African governments

The capacity and corruption problem in African governments

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This article first appeared in my weekly column with the Business Daily on March 24, 2019

As African publics become more educated about their governments, how they are supposed to function and the services that ought to be rendered to them, a sense of dissatisfaction is clear. In some cases the issue is more about the quality of service/action taken by government with the feeling that it could have been done better. In other cases, the issue is corruption where funds intended for certain projects and services are stolen, leaving millions with inadequate facilities, care and services from government. Thus there are two core challenges most African governments face when delivering on their mandate and responsibility: capacity and corruption.

The African Union released the Africa Capacity Report 2019 which focused on the role of capacity building in creating transformative leadership in Africa. With regards to government, the report points out that there is a clear need for increased investment in leadership capacity development at all levels and that special attention ought to be paid to strengthening the capacity of accountability and compliance entities, such as ombudspersons and anti-corruption and audit units of African governments. In many cases, the inability of African governments to deliver on their mandates has to do with a lack of technical and leadership capacity. Even in cases where leadership capacity is present, translating clear strategy into action is compromised by the lack of capacity at the grassroots levels. Civil servants charged with delivering on government mandates on the ground are often not well supported in terms of the number of people assigned to the task, inadequate financing of their tasks, as well as a lack of support in updating their own skills and abilities.

(source: https://sokodirectory.com/2017/02/eacc-work-business-community-fighting-corruption/)

The second factor is corruption; and while this may be informed by capacity constraints as alluded to in the AU report, often it is not. The problem is usually government officials willingly breaking the law and using the finances and privileges of their office for personal gain. The scale and variants of corruption are staggering. Some government officials blatantly steal public funds, others ask for payments during tendering processes while others roll kickbacks into tenders awarded; the list goes on. What happens at the end of the day from the African public perspective, is that we either overpay for the project/service due to corruption inflating the bill, or we get basically no services at all.

The reality of how these two factors interplay is complex as capacity and corruption problems operate almost on a sliding scale. In some African governments capacity gaps preponderate and compromise the ability of the government to effectively deliver on their mandate. With other African governments corruption is the issue and the moral bankruptcy of some government officials lead them to deliberately negotiate subpar deals for their countries because of the individual kickbacks they have built into the deals they make. And in some cases it’s both, where corrupt government officials take advantage of the lack of capacity in key areas to steal public finances.

At the end of the day, while efforts to address capacity gaps should continue, corruption must be addressed with more vigour. Because you can have the most competent government team in the world, but as long as some African government officials continue to be aggressively corrupt, Africans will continue to be robbed of what is due to them from government.

Anzetse Were is a development economist

The Fallacy of China Debt Trap Diplomacy

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This article first appeared in my weekly column with the Business Daily on October 28, 2018

Last month, the South African Institute of International Affairs published my policy insight on the Chinese Debt Trap. In short, Africa’s growing public debt has sparked a renewed global debate about debt sustainability on the continent. This is largely due to the emergence of China as a major financier of African infrastructure, resulting in a narrative that China is using debt to gain geopolitical leverage by trapping poor countries in unsustainable loans. It essentially argues that African governments are being deliberately lured into debt by the Chinese government through debt trap diplomacy and that China has an ominous plan to mire the continent in debt in order to gain economic and geopolitical control of Africa.

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(source: http://www.leeabbamonte.com/asia/how-china-is-taking-over-the-world.html)

My counter-argument is simple: The debt trap narrative undermines the decision-making power and agency of African governments. Even worse, the debt trap narrative infantalises African governments, painting them as little more than overgrown children who have to be constantly supervised by other powers if there is any hope of them getting anything right.

More seriously, the debt trap narrative is deeply worrying because it is deeply dangerous. Arguing that African governments are being lured or tricked by China actually begins the process of preventing sovereign African governments from being held accountable for the financial commitments made on behalf of the African people. The narrative gives wiggle room for some governments to become intellectually dishonest and say that they did not know what they were getting into as they signed multi-billion dollar deals with China, rather than stand up and be counted. The narrative, in its determination to paint China as the ‘bad guy’, actually begins to absolve African governments of their fiscal responsibility and obligations. It creates space for some African governments to avoid hard questions from their publics about how debt is used, accounted for and whether the debt has led to economic gains and development.

(source: https://www.panafricanvisions.com/2018/op-ed-african-women-even-politics/)

Last week, the Financial Times (FT) took this argument further, pointing out that the heaviest cost for African countries comes from private lenders, not the Chinese. Nearly a third of African governments’ debt is owed to private creditors, but they account for 55 percent of interest payments. By contrast China, is owed about 20 percent of African nations’ external government debt, and receives just 17 percent of interest payments.

And to be honest even if that number were higher and Africa owed China far more, the responsibility for that rests squarely on the shoulders of the Ministries of Finance/ Treasuries of African governments, not China. African governments have demonstrated tremendous appetite for debt and have not only gone to China looking for it, they have floated sovereign bonds and continue to borrow from their traditional partners.

Frankly, the debt trap narrative seems motivated more by frantic Sinophobia than any genuine concern for the economic and fiscal health of African countries. Africans are worried about growing public debt, period. After all, it is the African people alone who will have to pay back all the debt in question. Thus, let the concerns of the African people about the fiscal accountability of their governments take centre stage in the conversation about public debt on the continent.

Anzetse Were is a development   economist, anzetsew@gmail.com