Tag: governance

Time to Give African Judges Some Teeth

“A court is the guardian of justice, the cornerstone of a democratic system based on the rule of law. If the state does not abide by court orders, the democratic edifice will crumble stone-by-stone until it collapses, and chaos ensues”- Dunstan Mlambo – Judge President of the Gauteng Division of the High Court of South Africa.

African governments have a bad habit, when it is not in their interest they ignore the law, specifically they ignore the courts. Governance and the rule of law is well recognised as a crucial component of development, the African Union even has the African Charter on Democracy, Elections and Governance. One of its core objectives is to ‘Promote and enhance adherence to the principle of the rule of law premised upon the respect for, and the supremacy of, the Constitution and constitutional order in the political arrangements of the State Parties’. Although tellingly only 10 African states have actually ratified this particular charter, symbolising African governments commitment, or lack of, to the rule of law.

The rule of law is crucial, it is the foundation upon which stable societies are based. When it works it is how criminals are punished and injustice is rectified. It provides for trust in contracts so that people can do business with each other and it keeps power in check, restraining government from abusing its citizens. The primary arbiter of law and order is the judicial process, the courts not only need to be independent, but their orders and rulings need to be adhered to, if not they may as well not make them.

When governments ignore court orders, they send a signal, that the law is not for them that the law is tool to be used to benefit of those with power rather than to protect all.

Development on the continent will require the rule of law that applies equally to all including the government, the problem is the police that courts rely on to enforce their orders are controlled by the government. To enforce the rule of law, courts in Africa will require more than the hope that government will respect the independence of the judiciary. Rather Africa should give its judges some teeth, the ability to enforce its orders whether the government likes it or not.

The Rule of Law – Except for the Rulers

‘Rule of law’ is a statement that gets used a great deal, African presidents, civil society, global institutions and development economists are all fond of using it and outlining its importance, but what does it mean?

The Secretary General of the UN has defined rule of law as “a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards”[1]

Its importance to development is crucial because it covers several areas. Preventing and mitigating crime and insecurity, protecting the environment, labour, property, creating a trustworthy commercial environment with security of contracts and protection from fraud, protecting human rights, reducing corruption and holding power accountable all rely on the rule of law. Without a system where everyone is treated equally by fair and independent adjudicators, they become arbitrary, those in power exercise impunity, doing business becomes an exercise in avoiding getting screwed (or screwing over the other guy first) and people’s rights, property and persons are under constant threat. Unfortunately, across much of Africa the rule of law does not hold as it should, and often it is the government at the forefront.

When governments ignore the law, they send a dangerous signal to the whole country. That the law is a tool of domination for those in power to get what they want and that the law is a mere suggestion rather than a restraint. This creates the flagrant disregard for the law and impunity that enables corruption, criminals and the everyday behaviour (such as disregard for traffic laws) that has become the norm. And it is why often people resort to mob justice rather than trusting the police and courts.

Development is hard under conditions where the powerful exercise impunity and basic security cannot be ensured. Thus, the question becomes where do we begin with restoring law and order? It is not likely that those in power will conform to the rule of law without significant pressure or incentive, it is also not likely that the general populace will suddenly conform to law and order when the police cannot be fully trusted, and those with power and wealth continue to display impunity. Thus, it is to the courts that we must turn and give them the ability to enforce the rule of law, particularly for those with power and wealth.

Enhancing Judicial Power

The courts are the adjudicators of the legal system and when sufficiently independent from the rest of the government they can make fair and reasoned judgements. The last couple of years has seen African judges show that they can hold power to account, and two momentous decisions showcase this.

In 2016 the Constitutional Court of South Africa told the president to ‘pay back the money’[2] for the upgrades to his home in Nkandla, on a continent where presidents have regularly used taxpayer money as their own it was refreshing to see a court put a stop to impunity. In 2017 the Supreme Court of Kenya[3] stunned the continent when it nullified a presidential election because of anomalies and irregularities in the results. Africans are no strangers to rigged and disputed elections to see a court find against a sitting president, say that it would not accept a tainted election and force the holding of a new election was novel and inspiring.

African courts can step up to the challenge if constituted properly as independent and fair. However, they rely on the government for their decisions to be enforced. Presidents and Ministers must respect and obey court orders and then the police must enforce them, unfortunately this is where the system tends to fall apart.

