Policy News
The G8, transparency and tax: time to change the rules
The Prime Minister has set out a hugely ambitious G8 agenda on tax, transparency and trade (see his speech on 15th June). Getting these issues right is crucial if developing countries and G8 partners are to address the causes of poverty, rather than simply addressing its consequences. In a little over 24 hours, we will see whether the Prime Minister and his G8 counterparts are able to deliver on the ambitious rhetoric. The eyes of the world are watching.
There has been some good news. On Saturday the 15th June, the UK confirmed that all of its Overseas Territories and Crown Dependencies have signed up to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, will participate in the planned system of automatic exchange of tax-related information, and will draw up action plans on who owns and controls companies (so-called beneficial ownership).
In addition, the UK itself has committed to support the establishment of central registries of beneficial ownership. This will be done, in the EU, through the 4th EU Anti-Money Laundering Directive. The UK Government will decide whether to support private or public registries after further consultation. The Prime Minister made clear on 15th June that he “hopes the whole world will move to public registries”, confirming the message he gave to EU leaders in April.
All this is very welcome. The UK Government and the Prime Minister should be congratulated on their leadership. But to really deliver for development, more needs to be done. All G8 countries need to tackle the scourge of Phantom Firms, by disclosing information about who owns and controls companies and trusts through central public registries. This will ensure that such information is available not only to tax and law enforcement authorities but also to citizens organisations, the media and others with a keen interest in following the money and rooting out corruption.
The G8 must also ensure that the system they plan to put in place for the automatic exchange of tax information involves developing countries from day one. Investing in the capacity of tax authorities is important – particularly when it’s focused on building their capacity to automatically exchange information. But what really matters is changing the rules.
By taking these steps, the G8 can make sure that it not only puts its own house in order, but does so in ways that work for people beyond the G8 too. The UK Government must continue to lobby its G8 partners, with no let-up in pace or decrease in ambition. G8 partners must decide where they want to be – backing and shaping the transparency revolution or resisting the tide of history. Africa expects.
Look who’s talking about our 2013 DATA Report
An incredible amount of work goes into creating our DATA Reports and the 2013 edition: Financing the Fight for Africa’s Transformation, was a particularly epic operation.
So it’s always fantastic to see so many people talking about it when it’s finally published. What did people make of the findings? Here’s a collection of our favourite blogs, tweets and media features.
More than just a bar on a chart in New York: Why the MDGs matter
This blog originally appeared in the New Statesman.
This time of year always seems particularly hectic for the ONE Campaign and others in the movement against extreme poverty. The run-up to the annual G8 summit, which this year is hosted by David Cameron near Enniskillen in mid-June, is our equivalent of Sir Alex Ferguson’s “squeaky bum time”. Within a few weeks we’ll know what we’ve won and what we’ve lost, and the implications will be felt for a long time.
Yesterday I wrote up on my office wall nine big moments for ONE in this period. The first is today, with the launch of our 2013 DATA Report. The report shows that while aid and investment from wealthier countries is critically important, perhaps its greatest value is in leveraging and supporting resources closer to home – the resources that developing countries themselves can provide – which will ensure that one day, aid from outside will be rarely needed.
We’ll continue to push governments in Europe and beyond to stick to the commitments they’ve made. But African governments have made promises too, and in the DATA report we look at some of the big ones.
Overall, things are getting better. The report explodes the myth that all advances against poverty and disease are thanks to China; in fact, in six of the eight MDG targets, at least half of sub-Saharan African countries are fully or partially on-track. However the performance of leading countries like Ethiopia, Malawi, Ghana, Benin and Burkina Faso is undermined by persistent underperformance by a handful of others, including the Democratic Republic of the Congo, Zimbabwe, Chad and Burundi.
There is also a clear correlation between countries that are allocating a greater share of government spending to health, education and agriculture over the past decade and improved progress in those areas. From 2000 to 2011, Ethiopia lifted an estimated 10 million people out of extreme poverty, and over the same period the government spent nearly 45 per cent of its total budget on health, education and agriculture, a third more than the average in sub-Saharan Africa. The fact that increased resources go hand in hand with better results might be considered a statement of the obvious. But in these sceptical times, it’s helpful that a hard-headed look at the numbers demonstrates the link is strong.
