The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Message from South Africa to Obama: Transparency builds stronger institutions

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“The proof of the pudding is in the tasting,” says public finance management reform expert.

Neil Cole is the Executive Secretary of the Collaborative Africa Budget Reform Initiative.*

Neil Cole. Photo: Ralph Alswang / Oxfam America
Neil Cole, Executive Secretary of the Collaborative Africa Budget Reform Initiative. Photo: Ralph Alswang / Oxfam America

We all know that policies and budgets in Africa are formulated much better than they are executed. But when the African finance ministers I work with don’t know what the US is funding in their countries, it is hard for them to plan their own development efforts. Therefore adequate levels of transparency on both the donor aid side and on the side of governments receiving aid are needed to translate reform rallying cries into action.

An opportunity to make use of this enthusiasm is during US President Barack Obama’s visit to South Africa this week.

Information on aid from donor countries to countries in Africa needs to be comprehensive. That means being timely, useful, accessible, reliable, and comparable. Donors can report better to their constituencies, while helping recipient governments to plan and implement more effectively.

If President Obama is serious about supporting good governance and strengthening institutions in Africa, here are three things he must remember while speaking with leaders in Africa:

1. Who sets priorities for aid remains a critical rallying point. Country ownership of reform and home-grown approaches that take into account capacity needs, technological and skills transfer, and the dynamic changes and significant progress in countries receiving aid, are indispensable to aid’s contribution to achieving sustainable development.

2. African governments recognize the absence of good governance and that it undermines development. Countries implementing public financial management reforms still struggle with insufficient budget and aid transparency, impaired constitutional accountability, as well as technical and managerial shortfalls that hinder the implementation of budget reforms. But the Declaration on Good Public Financial Management, which was endorsed by African Ministers of Finance in 2012 at the Annual Meeting of the African Development Bank, is an important touch point.

3. Providing development assistance through Country Systems should be the rule, not the exception. Donors should not just build or provide funds for roads, but capacitate countries to plan, construct, and maintain their own roads. In other words, donors should utilize national arrangements and procedures for priority setting, public financial management, procurement, monitoring and evaluation, audit, and social and environmental impact assessment procedures. The benefits of donors using country systems have been well researched and include a more stable macroeconomic framework, higher efficiency of public expenditure, lower transaction costs, and higher potential for overall impact.

Those finance ministers and their structures and personnel need to play their part too, by ensuring that the rules are clear, i.e. the responsibilities of national and sub-national governments in terms of the disbursement of funds. This means that these rules are brought into legislation and that people are held responsible for the implementation of programs. This also means sharing information so that citizens and civil society can hold their representatives accountable.

Aid transparency may only be one step, but it’s a vital starting point for greater and more effective governance and accountability. “Yes we can” took off like wild fire throughout the world, Mr. President, when you first campaigned for your office. What can you (we) do now?

Grab a spoon. Let’s taste the pudding.

*The Collaborative Africa Budget Reform Initiative is a pan-African network of senior government budget officials working collaboratively on the reform of budget practices and procedures created in 2004. As an international organisation, CABRI has since emerged as an authoritative source in the field of public finance management reform in Africa and you can read CABRI’s position on aid transparency here

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