This was graphically shown earlier this year in Kenya when the government flagrantly ignored court orders and shut down TV stations and deported an opposition politician making a mockery of the rule of law.

This sort of thing happens around the continent such as in Nigeria, Uganda and South Africa, and to put a stop it we should give judges the power to enforce their orders and decisions, to do that they will need their own enforcement agency, a judicial police force. This force should be placed under the control of the judiciary alone, with a guaranteed budget, and a narrow but important mandate to serve and enforce court warrants and orders where the police prove incapable or unwilling to do so. Creating this independent judicial force would have three goals.

First, it will be a tangible force behind the authority of an independent judiciary giving it the ability to challenge impunity. Secondly, it bypasses the political control and rationale behind the police which in Africa are usually centralised and controlled by politically appointed ministers, meaning that the police answer to their political masters first rather than the law. Thirdly, it will help restore confidence in the courts and the law, if people see the law being enforced it is a powerful incentive to place their trust in the law and not to break it. It is not a replacement for the police, nor is it a power grab for the courts rather it is a way of strengthening rule of law by enhancing the ability of the adjudicators of the law to make sure that its legal orders are carried out.

Giving Judges Teeth

It may seem like a bit of crazy idea, police that answer to the courts. However, that is a function the police are supposed to serve but typically do not in Africa. The courts have shown that when judges are chosen in an independent, public and multi-stakeholder process they can make fair and independent decisions, but when those decisions are ignored or not enforced it enables impunity and criminality.

If African leaders and policy makers are truly in favour of law and order as they are fond of declaring, then they must take steps to ensure that the decisions of the courts are enforced. A potentially effective solution is to give the courts their own police to enforce those orders, bypassing politically compromised police and giving them the ability to tackle impunity. The laws governing society are the foundation of stability and good governance. Ending impunity and enforcing the rule of law will provide a firm foundation for development, when people trust the law and power is limited by the law it ensures that all can be treated equally in a secure society. The courts are at the core of this, if Africa is serious about law and order it is time to give our judges some teeth with which to enforce it.

[1] https://www.un.org/ruleoflaw/what-is-the-rule-of-law/

[2] http://www.saflii.org/za/cases/ZACC/2016/11.html

[3] http://kenyalaw.org/caselaw/cases/view/140478/

The African leadership problem

The trouble with Nigeria is simply and squarely a failure of leadership. There is nothing basically wrong with Nigerian character. There is nothing wrong with the land, climate, water, air, or anything else. The Nigerian problem is the unwillingness or inability of its leaders to rise to the responsibility, to the challenge of personal example which are the hallmarks of true leadership… We have lost the twentieth century; are bent on seeing that or children also lose the 21st? God forbid – Chinua Achebe

Afriwonk is a policy blog, my broad aim is to stimulate conversation and thinking about new approaches to development policy from an African perspective. I try to stay away from the politics as it can turn readers off or introduce bias, rather I try to approach development policy as a people centred issue. However, the fact remains, no matter how good your policies are, if you have bad or ineffective leadership those policies are useless, and Africa has a leadership problem.

If you look around the continent democracy seems to be receding as more leaders seek to extend their time in office, corruption and poverty seem to be as stubborn as ever, and the challenges of development such as healthcare, education, joblessness continue to grow. These issues are not intractable, I firmly believe there are solutions. However, those solutions require effective leadership, leadership that has a clear vision and agenda and that leadership will only come about if Africans themselves demand it and provide it.