However, no African government is on course to meet the promises it has made for investment in all three of these sectors. In the next three years as the 2015 MDG deadline approaches, sub-Saharan Africa as a whole could add $243bn to its health, education and agriculture efforts. The difference this could make is clear in one country after another: for example, by meeting its health spending commitment between now and 2015, Nigeria could provide an anti-malarial bednet for every citizen, vaccinations against killer diseases for every child and life-saving treatment for everyone who is HIV positive in Nigeria – and still have billions to spare in its health budget.
As the G8 leaders meet in Enniskillen this report should remind the world’s decision makers of the task immediately ahead. On Friday, David Cameron delivers the report of the High Level Panel he has co-chaired, on what should replace the MDGs after 2015, to the UN Secretary General in New York. It’s important of course. But it’s hard to avoid the feeling that if there were the same level of interest in the pre-2015 agenda, the world could get a lot closer to achieving the goals we already have. That’s not just a bar on a chart in New York: it means kids in school, small farmers with more chance to work their way out of poverty, people alive in 2015 who would otherwise die if we fail to act. There are less than a thousand days left until the end of 2015 – we need to make every one of them count.
In the days before the G8 summit, leaders of a wider group of countries will meet for a “Nutrition for Growth” event, dedicated to tackling the scourge of malnutrition. If this event is to succeed, it will need to drum up resources from both developed and developing countries, as well as companies, foundations and charities. ONE’s report couldn’t be clearer on this: you get out what you put in.
But the G8’s core agenda is also hugely relevant. David Cameron has called for a “transparency revolution”. With greater transparency – whether in the extractives industries, aid, public spending, company ownership or tax information – governments and citizens in developing countries will be able to ensure that funds intended for the fight against extreme poverty do not end up in the wrong hands. If that revolution succeeds, developing countries will be able to claim more of what is rightfully theirs – and have more resources to build a better future for all, accountable to all.
All of this requires leadership. David Cameron’s government has been resolute thus far. It has built on the excellent work of its predecessors and finally met the historic 0.7 per cent GNI spending target. But this test is a different one. In the coming weeks, as the UN High Level Panel delivers its report and Cameron hosts the series of gatherings culminating in the Enniskillen summit, he has a real opportunity to be remembered as a true global leader on development. It will require determination and vision. I hope he will find both.
INFOGRAPHIC: Who’s winning Africa’s race to meet the Millennium Development Goals?
Our 2013 DATA Report is published today – check out our infographic for the headline findings, or if you want the detail, read the full report.
Announcing the 2013 DATA Report: Financing the Fight for Africa’s Transformation
Nursery school students eat a lunch of fresh bread and vegetables prepared onsite at the Debre Libanos Epicenter in Wakene, Ethiopia, built by The Hunger Project in 2006. Ethiopia are one of the trailblazer countries leading progress on meeting the Millennium Development Goals. Photo: David Snyder for The Hunger Project.
With less than 1,000 days to go until the deadline of the Millennium Development Goals (MDGs), ONE’s flagship DATA Report has a special focus in 2013, tracking how developing countries are progressing on these ambitious targets using the ‘MDG Progress Index’.
The 2013 DATA Report: Financing the Fight for Africa’s Transformation also measures how sub-Saharan African governments are faring against their own spending commitments in three poverty-busting sectors: health, agriculture and education. Finally, it offers recommendations for how the global community can intensify its efforts in a sprint to the MDG finish line.
We’ve uncovered remarkable progress:
- There are 10 sub-Saharan African MDG ‘trailblazers’ and dozens of countries have improved their performance.
- Sub-Saharan African resource flows have quadrupled since 2000, including domestic government expenditures, which account for almost 80% of all available finance. Domestic revenues, foreign investment, donor assistance and remittances are all playing an important role in boosting growth and development.
- Countries that allocate more of their budget to health, agriculture and education are, on average, progressing faster on the MDGs. For example, over the last decade,Burkina Faso spent a whopping 52% of its national budget on these three sectors and is currently on track to achieve four MDG targets (out of eight) and partially on track for another two.
But here’s the bad news:
- Some countries are falling behind on the MDG targets and slowing down regional progress. Nine of the fourteen global ‘laggard’ countries are in sub-Saharan Africa.
