Governance and Development in Africa

Governance and Development in Africa Week 3

Theme objectives • To discuss the concept of governance in Africa • Discuss the following issues • Democratic transitions • Political inclusiveness • Voice and accountability • Economic management • Discuss some major challenges to good governance in Africa

Background • Over the decade and recently, governance has become a key concept in the international development debate and policy discourse. • There has a historical record of bad governance in Africa, • Improving the governance environment has been given a major focal point • New Partnership for Africa’s Development (NEPAD) – • Is an initiative that represents the latest attempt by African leaders

Background…..(2) • This is an effort to steer the African continent on a path of sustainable development, • Which should embrace good governance and success with • consolidation of peace, • security, and • Political stability.

Background…(3) • The capable state deals head on with corruption, which • impedes development and • minimizes the ability of governments to reduce poverty. • The Capable State builds an enabling environment for the private sector • to generate economic growth, • jobs and income. • At the core of this is • political and policy stability and • a fair and consistent application of the rule of law

Key Focal Point for Governance • NEPAD suggest the following keys for sustainable development: • proper adherence to good political, • economic, and • corporate governance.

Introduction • The capable state creates an enabling political and legal environment for economic growth and promotes the equitable distribution of the fruits of growth. • But growth must also be coupled with policies that deliberately attack • poverty • promote education, • health, and • social safety nets. • This requires • sound macro-economic management, • institutional reform, and • investment in human resources development. • Sustained poverty reduction results when growth is equitable. • And the best way to achieve that is by building strong forms of democratic governance at all levels.

Definition of Governance • Definition: • We define Governance as actions that has to do with the manner in which responsibility is discharged. • Such a responsibility may be acquired through • election; • appointment or delegation in the public domain or in the area of commerce - corporate governance. • Therefore, we say that Good governancewould mean a condition whereby such responsibility is satisfied in • an effective, • transparent, and • accountable manner

Good Governance • Good governance entails the existence of efficient and accountable institutions: • Political, • Judicial, • Administrative, • Economic, • Corporate • Rules that will • promote development, • protects human rights, • respects the rule of law, and • ensures that people are free to participate in, and be heard on, decisions that affect their lives.

Good Governance…. • It has been demonstrated that good governance can be positively correlated with the achievement of better growth rates, and • particularly through the building of institutions in support of markets. • Recent empirical analysis suggests a positive correlation between • democratic governance and the levels of income, • investment, • human capital, • economic liberalization, and • distributive income growth in society.

Quotes on Good governance… • Kofi Anan-Former UN Secretary General said: “good governance is perhaps the single most important factor in eradicating poverty and promoting development” • And a former Kenyan Vice-President also noted that “good political and economic governance underpins sustainable development”. • African leaders have recognized the prominent importance of good governance for achieving sustainable development • They have set out principles pertaining to the strengthening of democracy and political governance as well as economic and corporate governance (NEPAD, 2003).

New partnership for African’s Development - NEPAD • Emphasize is placed on • democracy, • respect for human rights, • peace, and • good governance • Principles here is to contribute to the strengthening of the political and administrative framework of African countries • If this is the case, why do we continue to see negation in development and circles of poverty in SSA?

NEPAD framework document • The institutional reforms to strengthen political governance in Africa will need to focus on: • the administrative and civil services; • the strengthening of parliamentary oversight; • the promotion of participatory decision-making; • the adoption of effective measures to combat corruption and embezzlement; and • the undertaking of judicial reforms.

Institution Performance • In post-independence Africa, African leaders themselves are pointing to the shortcomings of the institutional structure over which they preside directly and/or have much say. • Institutions, and public institutions in particular, have been a failure in Africa. • Many of these institutions have been captured by the elite to serve narrow personal interests. • The resultant effect has been the lack of the ability of the state to provide the requisite institutional framework to support good governance.

Institution performance….. • In many African countries, both the public and private sectors do not operate according to widely accepted rules that are transparent and enforced by accountable institutions, Why? • We need to explore this further

Four Positive trends in Africa • Democratic transitions, • Political inclusiveness, • Voice and accountability, • Economic management.

Democratic Transitions in Africa • Significant strides have been made in many African countries, evolving from authoritarian or military regimes to more democratic dispensations. • Where state institutions and processes are gradually being reconstructed to promote the values of good governance. • Indeed, elections have become the only acceptable basis for choosing and alternating leadership.

Democratic Transitions in Africa…(2) • In 2004, Benin, Ghana, Kenya, Madagascar, Senegal, and Zambia, incumbent regimes have all been defeated in multi-party elections. • Last year, in Kenya, Madagascar, Ivory Coast, year before that Zimbabwe, there has been disputed elections which led to formation of multi-party government,

Democratic Transitions in Africa…(3) • Constitutions are being rewritten all over Africa, involving widespread consultation with civil society. • Examples are found in • Kenya, • Nigeria, • Zambia, • Zimbabwe and • Madagascar. • Uganda has also gone through a similar process. • Many African countries are increasingly seeking to ensure that the executive and legislative arms of government reflect the • profile of their people in regional, • ethnic, • racial and • religious terms.

