out corruption and excessive bureaucracy among the top constraints to their business operations, while respondent firms from the OECD single out excessive bureaucracy and the tax regime.

23. Doing Business in Africa • Doing Business in 2004, the most detailed examination of government institutions affecting business, found many small, but easily fixable problems contribute greatly to economic stagnation. Take courts, for example. The ability to swiftly and fairly settle commercial disputes is missing in much of Africa, which not only allows white-collar crime to go unpunished but also scares off foreign investors who fear that if a dispute arises there will be no way to enforce business contracts. • Infrastructure is expensive, but failure to maintain it costs far more. Maintenance has routinely been a condition of aid grants and loans, but African leaders have tended to ignore it, favouring current consumption over the care for current assets. We have to ask why. As far back as 1994, the World Bank observed that the ‘timely maintenance of $12 billion would have saved road reconstruction costs of $45 billion in Africa in the past decade.’

24. Africa’s Top Priorities: What The Surveys Say Commonwealth Business Environment Survey 2003: ‘The top 3 barriers to investment: corruption; policy instability; and inadequate infrastructure.’ World Bank Doing Business in 2004: ‘Heavier regulation is generally associated with more inefficiency in public institutions – longer delays, corruption, less productivity and investment. • World Economic Forum Global Competitiveness Report 2004: Quality of public institutions, the macroeconomic environment and technology are the key ingredients of national competitiveness. • UNIDO Foreign Direct Investor Perceptions in Sub-Saharan Africa 2003: ‘Political stability and economic stability were most important to foreign investors, followed by country legal framework, investment-climate transparency, quality of infrastructure, low labour costs and skilled labour availability.’ • African Elite Perspectives survey 2003: Elites in seven African countries were asked to rank the top obstacles to Africa. All included political instability and corruption among their top three obstacles. Zimbabwe, the one exception, put political instability, poverty and debt as the top issues.

25. Getting Africa Growing: A Priority List • Fight corruption at all levels • Reform legal institutions • Safeguard ownership • Improve The Business Environment • Adopt Africa-wide deficit-reduction targets • Remove trade bottlenecks • Build one-stop investment centres • Eliminate restrictions on the movement of skilled labour • Reform education • Emphasise Infrastructure • Accelerate privatisation or management concessions • Prioritise maintenance

26. SAIIA Resources • eAfrica: www.wits.ac.za/saiia/online • Mailing List • APRM Toolkit: www.wits.ac.za/saiia/toolkit • What the Standards Say: Constitutional Structures, Political Systems, Rights, Good Governance • Draft APR Questionnaire

27. The South African Institute of International Affairs