- African governments are falling far short of their own spending targets, and this has very real consequences. Take a large country such as Nigeria, which alone accounts for 11% of annual child deaths – if it were to meet its health spending commitment over the next three years, the additional resources could amount to $22.5 billion. This could pay for vaccinations for every single child, anti-malarial bednets for every citizen, and treatment for every HIV-positive person, saving millions of lives.
- Many donors are also off track in delivering on their promises, such as reaching aid levels of 0.7% of GNI by 2015 and delivering half of those increases to Africa. While aid flows rose dramatically from 2000 to 2010, we have now seen two consecutive years of decline, and, shockingly, sub-Saharan Africa is bearing the brunt of these cuts.
Sub-Saharan African governments and donors must urgently step up to meet their promises. Smart aid investments make a huge difference to the lives of the world’s poorest people, and donors should prioritise funding to mechanisms that best serve the MDGs, such as the Global Fund, the World Bank’s International Development Agency and the African Development Fund; all of which have important replenishments this year.
For investments to be effective they must be strategically targeted, carefully monitored, and – above all – transparent and accountable. Eight years after Gleneagles – another historic moment in the fight against poverty – as the annual G8 Summit is once again hosted by the UK, it is great to see transparency at the top of the global agenda. Transparency enables citizens to hold their leaders to account and demand that resources are used for the benefit of all. This is why budget transparency by African governments and aid transparency by donors is vital.
Tomorrow, the United Nations High-Level Panel will submit its recommendations on what global targets should follow the current MDGs. While the global community looks to the future, it is critical that it doesn’t lose sight of the urgent need to achieve the existing goals in these final 1,000 days. With each and every country that flies past the finish line, countless lives will be improved and the world will be one step closer to ending the absurdity of extreme poverty.
Anti-Corruption Views – The world must do a better job of tracking investments and results: Both now and for the next global development goals
Later this week, a group of 26 people will meet in Liberia to discuss how the world should tackle global development challenges over the next decade or two. It’s essential they thrust transparency, accountability and better open data into the heart of the debate and act on it. The so-called High-Level Panel of Eminent Persons (HLP) has an amazing opportunity to shape the fight against poverty and preventable disease; and a very heavy responsibility to accurately channel the desires and concerns of billions of people around the globe. In May, this small collection of current and past politicians, technocrats, and businesspeople will deliver their recommendations for how to take this fight forward. What comes out of this process, and the formal UN General Assembly deliberations this September, will frame the development landscape at least until 2030. To state the obvious, this is a high stakes game where policy, politics and pragmatism must all intersect in a complex and challenging way.
While this task is daunting, we are not starting from scratch. The current Millennium Development Goals (MDGs), which were adopted unanimously by 189 UN member states in 2000, provide some helpful signposts. Arguably, the MDGs’ greatest strength is that they are meaningful, measurable, and message-able. By rallying the world around a set of concrete goals, the MDGs have helped to deliver some of the most awe-inspiring progress in human history. Since their adoption, roughly 600 million people have been lifted out of extreme poverty; more than 6 million Africans have started receiving AIDS treatment; over 5 million lives have been saved because of vaccines; and nearly 51 million more African children are in school.
Despite the MDGs’ many strengths, they also have a number of shortcomings that must be addressed in the post-2015 framework. First, the goals were developed by technical experts in donor capitals, the OECD, and the UN, with little input from ordinary citizens in developing countries. This top-down process made it difficult to ensure that the goals properly responded to citizens’ most pressing concerns – even if they mobilized unprecedented global action. Early signs suggest that the UN has learned from its past mistakes. They are going to great lengths to solicit input from the poor, marginalized, and vulnerable – as well as politicians, development experts, and civil society organizations. This is an excellent first step (see ONE’s report calling for this last fall). Now the HLP, and the UN powers that be, need to digest the boiled down takeaways from the reams of ‘stakeholder’ input and use them as the starting point for the next set of goals.
Second, the lack of reliable, timely, and accessible data on MDG-related investments and outcomes has been a major challenge to both tracking progress and ensuring that interventions are effective. After decades of effort, we still do not know enough about how much money is available (both domestically and externally), where it is going, and what results it is achieving. This is one of the biggest scandals of the development field. For example, over 40 developing countries lack enough data on extreme poverty levels – arguably the most important MDG – to actually track progress. Let me say that again. Insufficient data makes it impossible to know, for nearly a third of developing countries, whether their MDG poverty goal has been met.