Political inclusiveness • Nigeria has adopted the principle, which is enshrined in the Constitution, • Which will be done to accommodate the country’s diversity in all state appointments. • Now it is more widely accepted in Africa that women’s perspectives are needed at all levels of decision-making • if we are to achieve our sustainable development goals

Political inclusiveness…..Gender • Mozambique, Namibia, South Africa, and Uganda---women occupy over 25% of national parliamentary seats, • The South African cabinet is composed of 30% women. • At the highest level of African governance, half of the Commissioners of the African Union (AU) are women. • Questions for discussion: • In your own opinion, is this a good idea? • What are the benefits of having women involved in politics?

Political inclusiveness… • Governments are monitoring their commitments and improve their policies and programs to better close the ‘gender gap.’ • Countries are making their national accounts and budgets more gender sensitive with a • view to aligning public expenditures with pro-poor--and pro-women--objectives.

Political inclusiveness and the Youth • The youth are still marginalized, • both in terms of formal participation in politics and in influencing public policy in vital areas such as on • HIV/AIDS, • education, and • job creation. • On average around 10 million new entrants come into Africa’s labor market each year • Many of these are young people, the majority in rural areas. • Solutions: • To make agriculture an attractive employment option for our youth, • To equip them educationally to be entrepreneurs, and • To create an environment for micro-enterprise to flourish.

Voice and Accountability • Avenues are being created to allow citizens to participate in the political process and express their demands, without fear of reprisal. • This is making the government more responsive to its constituents. • The process of democratization in Africa has induced • the explosive growth of civil society groups who have emerged to promote and defend various interests.

Political inclusiveness • The media is now widely acknowledged across the continent • to have an important role to play as a public watchdog in exposing corruption and checking abuses of power. • The media has been prominent in defending • human rights and upholding democratic transparency through the effective monitoring of elections. • Increasingly in Africa, governments are also putting into operation mechanisms and processes to check Executive power. • For example significant initiatives, are the creations of watchdog agencies like • the Ombudsman and • Inspector or Minister of Governance in some African countries

Corruption in Africa • Other countries have established independent Auditor-General offices, • charged with enforcing leadership codes of conduct, • investigating decisions that might involve fraud, and • generally promoting good governance in the country. • But there are efforts on the ground to deal effectively with these critical challenges to good governance. • As an example, several governments have established Anti-corruption commissions- ACC.

Corruption in Africa….(2) • Corruption flourishes in Africa because most of the regulatory institutions are • still weak, • lack autonomy, or • are shady themselves. • Many people deem watchdog institutions to be totally controlled by the Executive branch. • People believe that, ‘‘big money’’ corruption flourishes in Africa due to deals struck in Paris, DC, or in Houston, London, Brussels or Zurich, How trues is this statement? • It is believed that these deals enrich • a few Africans and their western partners, • but cheat millions of Africans out of the fruits of the continent’s resources, and particularly its oil.

Better Economic Governance • This focuses on public financial management and accountability • Statistics shows that more countries are running smaller deficits, meeting their targets for: • revenue mobilization, • managing their tax systems more effectively, • improving fiscal transparency, and • creating institutions and arrangements for better auditing of public funds.

Better Economic governance…(2) • On public expenditures, • governments have declared a war on poverty and put policies in place, • but tangible results have still eluded them. • Insufficient resource allocation, • poor targeting, • inefficiencies in program implementation, and • lack of fiscal transparency are to blame. • Most African countries are channeling a greater proportion of their GDP to social services as compared to the military.

Policy Performance Stance • The Expanded Policy Stance Index, featured in Annual Economic Report on Africa measures • policy performance in macroeconomics, • poverty reduction, and • institution building • The five worst performers according to these indices were either; • in conflict, or recovering from recent conflict, and • consumed by considerable debt and • political tensions

Policy performance Stance….(2) • The top performers, are well-managed with solid reform agendas and a record of political stability and good governance. • The top five: • Botswana, • South Africa, • Mauritius, • Namibia, and • Tunisia • These countries have maintained sound economic fundamentals with • lower foreign debt, • Lower budget deficits, • inflation, and • interest rates.

Top performers… • These are countries that have • healthier institutions of policy analysis and coordination and • more competent civil services. • Pro-poor policies and targeting are more effective. • And laws and regulations are more predictable and transparent and applied more uniformly.

Corporate governance in Africa • African countries recognizes the need to promote the development of the private sector. • They accept that the public sector alone is unlikely to mobilize the resources required for economic development, • They know that foreign direct investments (FDIs) will play a decisive role in this process • Measures taken by African countries in this area are; • granting tax and other incentives, • creating institutions to facilitate the establishment and operation of businesses.