A clear vision and agenda or lack thereof

In my first blog I tried to outline what development means, that for me development is people centred ,aimed at improving the lives and livelihoods of the African people. Yet we rarely hear a clear articulation of what development means from leaders on the continent. African leaders constantly promise development, but what does that mean, when they campaign they have manifesto’s hundreds of pages long but without a clear agenda or sense of priorities they are just empty promises. In South Africa the ANC is struggling to find its voice, due to the fact that while the politics of South Africa may have been transformed its economy has not, and far too many people still live in poverty. Yet, other than empty sloganeering and symbolic votes in parliament the ANC is yet to present a clear articulation of what economic transformation means to them and the agenda they will pursue to achieve it. In Kenya the Jubilee administration campaigned on a manifesto full of goodies in 2013 and just last year after his re-election the president announced a new development agenda the “big four”, but the fact remains that both the original manifesto and new agenda came from consultants who were formulating an agenda to please crowds and win votes. In Ethiopia, the governments idea of state led development has come into conflict with the desires of its people who want more than just impressive GDP growth. Vision is an essential part of good leadership. Not only have we had leaders without principle or a sense of responsibility, they lack vision. There is no clear idea of the country/continent we want, and this is how we plan to get there. Franz Fanon whose work has inspired liberation movements for decades warned that the “gravest threat to Africa’s future is not colonialism but the ‘great appetites’ of post-colonial elites, and their ‘absence of ideology’”. The lack of vision with a clear agenda has and continues to hobble the continent. It means that we have haphazard badly thought out policy that is aimed not at improving the lives of people but rather at enriching a select few at the top or winning an election. It has been part of the problem that has led to the tragic cast of thieves, despots and psychopaths that have undone the hope that independence brought. If Africa is to develop clarity of vision and well-defined agendas are needed from its leaders.

L’etat est tout de nous – the state is all of us

King Louis XIV of France was known to say ‘L’etat c’est Moi’ or ‘I am the State’, it was his way of saying that he was the absolute ruler of France. It is easy to criticise African leaders, the lack of vision, the non-existent agendas, the corruption, ethnic politics etc. but leaders are nothing without the people who follow them. If Africa is to get better leadership, it will not magically appear it must be demanded by the people. Professor Bimpe Aboyade the first woman in sub-Saharan Africa to gain a PhD in English Literature once wrote “Our problem [in Nigeria] is not just that we are unlucky to be saddled with leaders without vision most of the time, but that majority of the citizens have no idea as to what they really want out of governance except the basic necessities like food, drinkable water, shelter and good roads. You therefore have people praising to high heavens corrupt and incompetent leaders for merely patching few kilometers of road”

In many countries we spend the years between elections complaining about our leaders, decrying the corruption and poor service delivery, and yet when it comes to elections we continue to vote for them. Whether it be for ethnic reasons, or religious reasons or some form of as yet undiagnosed electoral masochism among African voters we continue to return these same leaders to office. Africa’s leadership problem starts with its people, if we as a continent want better leadership we must vote for it, to encourage the genuinely gifted and valuable leaders across all walks of African life to run for higher office and back them when they do. Fundamentally we must realise that the state is all of us, we as Africans must have a better idea of what we want as Africans and demand it from our leaders.

 The curse can be lifted

There is an Angolan anecdote, that at creation God blessed Angola with abundant mineral wealth, other nations of the world complained at the favourable disposition towards the  country, in response God told them: wait till you see their leaders. Maybe God should have also added that we should see the people who will follow these leaders.

I do not think Africa is cursed with bad leadership, there are extraordinary leaders around the continent who lead families, churches and mosques, neighbourhoods, villages, businesses, schools etc. and yes even some politicians. If Africa is to find solutions to its problems it will take leaders willing to implement them, there is no government policy that can do that. Africa’s leadership problem will require its people to take responsibility, though that is easier said than done, it is not impossible.

 

Ending the African debt trap: A developmental debt policy framework

“We have been indebted for fifty, sixty years and even more. That means we have been led to compromise our people for fifty years and more.” – Thomas Sankara OAU July 1987

In 2005 developed countries wrote off billions in debt accumulated by Highly Indebted Poor Countries many of those in Africa. Debt relief gave many countries some breathing space from crushing debt and structural adjustment programs that saw public services decimated, and development expenditure minimised. Over a decade later much of the continent is walking into the same trap, accumulating foreign currency denominated debt with very vague ideas of how we are going to pay it back (figure 1)[1].

If we are not careful many African nations will find themselves where they were in the 1990s (some like Ghana already have); cutting spending and services to get IMF bailouts so that they can pay their debts.

As Thomas Sankara alluded to in 1987 this is no way to develop a continent, because in the world of international finance, banks and bondholders do not care about your people, they just want to be paid back on time. When it comes time to pay back this current binge of debt of what African nations are accumulating, just like in the 1980s and 1990s it will be the people who suffer, making the claims of leaders justifying this debt in the name of development a cruel joke.

African governments need to learn how to borrow smartly and use the money prudently. In my view African governments need to develop a framework through which borrowing is assessed; based on a set of principles that benefit Africans rather than burden them. Ending the African debt trap doesn’t mean ending African debt, it means making it work for us.