Moreover, time lags for data on MDG-related outcomes remain unacceptably high (when they are even available). On average, extreme poverty data is nearly five years old. Data on hunger (e.g., malnutrition) is four years old; followed by data on gender equality, education, and HIV/AIDS, which is at least three years old, on average. This must change. Only with timely and accessible data on investments and outcomes, can we deliver real accountability for the trillions of Naira, Pounds, Pesos, Euros, Rupees, and Dollars being spent and to ensure that we are constantly learning and adjusting our actions as we go along.
Together with thirteen organizations from Africa, Asia, Latin America, Europe, and the United States, the ONE Campaign has released a report today that outlines a series of recommendations to address these critical issues. First, we are calling for an open and transparent design process, ensuring that input from citizens in developing countries forms the core of the new global development goals. Second, we are calling on all developing and developed countries to provide consistent and timely reporting on investments and outcomes related to achieving the new goals. Third, we are calling for new investments in statistical capacity and open data systems to give citizens and policy-makers ways to use relevant information to hold governments and other stakeholders accountable.
The existing MDGs demonstrate the power of purpose. By channelling the world’s attention and fire-power, they have helped catalyse some of the most important development advancements in history. Yet, we are only halfway home on this front. More, much more, must be done over the next three years. As we sprint to the finish line, and start to consider the next race, we must also seize the opportunity to fix the faults of the present. By implementing these proposed enhancements, the world can further maximize the impact of scarce development resources and accelerate progress in the fight against extreme poverty and other pressing priorities in the future.
This blog post originally appeared on Trust Law
Results of the 2012 Open Budget Survey and Index
Click here to view the full infographic
Today, the International Budget Partnership (IBP) – ONE’s key partner for efforts to promote open and transparent budgets in developing countries – released their 2012 Open Budget Survey. The 2012 Survey assesses 100 countries on 125 questions; 95 about the availability to the public of documents related to the budget cycle, and 30 about how citizens may participate in their country’s budget process. The Survey was carried out in 2006, 2008 and 2010, but has evolved over time. This year, IBP has partnered with the Open Knowledge Foundation on a Data Explorer, where you can see maps and rankings of Open Budget Index scores, sort questions by topic, or look at how the rankings have changed over time. Check out the data – the results may surprise you!
Click the infographic to make it larger
Participation in Focus
New for this year’s Survey is a series of questions on participation, something which IBP and ONE agree is essential if budget transparency is to pay dividends in terms of accountability and improved development results. The average score for the 100 countries surveyed in the 2012 survey is just 19 out of 100 on the 30 questions that measure participation. We’re excited that IBP is focusing on improving participation, and about the innovative ways the survey shows countries are getting citizens involved – including South Korea’s finance ministry field trips, Trinidad and Tobago’s public forums, and New Zealand’s tax hotlines – which allow citizens to report tax evasion or fraud anonymously. Sharing these stories helps to show that not all participatory budget processes have to look the same.
The Open Budget Index
The Survey includes the 2012 Open Budget Index, where countries are ranked on a scale of 0 to 100 based on the 95 budget questions. Countries score zero by making no budget documents public, or 100 by being completely transparent and making public all documents.
For 40 countries, data illustrates that progress has been made since 2006; those countries’ average Index scores increased from 47 in 2006 to 57 in 2012. The Index also shows that countries that start from a low baseline of transparency improve faster than those whose scores are nearer the middle of the ranking. Similarly, it’s even harder for countries that score well to improve significantly. Since the 2010 Index, countries that had been the least transparent, with scores of 40 or less, improved from 19 in 2010 to 26 in 2012, a 36 percent increase. Otherwise, however, progress was limited between 2010 and 2012.
How is Africa Doing?
Among African countries, South Africa leads the way with a score of 90 on the Index. This score is 2nd overall, behind only New Zealand, and ahead of the United Kingdom. Uganda also scores well, with 65, in the “significantly” transparent category. Unfortunately, 14 of the 26 countries in the index that provide “scant or no information” on budget documents are African. However, bad Index scores are relatively cheap and easy to fix. By simply making public budget documents that countries already produce, Index scores would improve significantly. And making those documents public is crucial for citizens in those countries to see how their governments are spending money.