Corporate governance in Africa….(2) • Targeting the informal sector so that it can become part of the formal sector, • Expanding and improving infrastructure facilities • We should take note that, despite these measures and an increase in the conviction of governments, • The overall environment is still not yet conducive enough to attract foreign investment, Why? • The procedures and costs of starting and operating businesses are still cumbersome and costly

Corporate governance in Africa…(3) • World Bank study in 2006, • Mentioned that it takes an average of about 4 days to satisfy the regulatory requirements to start a business in North America, • While in Africa it takes about nearly 70 days, or 17 times as long. • Is this a good thing? • Investment flows to Africa, especially foreign direct investment, lag behind investments in other regions of the developing world, because of the red tape (bureaucracies)! • People going through all the paper works, trying to identify loopholes for siphoning funds! • The continent attracts less than 1% of global capital flows and accounts for less than 1% of world trade – tiny value! • For interest sake, the stock of capital flight from Sub-Saharan Africa is estimated at $148 billion or 90 percent of the combined GDP.

Blueprint for Capital Flows to Africa • The focal point should be on: • Trade liberalization, • Capacity building, • Debt, • Development assistance, • Privatization, and • Infrastructure development • The US through USAID’s AGOA plan and OECD continue to push for improvement in Africa’s economic conditions and the climate for private sector investment.

Way forward • In order to continue with the reform process, • governments and citizens have to believe that it is worthwhile and yields benefits. • Without tangible results, the citizenry is likely to be frustrated, resentful and ‘‘fatigued’’ by so-called democracy. • We saw and witnessed the regime change in North Africa • Whether it is in the process of going to court, • paying a bill, • opening a business, • interacting with a Member of Parliament, • or casting a vote, • People want to see improvements in efficiency, transparency, and accountability. • There is now a strong popular perception in Africa that upgrades in the delivery of • the basics of education, • health, sanitation, • housing, • electricity, and • water • They are seen as the major dividends of democracy and good governance.

Way forward….(2) • The capacity and autonomy of local governments, therefore, has to be given due consideration in the governance agenda of African countries, • because they are nearest to the rural communities where over 73% - 80% of Africa’s population lives. • Decentralized structure, community interests can be far better fielded. • Here we should note that, Capacity building is about identifying concrete gaps in the institutions and organizations that work together • to promote better outcomes, and providing the necessary policy and resources for enhancement. • Identifying deficits at all levels of government will be critical to getting the results that the African people are hoping for.

Way forward…(3) • The revitalized Commission of the African Union (AU), and its priority of regional integration is vital in that regard. • It provides a viable framework for • addressing the challenges of growing African economies, • protecting the environment, • utilizing our natural resources, • fighting disease, and • resolving conflict. • Furthermore, • the New Partnership for Africa’s Development (NEPAD), • the AU, and • the prospect of a Pan-African Parliament should continue to offer new promise on better governance. • The African Union’s conflict resolution efforts in several places including Burundi, the Democratic Republic of Congo, and Liberia. • Regional economic communities (RECs) have begun to create formal institutional frameworks for peacekeeping - SADC in Zimbabwe, DR Congo.

Challenges for Africa • Collapsed states • Overburdened States • Nurturing Democracy • Gender equity • Alleviation of Poverty • Management of financial and natural resources • Ownership of governance reforms • HIV/AIDS

Challenge for Africa • The implementation of the policies needed to meet the MDGs. • WTO issues on market access • How can a cotton farmer from Burkina Faso compete on the world market in the face of huge US cotton subsidies? • Battle against the HIV/AIDS pandemic

Any observations or Questions • How is good governance in the U.S?

Reflection questions: 126 points • In your own words, how would you define good governance?[5 point] • What does NEPAD stands for?[5 points] • What do you understand by term “Capable States”?[5 points] • What are the tow most important aspects to consider when building an enabling environment for private sector to create jobs? [10 points] • There is a positive correlation between good governance and investment, human capital. True or false. [5 points] • List four focal points for NEPAD. [8 points] • List five things that NEPAD Framework document focuses on in Africa. [10 points] • Name the four major positive trends in Africa? [8 points] • Explain what you understand by the concept of democratic transitions? [5 points] • Give example of countries in which constitutions have been rewritten, and give reason why this was done? [10 points] • What you do understand by the following terms • Political inclusiveness? [5 points] • Voice and accountability? [5 points] • What would you suggest are the major causes of corruption in Africa? [5 points] • What measures are some countries in Africa putting in place to combat corruption? [5 points] • What are the major facets for better economic governance in Africa? [10 points] • What are measures suggested by African governments to lure FDIs? [5 points] • What are blueprint for capital flow in Africa? [10 points] • What are the major challenges for good governance in Africa? [10 points]

Governance and Development in Africa