James D Rogers: Accountability, transparency and governance in Sierra
Leone
Keynote address and statement by Dr James D Rogers, Governor of the Bank of Sierra
Leone, at the Second Audit Risk and Governance Africa Conference, Zanzibar, Tanzania,
17-20 July 2007.
* * *
Mr Chairman, Conference Organisers, Distinguished Ladies and Gentlemen,
I wish firstly to thank the conference organisers for their kind invitation to deliver the keynote
address at this conference on this very topical and important subject.
My remarks will be in six parts. After an Introduction, the First Part will consider the Meaning
and Scope of Accountability, Transparency and Governance. The Second Part will examine
the relationship between Governance and Development. Part Three will present Aspects of
Governance in Sierra Leone. This will be followed by General Remarks in Part Four. Part
Five concludes.
Introduction
Accountability and transparency have occupied a very high lead in discussions of state
management. Hardly would a speech be delivered, at domestic or international gatherings,
articles written, in the popular press or in professional and academic journals, on issues of
state management, without at least an allusion to, if not an extensive treatment of, these
concepts. Indeed, serious examination of these concepts takes us into the complexities of
governance, aid conditionalities and effectiveness, international economic cooperation,
sovereignty of developing countries, economic development, achievement of the millennium
development goals, and associated issues.
It is within the context of these considerations that a fuller analysis and understanding of
these concepts can be obtained. This, however, is a very wide agenda. There is an extensive
and growing literature giving varying perspectives on the subject, and one can only be
selective in the examination of the issues.
Meaning and scope
Accountability and transparency are major pillars in the architecture of governance. While
governance itself is not uniquely defined in its various uses, as we shall discuss shortly, most
definitions of the term implicitly or explicitly embrace the principles of accountability and
transparency. Many examples can be cited in support of this position. A typical example of
this is provided by Paul Wolfowitz, former President of the World Bank, who in a 2006
speech in Jakarta stated as follows: In the last half-century, we have developed a better
understanding of what helps governments function effectively and achieve economic
progress. In the development community, we have a phrase for it. We call it good
governance. It is essentially the combination of transparent and accountable institutions;
strong skills and competence, and a fundamental willingness to do the right thing.
Governance itself is not a new phenomenon. While its genesis may be traced to the Greek
city-states, its meaning, purpose, practice and extent have evolved over the centuries,
reflecting changing circumstances and specific concerns.
In the context of developing country relationships with the international donor community
however, we are dealing with a recent manifestation, which surfaced in the 1990s. Hyden
and Court in their 2002 Discussion Paper, Governance and Development, relate the
emergence of this dimension of governance to the changing paradigms in thinking on
development.
They trace the evolution of development thinking from the emphasis on projects to
programmes, then to policies, and the latest recognition that in addition to these, politics is
also important. The inclusion of the political dimension in development practice has altered
the development landscape, prompting intrusion into aspects of policy earlier deemed
beyond the limits of donor activity; with concomitant protests of violation of sovereignty and
related controversies.
The concept of governance arising from this process is not precise in meaning. Despite
attempts at distinguishing between the political, economic and administrative aspects of
governance, its analytic and operational dimensions, and its constitutive and distributive
elements, in the final analysis governance is essentially all-embracing in its essence. It
percolates through the entire fabric of the political, economic and social life of a nation.
Recognition of this is reflected in the diversity of definitions given to the concept. While it may
be too time-consuming to provide a sampling of these definitions, the flavour of the concept
can be savoured from the following statement of Vivien Collingwood of Nuffield College,
Oxford in the paper, Good Governance and the World Bank. It states:
There are many competing views on what the term "good governance" should mean, but
most donors agree that it should include some (if not all) of these: Increased public
accountability and transparency; respect for and strengthening of the rule of law and
anticorruption measures; democratisation, decentralisation and local government reform;
increased civil society participation in development; and respect for human rights and the
environment.
Further, we are reminded that apart from the lack of precision in the meaning of governance,
it is also an evolving concept, embracing new elements with the passage of time. This arises
from its normative conception and the observation that "the values that provide the
underpinning for governance are the values postulated by international donor institutions".