There are seven countries where transparency has improved significantly (by more than 15 points) since 2010: Afghanistan, Burkina Faso, the Dominican Republic, Honduras, Mozambique, Pakistan and São Tomé e Príncipe. However, in Egypt, Zambia, Sri Lanka and Serbia, scores decreased by more than 15 points since 2010. So while improving budget transparency can be easy in the short term, institutionalizing participatory budget processes is more difficult, but necessary to ensure that progress is maintained and built upon by civil society.
South Africa: Africa’s Star Achiever
South Africa maintained very high levels of budget transparency in the 2012 Index, and while their rank dropped from 1st to 2nd in this year’s Index, their very high level of budget transparency – higher than that of the UK, France, Norway, Sweden and the United States – is very impressive. And the information that the South African government makes available has been used in successful budget advocacy. IBP’s website has multiple cases studies of local organizations using information about the budget to execute effective campaigns. One, by the Treatment Action Campaign, resulted in a National Treatment Plan for HIV/AIDS, putting 1.6 million HIV+ South Africans on ARV treatment. Another campaign focused on improving access of a social security grant to poor children increased access from 2 million in 2001 to nearly 11 million in 2012.
The IBP’s Open Budget Survey and Index are incredibly important to us, and to citizens around the world who need information in order to hold their leaders to account for the money they spend. We commend IBP on another job well done, and look forward to hearing more stories about how transparency is helping civil society around the world make the changes they want. Open Budgets, Transform Lives.
Join the conversation on Twitter: @OpenBudgets and #OpenBudgetIndex
Resource Revenue Management 101
Say that your country is blessed with natural resources. Oil, gas, minerals – it has it all. The future looks good. But deep down you worry that the bonanza could turn into a bust – maybe you live in Africa and have seen how windfalls have been wasted before. How do you know that’s not going to happen now? Are there any tell-tale signs of sound management of “commodity wealth”?
Marcelo Giugale, the World Bank’s Director of Economic Policy and Poverty Reduction Programs for Africa, recently asked these questions and, in response, offers us a combination of measures that every government should have in place to help citizens get a good deal from their resources.
We’ve looked at four of these measures and how they’re playing out in Africa.
First Measure: Governments publish their extractives contracts
Extractive resources are public assets and decisions about their use should be subject to public oversight. But many African governments are keeping their oil, gas and mining contracts firmly under wraps. This is a problem because confidential contracts prevent citizens from holding political and corporate leaders to account for the deals they’ve struck. Closed contracts may contain unreasonable tax breaks, terms that contravene national legislation or clauses that allow companies to ignore changes in national law. By contrast open contracts help maximize gains for citizens, and are a deterrent to self-serving actions on the part of government leaders. They also increase investment stability for companies by securing balanced deals from the outset.
Contrary to warnings that contract disclosure turns investors away, the countries that have elected to go the transparency route have watched investor interest in their resources grow. After Liberia and Nigeria signed up to the Extractive Industries Transparency Initiative (EITI) – a voluntary global standard that promotes revenue transparency and open extractives governance – their credit ratings improved and foreign investment increased. Both countries have passed national EITI laws that make independently audited reporting of resource revenue payments and receipts legally binding. Sierra Leone, with its devastating history of mineral wars, is now publishing all its mining contracts online. Guinea’s new mining code mandates the same. Ghana has made its most important petroleum agreements publicly available and has established a Public Interest and Accountability Committee made up of government, corporate and civil society representatives to oversee oil revenue flows. It is also an EITI member, with a national EITI law in the legislative pipeline. Zambia’s parliament is set to enact its EITI law this year. In fact, the majority of member countries of the EITI are African (22 of 37 members), although some key extractives producers – notably South Africa – have yet to sign up.