Debt: Bonds, Loans and Guarantees.

Governments in Africa borrow and accumulate debt in three primary ways. First, by issuing bonds, where investors lend money to the government by buying the bond who in turn promise to pay investors back in full, with regular interest payments[2]. Loans are straight forward, and work in the same way as a bank loan you would get. The main sources of government loans are international banks, multinational institutions like the IMF or World Bank and direct loans from individual states. Guarantees are slightly different, the government does not borrow directly but guarantees the debt of a company, usually a state-owned company, so that if it fails to repay its loans the government has to repay them.

Debt is not inherently a bad thing. It allows you to access funding that you do not otherwise have to invest in growth. For companies, debt is used to fund expansion, new machinery, hire more workers etc., to grow it is revenues. For countries debt can be used to fund investments in the country beyond what is available from tax revenue. It gives government the ability to invest in areas such as infrastructure, education, industrial or agricultural initiatives that give people and wider economy a higher capacity for growth and development. Put simply if you use debt to invest areas that create more value than the value of debt then you are fine, as the debt will pay itself back.

The problem with African debt

Debt becomes a problem when you have trouble paying it back. As your debt load increases you start borrowing money simply to pay for earlier debt, like using a credit card to pay off another credit card. Eventually you are forced to ask for help, going cap in hand to your creditors and asking for a bit more time or to the IMF for a bailout and as Africa discovered in the 80’s and 90’s, when that happens your fate is no longer in your hands.

In Africa bad debt falls into 3 broad categories. The first is corruption and misuse, where money borrowed is not even used in any form of gainful investment but essentially stolen. Mozambique was one of the success stories of the last few years with 7%+ growth rates even as it borrowed heavily (Figure 2).

Investors were not concerned with the debt levels because of Mozambique’s huge gas reserves. In 2013, Mozambique borrowed $850 million dollars to invest in a new tuna fishing fleet meant to jumpstart the countries fishing industry. However, Mozambique did not buy fishing boats, it bought gunboats, and shortly afterward it emerged that the government had been hiding an additional $1.4 billion of in loans whose use is shrouded in mystery. By 2016, Mozambique was unable to pay its loans and it defaulted on its debt. Mozambique is now in the arms of it is creditors and the IMF. When its gas fields start producing commercial gas in 2023, the money will go towards paying its loans first before it goes to the people of Mozambique.

The second way African debt tends to get out of hand is through investment in misguided projects, otherwise known as white elephants. These projects are often pursued for political reasons such as being in the part of a country the minister comes from, or connected people getting the contracts rather than development objectives being main goal. Today there is a building frenzy across the continent as governments invest in infrastructure to boost economic growth. This infrastructure is expensive, and governments have to borrow to fund it and it is a large part of the significant increase in debt on the continent over the last few years. If these roads, railways and dams are white elephants and provide little value to communities and countries they are in, Africans will be saddled with debt for vanity projects.

The third way in which governments accumulate debt is through providing guarantees to state-owned companies who take on debt for a variety of purposes. However, many state-owned enterprises in Africa are poorly run, with spotty oversight and take out debt for poorly conceived expansion plans or to fulfil poorly thought-out political directives. Eskom is South Africa’s publicly owned electricity monopoly, but it is in dire condition. Mismanagement, corruption, old power generation plants, expensive construction of new plants and a failure by the government to let it raise tariffs has put Eskom into a precarious position. Eskom has over the years borrowed to cover the gaps using government guarantees. According to figures provided by the power utility, total debt amounted to R359 Billion (29 Billion Dollars). This amount of debt, as the finance minister recently conceded is a threat to the South African economy. And Eskom is not the only state-owned enterprise in South Africa in trouble. Government guarantees to state owned enterprises stood at R467 billion at the end of 2015/16. Standard & Poor’s forecasts they will swell to over R500 billion by 2020 – 10% of South Africa’s current GDP, adding to South African debt that is already worth over 55% of GDP.

The problem with African debt is that too much of it is ill-considered, too much of it is stolen and most of it is not put into smart investments which will improve people’s lives and create value.

The trap closes – International control.