When it was initially embraced by the donor community in the early 1990s, it was seen as
limited to the exercise of authority with respect to the management of resources for sound
economic development. In the mid-1990s the requirements of transparency, accountability
and participation were added to its characteristics. By 2000, the Development Assistance
Committee of the OECD adopted a perception of good governance as requiring "a broad
approach to partnership extending beyond government and parliaments to include civil
society and the private sector", and adding to the notions of transparency and accountability
that of predictability.
Given their centrality in the governance agenda, it would be advisable to expand a little on
transparency and accountability.
Transparency refers to the need for openness in government policies and decisions. Such
openness, and making available required information to the populace, will reduce the scope
for misuse of resources and enhance public capacity for holding governments to account.
One of the crucial areas highlighted for attention in this regard is the budget. It is through the
budget that the management of national resources is mainly implemented and the absence
of transparency in budgeting processes can engender corruption, inefficiency and inequity,
and compromise the provision of public services and the development effort. Particular focus
is advised on public procurement. The use of open tender processes, publication of relevant
information regarding award of contracts, easily accessible complaints procedures when foul
pay is suspected, are among the crucial considerations for ensuring good governance in
public financial management.
Similar approaches should be adopted in the management of revenues accruing from natural
resources such as oil and other mineral wealth, forestry and fisheries resources. The
contracts signed with foreign partners for the exploitation of these resources, the revenues
accruing there from and the uses to which they are put should be readily accessible to the
populace. Absence of transparency in these matters creates breeding houses for conclusion
of arrangements which may not be of general national benefit, encourage misappropriation
and exploitation of national resources in the interest of an elite minority, with a potential in the
long run of threatening national cohesiveness and precipitating instability.
The case for transparency and good budgetary management assumes further significance in
the evolving advocacy for channelling aid through the domestic budget. The provision of aid
in the form of general budgetary support confers greater independence in the use of
resources on recipient countries, stronger national ownership of development policies and
programmes, and lower costs than those associated with multiple aid delivery modalities. For
this intention to be achieved on a wide basis and the proffered benefits realised, donor
governments and institutions must have confidence in mechanisms in place in recipient
countries for the management of the budget. Worries about corruption and mismanagement
are antithetical to this objective; hence the need for strengthened budgetary procedures,
improved governance and transparency.
There is a strong perception in the donor community that international assistance is required
to help strengthen the public financial management systems and processes in aid receiving
countries, including oversight by parliament, audit boards and civil society. Apart from the
technical dimensions of the intervention, it is considered pertinent that, as may be relevant,
the recipient countries should subscribe and adhere to, internationally sanctioned
arrangements, such as the Extractive Industries Transparency Initiative (EITI), to ensure
appropriate disclosure of revenue accruals and maximisation of inflows from national
resources.
Accountability is the natural concomitant of transparency. Indeed, the purpose of
transparency is essentially the facilitation of accountability. In general, accountability refers to
the obligation of those in authority to account to those on whose behalf they exercise such
authority, for the discharge of the responsibilities entrusted to them. We can distinguish
between financial, political and administrative elements of accountability. The exercise of
accountability requires a system of laws, regulations and codes of conduct. In addition,
mechanisms should be established for monitoring compliance and deviations, and institution
of corrective measures.
Financial accountability, which tends to be the main focus in this context, pays special
attention to budgetary processes. It is deemed a necessary condition for good governance;
prudent management of public resources; reduced corruption; better delivery of services; and
a support to efforts at poverty alleviation. Strengthening financial accountability requires
reforms almost across the board, touching on the parliamentary, judicial and administrative
structures and modalities of government, and could thus entail a far-reaching revamping of
governance systems.