Second Measure: Rent from the exploitation of extractive resources is saved for bad times and for future generations
Massive offshore oil and gas discoveries in East Africa, from Tanzania to Mozambique, are catapulting countries in the region into global energy players, and will bring in billions in windfall revenues that could transform entire economies. Planned investments exceed the current GDP of some host countries. Barely a month goes by without new discoveries of extractive resources across the continent. These provide unprecedented opportunities for countries to tackle poverty and to ensure more prosperous futures for their citizens. But for this to happen, a substantial share of revenues need to be invested in assets, with a sense of responsibility to future generations, rather than used for immediate consumption. Too many countries have made the mistake of depleting their resources, allowing revenues to disappear through unsustainable spending and consumption, and finding their coffers quickly exhausted.
Although there are mixed views on whether current African producers – even those with relatively strong governance records – are investing revenues adequately or distributing them equitably, there is no doubt that issues of rent beneficiation and the importance of long-term saving is now high on the African radar. Governments are recognizing that beating the resource curse requires prudent fiscal policies with long-term expenditure frameworks that prioritize investment in human capital and infrastructure.
Sovereign wealth funds can help countries smooth the volatility of resource-driven revenues by lowering the effect of boom and bust cycles resulting from fluctuating commodity prices. They can also help a country diversify its wealth. The continent is currently witnessing a scramble for sovereign funds, reflecting a healthy interest by African governments in saving for future generations and in buffering their economies against financial shocks. As long as these funds are transparently managed and well-structured, they can help keep a country’s economic trajectory firmly on the upswing. Botswana’s long-standing Pula Fund, financed for the most part by diamond revenues, has been a strong source of growth for a country that was one of Africa’s poorest in the 1970s and now finances the university education of over 90% of its students. As oil revenue starts to flow into Ghana’s coffers from newly discovered offshore reserves, the government is eager to reap the profits and pressure to spend is high. But the rapid development of the oil industry and the associated challenges for the government have made it critical to assure investors that a framework is in place to save oil money when energy prices are high. In response, Ghana launched its sovereign wealth fund last year. Africa now accounts for 14 sovereign wealth funds – Angola, Botswana, Nigeria, Libya and Algeria have them in place, and Tanzania will soon follow.
Third Measure: Governments pay off their debt
Debt dynamics have been driving global economic change over the last decade, not least in Africa. Overall, the benefits of debt relief and sustainable debt management are persisting. African governments are servicing their debt and borrowing responsibly. Debt stock ratios – which fell dramatically with debt relief – have risen only slightly since, and “debt-distress” risk ratings prepared by the World Bank and the IMF have improved markedly. The number of African countries rated as high-risk has halved since 2006 (from 18 to 9) and low-risk ratings are becoming the norm (from 5 to 13). Nigeria, South Africa, Namibia, Senegal, Cote d’Ivoire, Gabon, Ghana and Zambia are all issuing sovereign bonds on international markets and getting high levels of international investor interest as bond buyers seek higher yields than in the US and less default risk than in some Asian economies. Last year, Senegal issued its second sovereign bond, breaking new ground by successfully concluding a joint bond issue and exchange.
But risks remain high, especially for fragile states. Some emerging African economies have exceeded the globally acceptable benchmark of a no higher than 30% debt to GDP ratio, over which debt burdens become over-bearing. The IMF has warned that the build-up of public debt levels in South Africa since the global financial crisis is now a constraint on the government’s fiscal space as additional debt accumulation will likely raise funding costs. South Africa’s debt to GDP ratio for 2012-13 is 40%. Ghana’s ratio stands at 41%. Nigeria‘s ratio of 18% is relatively low, but, in contrast to South Africa and Ghana, a large portion of this debt has been used to plug holes in its budget rather than on capital projects. Kenya continues to be one of Africa’s debt success stories: in 2003, the debt ratio stood at 60%, declining to 40% by 2008 through prudent fiscal policies, economic reforms and sound budget management. Its debt currently stands at 45%, but is on track to return to 40% by 2014.
Fourth Measure: An audit of the government’s budget execution is done on time and made available to the public
The budget audit closes the accountability loop by giving an authoritative account of whether the government’s reporting of how it raised taxes and spent public funds during the budget year is accurate and whether it has complied with financial management laws and regulations. Budget audits are a key deterrent to corruption as they provide a means for public scrutiny during budget evaluation phases and, when published, promote a sense of trust in elected representatives.