A key feature of international debt markets that puts the continent at a distinct disadvantage is who controls the debt. Creditors are not usually terribly concerned with what governments do with debt as long as it is paid back. Thus, when governments get into tight monetary circumstances, creditors usually demand that actions be taken to ensure that the debts are paid. The vehicle for this is usually the IMF, the multinational institution charged with securing global financial stability and debt defaults are bad for stability. When the IMF comes in to bail out a government it comes with conditions and as Africans found out in the 80s and 90s (and as Greeks are experiencing now) those conditions are painful. They usually involve a mix of cutting government spending and services, raising taxes and cutting subsidies, privatising public services, selling public assets, cutting the number of government employees and limits on development, spending and investment. With African governments piling up more and more debt we are getting closer to being subject to IMF conditionalities again, and the pain and protest seen in Greece will become a feature in Africa.

A Developmental Debt Policy Framework

The question becomes, how do we make sure any money we borrow is good debt. How do policy makers, politicians and the wider public decide what is worth borrowing money for? If Africa is to end the debt trap cycle it must change the way it decides to borrow, if African countries need to borrow money to fund development expenditure, then we must have something that guides that process. This requires a developmental debt policy framework, that is based on a set of principles that guides various actors as they decide whether the government should be borrowing money. The principles upon which responsible developmental debt would be based are simple. It must be sustainable, valuable, and accountable. These three principles would answer the key questions of why we are borrowing, how are we borrowing, can we afford it and will it create value for the country.

Sustainable

Put succinctly, sustainability in debt is about the ability of country to afford the debt. Can the money borrowed, both the principal sum and interest, be paid back by either normal revenues or by the revenues generated project being funded, without requiring extra burdensome measures, such as additional taxes or cutting of existing government services. Ensuring debt meets this requirement of sustainability will ensure that African states can afford the debt they take on.

Valuable

The principle of value is aimed at ensuring that the areas the debt funds have value to the nation. Value can come in two forms. First, value to people, improving the living conditions or opportunities of people. If it can be demonstrated that a policy, initiative, service or project that requires funding will demonstrably improve the lives of the public, it is not money wasted, as fundamentally development is about improving the living conditions and opportunities available to Africans. Secondly, value for money, which is simply, can the project, or initiative generate enough revenue to pay for the money being borrowed. These two forms of value do not limit the options for governments, rather they ensure that the money borrowed will go into something of importance. For instance, improved healthcare is key to improving the lives of millions around the continent and this requires that Africa train and deploy many more healthcare workers, as doctors, nurses, lab technicians etc., but this is an expensive undertaking. However, the training and deployment of a significant number of healthcare workers is not cheap. If the government can develop a program that trains and deploys healthcare workers in a way that benefits the majority of the population, borrowing to fund this can be justified. In terms of value for money this would be aimed primarily at infrastructure projects and guarantees to state owned enterprises, if it can be demonstrated that these projects (e.g. a new railway) or state corporation (e.g. an airline) can reliably pay for itself then borrowing to fund the investment can be justified.

Accountability

The principle of accountability is simple, the public finances must be public. Transparency in public financing creates accountability. Accountability in public debt transactions would require governments to open about what the borrowing is going to fund, the terms upon which the money is to be borrowed, how they plan to pay the debts back and tracking the use of the borrowed funds to ensure that unlike Mozambique’s gunboat tuna fleet, it goes where it is intended.

These three principles are interrelated. Debt that creates value is far more likely to be sustainable and being open and accountable about the terms on which the money is being borrowed allows for sustainability and value to be accurately and properly assessed. Having a developmental debt policy framework based on these three principles, would help ensure that Africa takes on debts that serve a developmental purpose. Furthermore, these principles can be developed into more detailed project and policy assessment frameworks, which policy makers, politicians, civil society and the wider public can use to access the government’s borrowing and hold it to account. Unlike the conditionalities imposed by the IMF or bond holders using these principles to guide African debt would be aimed at development not just paying back the money, they would give Africans agency over their own debt by requiring responsibility on the part of African policy makers. To end the cycle of African debt traps where development and vital services are sacrificed on the altar of fiscal responsibility, will  require Africa to adopt policies that better guide how the continent borrows and what it uses for.

[1] IMF, Regional Economic Outlook Sub-Saharan Africa: Fiscal Adjustment and Economic Diversification, October 2017 https://www.imf.org/~/media/Files/Publications/REO/AFR/2017/October/pdf/sreo1017.ashx?la=en

[2] http://guides.wsj.com/personal-finance/investing/what-is-a-bond/