Governance and development
We may now wish to address some thoughts on the reasons for the recent emphasis on
governance in the development discourse. We have already alluded to the relationship
between changes in the development paradigm and the evolution of the governance
concept. Specifically in the context of World Bank interventions to foster development in the
third world, various strategies had been pursued since about the 1960s, but the effort had not
yielded the expected results. In grappling with this problem, the perception gained ground
that the institutions of the state were fundamental to the development process and the use of
aid, hence the "institutions matter" perspective that eventually emerged. The 1989 "crisis of
governance" in Sub-Saharan African report was a landmark in this evolution, which triggered
the mainstreaming of governance in the Bank's development work. As the major
development finance institution in the world, and a dominant influence in thinking on
economic development, its ideas soon permeated not only the international financial
institutions (IFIs) but the aid community generally.
The precise link forged between good governance and economic development is the raison
d'etre of the central place accorded good governance in current international development
discourse. Various formulations of this relationship have been propounded. Doorknobs for
instance justify good governance, namely the fight against corruption, nepotism, bureaucracy
and mismanagement, and the promotion of transparency, accountability and proper
procedures, as ensuring the effective utilisation of aid for the achievement of poverty
reduction. Other writers variously state that good governance is a pre-requisite for
sustainable development in Africa. They stress the importance for growth and development
of a predictable regulatory framework, efficiency and transparency in public administration
and an independent judiciary. Others remark on the pressures arising from globalisation and
the competition for aid and investment as major driving forces for good governance; and the
comparative attractiveness to investors of a corrupt-free country, with sound policies and
well-managed administrative and judicial systems.
The link between good governance and development is however not universally accepted
and its implications are not always viewed positively.
It has been argued that the link between governance and poverty reduction is at best
tenuous. While in some areas empirical evidence tends to suggest that good governance
leads to positive growth outcomes, other evidence suggests that this may not be so. The
case of some Asian countries, whose governance record is a far cry from the accepted blue
print, but have posted impressive and sustained growth, has been cited as part of the
contrary evidence.
Against this background, it is proposed that further research is needed to provide a definitive
position on the matter. The possibility is expressed that though governance and poverty
reduction may be correlated, the direction of causation may not be so clear.
Further, it is claimed that governance is a multi-dimensional concept and provides an avenue
for intrusion into virtually every aspect of state functioning. It thus essentially compromises
sovereignty in decision-making, and transfers accountability of government from its own
citizens to the donor community.
Given the imprecision of the meaning and instability of the concept, approaches to its
measurement run into difficulties and yield results of doubtful validity and reliability. Yet these
measurements have become the basis for further conditionality in aid distribution and the
introduction of selectivity in determining aid recipients. With the wide-spread inclusion of
governance criteria in aid conditionality, there is a measure of stress imposed on recipient
countries, which generally lack the capacity to pursue the wide range of reforms required, the
urgency of some of which have been called into question by some informed observers.
Some critics see a more sinister dimension in the governance discourse, claiming that the
whole purpose of the approach is to create in the developing countries the state-market
relationships typical of Western neo-liberal systems. This is seen as exploitation by the donor
community of developing countries' need for investment, aid and debt relief, to create
conditions that will facilitate their infiltration by globalised financial interests.
The following statement in the July 2004 issue of South Bulletin is typical of this perspective:
"Whence this striking paradox, inherent in good governance, of calls going out from the
international organisations to national governments that these latter adopt, indeed
"appropriate", neo-liberal economic policies imposed from without while the globalised
financial markets dispossess them of their sovereignty and insinuate themselves into the
countries' ownership structure of capital".
The controversy continues on the link between governance and development, and while its
proponents claim strong empirical evidence for it, there is strong assertion of the contrary, or
at least agnostic, view in other quarters. It would seem that the jury is still out on this debate.
Aspects of governance in Sierra Leone
The principal donor institutions in Sierra Leone, as in most developing countries, are the
World Bank, and the IMF. Donor support programmes coordinated by the World Bank are
provided within the framework of the Bank's Country Assistance Strategy and the Poverty
Reduction Strategy Paper. Following implementation of an Interim Poverty Reduction
Strategy Paper, the Bank approved a full Poverty Reduction Strategy Paper for Sierra Leone
in February 2005, covering the period 2006 - 2009. The major instrumentality for Fund
assistance to Sierra Leone is the Poverty Reduction and Growth Facility (PRGF). A
successor arrangement under this facility was agreed with Sierra Leone in 2006, covering
the period 2006-2008.