The Open Budget Survey rates South Africa one of the world’s top performers, both on audit reporting and broader budget transparency. The government gives citizens a full picture of its plans for taxing and spending, publishing all key budget documents and an understandable citizen-friendly version of the official budget. Budget audits are published on time and online. The country’s budget framework creates disincentives for misappropriation of public funds and formalizes the participation of citizens in the budgeting process, developing a sense of ownership of outcomes through collective decision-making and helping ensure that expenditures are better directed towards pro-poor programs.
Uganda and Ghana – East and West Africa’s top performers – are also producing and publishing comprehensive audit reports, although their timeliness is problematic. Liberia’s audit institutions have been exceptionally active in promoting budget accountability, publishing audit reports on time and issuing press releases to signal their submission to parliament. The audits are discussed with citizens in public hearings and open forums all over the country, and are made available in schools and public libraries. Liberia’s legislature has also enacted a Public Finance Management Law that lays down the budget system to be followed by the government, and approved a law that limits the amount of funds the executive can transfer from one administrative unit to another at its own discretion. But Liberia’s story is not common. An ongoing problem across the continent is the limited time given to parliaments to look over budget proposals and audits, and limited powers to amend or challenge them.
Conclusion
Strong accountability institutions – parliaments, audit institutions, civil society organizations and the media – are essential to maintaining a connection between citizens and the public purse, and to ensuring that resource revenues are invested in social sectors that help secure better development outcomes. A broken connection enables diversion of public revenue from the policies they’re intended to finance and the services they’re supposed to deliver. This diversion, whether through misappropriation, embezzlement or plain inefficiencies, thrives when transparency and accountability are weak.
On a positive note, we’re seeing an emerging trend in Africa toward the adoption of practices that make it easier for citizens to follow public money and track spending results. South Africa, Ghana, Liberia, Tanzania and Kenya are all members of the new Open Government Partnership – a multilateral global initiative to promote compliance with open governance standards – and they’re showing commitment to strengthening their systems and opening up their practices to public oversight. But many African governments are still resistant to this trend. Whether they can remain so, in the face of citizen pressure to reform and in the wake of mass protests against corruption and the persistent lack of economic opportunities, is the question. As owners of their countries’ extractive resources, citizens are demanding their rights to profit from them. Public information and government accountability for what resources are available, how they’re spent and what results they achieve are the best guarantee that a country’s resource wealth will translate into lasting benefits for its citizens.
An Extractives Transparency Milestone for Tanzania
3.5 billion people live in resource-rich countries but many are not profiting from these resources. Weak governance is leaving countries “cursed” by conflict and corruption. The Extractives Industry Transparency Initiative (EITI) was created to help change this. The EITI’s globally developed standard promotes extractives revenue transparency by calling for the full publication and verification of company payments and government revenues from oil, gas and mining.
Tanzania has just reached an extractives transparency milestone. On 12 December, the EITI declared Tanzania compliant with its standard. Tanzania joins 9 other African countries with EITI compliance status. The Tanzanian government is now obliged to produce annual EITI reports that disclose and reconcile all revenues from the extractives sector. Independent audits will indicate payments made to governments by companies and payments received by governments from companies.
A gold miner in Shinyanga, Tanzania
Regular monitoring of government and company performance will beam a spotlight on a sector that is traditionally opaque, opening its operations to the public and empowering citizens and oversight institutions with information about extractives financial flows that will enable them to hold governments and companies to account. Tanzanian citizens, journalists and parliamentarians will be able to play their part in monitoring government and company performance and preventing corruption, misuse of public resources and illicit capital flight. Compliance with the EITI is an essential step towards opening the entire extractives supply chain – from how access to those resources is granted, to monitoring operations, to collecting taxes, to sound macroeconomic management and distribution of revenues, and to spending resources effectively for sustainable growth and poverty reduction.
This milestone is timely. 79% of Tanzania’s population lives below the poverty line. The current commodity price boom represents a unique opportunity for the government to mobilize home-generated wealth from its natural resources to tackle the country’s socio-economic development challenges. Improved transparency in the management of revenue from these resources will be critical to Tanzania’s growth trajectory.
The EITI’s endorsement will also be sending a clear signal to investors that the Tanzanian government is committed to open management of its extractives sector and to making itself more accountable for the use of revenue that it manages on behalf of its citizens. The Tanzanian EITI multi-stakeholder working group of government, civil society and company representatives, which is overseeing the country’s EITI reporting, will continue to help build partnership and trust between different stakeholders, and to give civil society a critical voice in the extractives resource management process.