It is important to stress that in their country intervention, the IMF and World Bank liaise with
major players in the donor community and, to a greater extent than not, their programmes
define the parameters for entry by other donors into the country's assistance programme.
Consequently, although the overall assistance package usually involves inputs by a number
of other parties, including the African Development Bank, bilateral donors and other donor
agencies, the content and direction of the Fund and Bank programmes constitute the
framework for essentially all other donor assistance.
Reflecting their concerns with governance, and predicated on their assertion that bad
governance lies at the heart of the poverty problem in Sierra Leone, both the Bank and Fund
programmes for the country lay stress on the governance factor in the PRSP and PRGF.
The PRSP, for example, has three pillars, the first of which is Promoting Good Governance,
Peace and Security; the other two being Promoting Pro-Poor Sustainable Growth; and
Promoting Human Development. One may note that within its wider interpretation, some
commentators may include aspects of human development promotion under the general
rubric of governance. The PRGF also contains a measure of governance requirements.
The governance dimensions of the PRSP emcompass a number of the standard elements of
the governance package. It thus calls for action on public service reform; tax reform;
strengthening public financial management and procurement; decentralisation;
anticorruption measures; and improvement of the statistical base. Specific measures include the
institution of Public Expenditure Tracking Surveys (PETS); Medium Term Expenditure
Framework (MTEF); Strengthening the Internal Audit Function; Improved Parliamentary
Oversight of Budgetary Processes; and Procurement Reform.
Within the sphere of transparency, accountability and democracy, the anti-corruption agenda
is emphasised, as well as strengthening the capacity of the National Electoral Commission.
The decentralisation process should be pursued through the formulation and implementation
of a devolution plan. A comprehensive civil service reform programme should also be
formulated and implemented. There are also requirements for anti-money-laundering
measures, as well as adoption and adherence to the Kimberley process for diamond
marketing, and the Extractive Industries Transparency Initiative (EITI). Similar requirements
are built into the PRGF.
Three points should be noted at this stage.
(1) The governance aspects built into the basic programmes of assistance from the
World Bank and IMF are extensive and comprehensive;
(2) These requirements are conditionalities for release of funds and other assistance;
(3) In some cases they are triggers for other lines of action.
The following statement reflects the importance attached to governance issues in Sierra
Leone's assistance programme by the donor community:
"To underline the importance of the quality of governance, government and its four budget
support donors (ADB, DFID, EC and the World Bank) issued a joint communiqué in July
2006 referred to as the "Improved Governance and Accountability Pact". This pact reasserts
the commitment of the government to good governance and it sets out a number of activities
to be pursued through July 2007 in ten key areas. These include efforts related to: free and
fair elections, anti-corruption, anti-money laundering, procurement, the Office of the
AuditorGeneral, civil service reform, decentralisation and the role of non-state actors (notably the
private sector and civil society), the creation of a more conducive investment environment,
implementation of the extractive industries transparency initiative and better public service
delivery in health and education. The Pact also commits the four budget support donors to
further harmonisation around the government's programme".
Enforcement of the governance agenda is consequently exercised by the donor community
through inclusion of governance requirements in the programmes of assistance agreed with
the country; establishing them as conditionalities and trigger requirements for release of
funds; providing technical assistance to ensure the performance of these elements of the
programme, including provision of personnel in some cases. We may note in passing that
action on all these requirements is in progress and the related programmes are in varying
stages of implementation.
Civil society is also becoming increasingly important in trying to put pressure on government
to deliver on governance issues. In the Sierra Leone context, special mention may be made
of the Campaign for Good Governance, the Civil Societies Organisation, the 50/50 Group,
the Lawyers Centre for Legal Assistance (LAWCLA) and other bodies. A recently established
chapter of the Institute of Directors pays particular attention to the improvement of corporate
governance. The press has continued to wage a governance campaign, especially with
respect to anti-corruption matters.
Some general remarks
The governance debate is a difficult one, not least because of the imprecision of the concept
and its multi-dimensionality. This opens room for a range of interpretations and the inclusion
of diverse elements, rendering the basis of discussion somewhat fragile.
There is also a measure of ambivalence regarding its practical application and suspicion in
some case of the motives underlying the significance attached to it by the donor community.
Its link with poverty reduction is not uncontested, and questions also arise as to whether it is
not really the Washington Consensus and structural adjustment in new clothing.
In the African context, there is admission of mis-governance in many areas of state
management. In particular, corruption and impunity in public administration, conduct of
elections, financial management and judicial processes, are bemoaned on a wide scale.
Serious observers agree that there is a need to correct the institutional arrangements that
create an avenue for some of the negatives observed in the governance of many countries.
This admission notwithstanding, questions continue to be raised as to whether the range of
measures subsumed in the governance package is appropriate to correcting these
deficiencies.
The emphasis, it is believed in some quarters, should be on capacity building and helping
countries to pursue home-grown development programmes. While admittedly there is a
capacity building element in the governance package, the relevance of some specifics is
brought into question. Thus, complaints are heard that some measures ignore the
sociocultural context in which the institutional changes are to be effected, thereby constituting an
illegitimate transplantation of institutions into developing countries. Issue is made of the use
of governance indicators as conditionality for assistance, and the onset of selectivity, rather
than an attempt at providing more meaningful support for relevant institutional development.
Countries that accept the governance framework programme proposed by the donor
community receive funding and support, while those more sceptical are more or less left out
in the cold. Thus arises the questionable extent of linkage between governance,
development and poverty alleviation. The fact that most African countries are so aid
dependent compels acceptance of the governance conditionalities. Thus they are forced into
a situation, which divests them of control of their economies, adopting policies that may not
conduce to their long-term development, and making them easy prey for the interests of
global capitalisation.
Yet the need for governance reforms in most African countries cannot be denied.
Inadequacies in the institutional set-up undoubtedly need attention and correction to bring
about efficiency and competence in the management of the state, and hence the ability to
provide citizens with the services they require for their well being.
The plight of the developing countries compels resort to external assistance. Some
economists, prominent among them Jeffrey Sachs, have proposed the need for a "big push"
to help alleviate their problems. But the provision of such resources would inevitably require
some conditionality, perhaps even more so the greater the resource injection. Yet there is the
contention that the assistance should be in support of local reform efforts, based on local
circumstances and priorities. Some observers assert that some of the governance problems
in these countries arise from the very fact of poverty itself and that is the problem, which
requires urgent and direct attention, and not the panoply of governance reforms.
But the approach to providing the assistance remains a polemical issue, opposing among
others, sovereignty and resource provision. As Martin Wolf stated in the Financial Times of
London in March 2004:
"If the sovereignty of such dysfunctional states is protected, their people will remain
impoverished. If their people are to be helped, the sovereignty of their states must be
challenged".
But we may ask, do we have to confront such extremes? Could there not be a mean that
could lead to a compromise that reduces the divergence in these polarised positions? Or
must the payer of the piper continue to have exclusive control over the tune?
What seems really at issue is what Kemal Dervis has identified as the continuation of an
ideological struggle. His statement in his book, A Better Globalisation, encapsulates the
problem when he asserts:
"Humanity has not exhausted the great ideological debates; they are only changing in nature.
The beginning of the 21st century is being shaped by a greater ideological debate about the
nation-state and global governance, about the legitimacy of the use of power, and about
public policy at the local, regional, national and supranational levels, all against a backdrop of
huge inequalities in wealth, income and power that divide the world."
Conclusion
There certainly are governance challenges in Africa, which must be addressed. Fortunately,
action is in progress with respect to many of these. Weak administrative structures,
outmoded legal systems, poor financial management, corruption and impunity can only further
stifle and impede the attraction of investment, the provision of public services, and alleviation
of the plight of the bulk of our populace.
The extant approaches to resolving these problems, as championed by the international
donor community, may not be adequate. We must consequently continue the international
development dialogue in a bid to find more acceptable modalities for improvement in
governance that will recognise, respect and incorporate legitimate concerns of aid recipients.