The EITI and Tanzania’s compliance with its standard is not a cure-all for the massive problems and leakages plaguing the extractives sector. It is, however, an important starting point for progress.
The Beginning of the End? Why the World is Off-Track on AIDS but 2013 Gives Us Hope
I still remember how I felt on World AIDS Day one year ago: filled with hope. I spent the morning listening to celebrities, CEOs, faith leaders, members of Congress, and three US presidents do something rare: agree with one another. What was even more inspiring was that the bold vision they all touted in their remarks —“the beginning of the end of AIDS”— for the first time no longer felt impossible, coming off a year filled with new scientific data suggesting that we had the tools to finally begin breaking the back of the pandemic.
I also remember how I felt after the International AIDS Conference just seven months later: deflated. The Conference was full of dignitaries and speeches, but at the end of the week, I felt a sense of rhetoric fatigue. There was so much talk of turning the tide on AIDS, and yet it still felt challenging to point to what world leaders were doing differently, and how they were moving the ball forward.
So this year to commemorate World AIDS Day, ONE took a hard look at how much progress the world has actually made on AIDS and analyzed which countries had been leaders and laggards in the fight. Our new report, “The Beginning of the End? Tracking Global Commitments on AIDS”, shows that although significant progress has been made, if we maintain the status quo on treatment and prevention, we won’t see the beginning of the end of AIDS until 2022. Not exactly a message of hope.
Some of the largest hurdles to achieving accelerated progress on this vision are a lack of resources and coordination. Set against a $6 to 8 billion annual AIDS financing gap, the report finds huge variance among donors’ contributions. Countries like the United States have led the way in funding, political rhetoric and strategy development; others, including many in Europe, are contributing significant resources, but could contribute more financially and politically. Many donors still do not have strong global AIDS strategies to focus their investments, and this has led to gaps in the global response, with no clear sense of responsibility for achieving the broader UN political targets on AIDS agreed in 2011.
Encouragingly, low- and middle-income countries are for the first time contributing more than half of the global resources for AIDS, but there, too, is still much room for growth. In particular, as of 2010, only four African countries have met their Abuja commitment of spending 15 percent of their national budgets on health, and 13 countries would need to double, triple or quadruple their spending to achieve the commitment by 2015.
Yet I still have cause for hope on World AIDS Day 2012, because 2013 will provide a number of key moments at which stakeholders can signal how serious they are about achieving the beginning of the end of AIDS. The Global Fund’s fourth replenishment meeting in 2013 offers donors, both traditional and new, the opportunity to reinvest in the Global Fund’s critical work. Strong support will signal confidence in the Global Fund’s new funding model, designed to more consistently target resources towards countries with the highest burden and the greatest need. With sufficient new resources, the Global Fund will be well positioned to deliver significant results toward the beginning of the end of AIDS.
In 2013, global leaders will also discuss a new post-2015 global development framework. As leaders debate this framework, they must not lose sight of the current set of Millennium Development Goals (including MDG 6 focused on AIDS and other infectious diseases), and should adopt more of a “war room” mentality in getting the job they’ve already committed to done by 2015.
Without scaled-up financing, more targeted programming and expanded political will, the beginning of the end of AIDS will remain a distant ambition. But with concerted action, the world can chart a course towards ending this pandemic.
To help make this transformation real, we need your help in creating a sense of urgency and asking leaders from around the world to step up. Please sign ONE’s AIDS petition, post a surprising fact you learned from this report on Twitter or Facebook, or download the e-reader version for your favorite global health-loving family member this holiday season.
- Previous Posts Older Entries
- Next Posts
 |
 |
 |
About the Blog
The International ONE Blog is a daily log of the anti-poverty movement. The site is operated by ONE staff, with guest contributions from ONE volunteers, members and allies.
The content of each post and each comment represents the views of that author and does not necessarily reflect the views of ONE. ONE does not support or oppose any candidate for elected office, and any post expressing support or opposition for a candidate is not endorsed by ONE.
TAGS: David Cameron, G8 Summit, Policy News, Transparency