Memorandum submitted by Transparency International
OVERVIEW
1. TI considers the African Development
Bank (AfDB) to be uniquely positioned to draw on regional and
international experience to support governance reforms vital to
the social and economic development of its Regional Member Countries
(RMCs).
2. The AfDB, unlike the World Bank, provides
the Governments of African countries a strong voice in all decisions
of the Bank. More than any other financial institution supporting
the region, the African Development Bank has the potential of
genuinely reflecting the voice of citizens in African countries.
3. TI considers this to be single most important
comparative advantage of the AfDB. It confers on the AfDB the
opportunity and responsibility to demonstrate that it is guided
by the concerns of citizens in taking decisions on both the content
and process of its development support to RMCs. RMCs in turn have
the opportunity to include their citizens and political representatives
at key decision-making points to ensure that the support provided
by the AfDB reflects their priorities.
4. The AfDB has an expressed commitment
to elevate the quality of governance to the top of the region's
development agenda. A coordination of its efforts with regional
initiatives such as the NEPAD/APRM process positions it well to
support learning between its member countries in the region.
5. The proportion of today's official bilateral
and multi-lateral lending to Africa from the World Bank, AfDB
and OECD countries has significantly diminished compared to that
of total foreign lending in the 1970s. New lenders with commercial
interests have appeared instead: China, Kuwait, Saudi Arabia,
India, Brazil and the United Arab Emirates.
6. AfDB could lead the international agenda
in setting and implementing transparency and accountability standards
in lending for development and private sector investments. In
doing so it would minimize the risks to sustainable development
and good governance inherent in the diversified sources of credits
and investments for RMCs. The AfDB, where it acts together with
other MDBs and donors, would then still in a position to contribute
to institutional frameworks that determine whether commercial
lending and investments benefits citizens and reduces poverty
in RMCs.
7. TI points below to some specific issues,
where it sees an opportunity for the AfDB to demonstrate its comparative
advantage and lead the international agenda in the region.
SPECIFIC RECOMMENDATIONS
I. Accountability to citizens through transparent
and inclusive decision-making
8. The AfDB is a signatory of the Paris
Declaration and many of the RMCs have ratified the UNCAC. The
AfDB thereby expresses its commitment to ensure aid effectiveness
by ensuring the highest standards of accountability to citizens.
TI considers that the AfDB could support RMCs in advancing on
this objective through directly assisting citizens in playing
a truly informed role in development programmes.
9. From extensive experience available from
other financial institutions on supporting national development
strategies, such as the PRSP processes, the engagement of citizens,
civil society and political representatives has been peripheral
and unable to inform and sustain development investments.
10. The AfDB is well-placed to pioneer a
fund for direct support to citizens and civil society in decision-making
on national development strategies and implementation. This would
allow RMCs to advance on their implementation of UNCAC Article
13[9]
and demonstrate effective citizen participation to other signatories
of the UNCAC.
II. Internal systems and incentives for public
accountability
11. To ensure the greatest effectiveness
of its operations, the AfDB had initiated the process of conferring
more decision-making responsibilities to its country offices.
TI is concerned that this by itself will not increase effectiveness
without a concurrent effort to create spaces for citizens to provide
direct feedback on the relevance and effectiveness of support
provided by the AfDB.
12. While the establishment of AfDB's Independent
Review Mechanism is a welcome initiative, it focuses on adverse
effects of AfDB financing and is in itself not a pro-active instrument
creating accountability to citizens in the mainstream of decision-making.
TI recommends that the AfDB could ensure greater public accountability
through a pro-active policy of informing citizens in the RMCs
of its development plans and provide them with a voice at the
outset of planning processes and during implementation. The AfDB
could consider setting new standards of public accountability
by linking performance incentives for its staff in country offices,
to the degree of informed, institutionalised and inclusive engagement
of citizens and civil society in its decision-making on country
strategies, programmes and during implementation.
III. Specific support to anti-corruption
strategies
13. As part of the initiative of MDBs to
harmonize their policies and lending practices and align them
to country priorities, TI considers it essential that RMCs are
supported in developing high standard anti-corruption policies.
14. The AfDB is particularly well-placed
to lead the harmonisation efforts by MDBs and bilateral donors
and support RMCs in ensuring that anti-corruption efforts are
placed within the mainstream of national strategies. The COMPAS
initiative allows the AfDB to compare itself favourably with other
MDBs where it succeeds in setting benchmarks with committed RMCs.
15. A universal agreement exists on the
link between anti-corruption efforts and the positive impact on
poverty reduction. TI's National Integrity Systems studies undertaken
in a number of countries in Africa recognise that the lack of
political will has rendered most institutions mandated with fighting
corruption largely ineffective in many African countries. 10 The
need to actively engage not only the executive, but also non-executive
stakeholders including the legislature, citizens, civil society,
media, the private sector etc. through multi-stakeholder processes
is recognised as being essential to establish broad-based country
ownership of anti-corruption strategies. The AfDB could consider
direct support to engage stakeholders in multi-stakeholder processes
in RMCs.
16. A central aspect of anti-corruption
efforts is directed at budget transparency. Extensive commitments
have been made by many RMCs on transparent and accountable public
finance management under the UNCAC. These commitments will be
difficult to achieve without technical assistance to support and
monitor progress. The AfDB could establish a separate facility
to both support such efforts as well as include advancements on
the UNCAC as part of its performance criteria for lending.
17. Infrastructure has become a focus of
AfDB lending. This is a sector particularly prone to corruption
if policy and investment decisions are not undertaken through
transparent decision-making procedures. Citizens need to be able
to verify that investment decisions are not influenced by corruption
but have gone through a transparent decision-making process of
comparing options and identifying the most cost-effective and
pro-poor investment decision. This should be the case not just
where the AfDB attempts to minimize social and environmental costs.
Lessons from including citizens in infrastructure projects in
the water sector that create ownership stakes and management participation
particularly on operation and maintenance could inform the AfDB's
procedures.
18. The AfDB has committed itself to supporting
the Extractive Industries Transparency Initiative (EITI). By providing
incentives to those RMCs to follow EITI recommendations, setting
benchmarks and widely publicizing good practice, the AfDB can
create public awareness on the benefits of budget transparency
to poverty reduction.
IV. Public finance management and the role
of parliaments
19. The AfDB, as a signatory to the Paris
Declaration, has committed itself to providing financial resources
in a manner that strengthens good governance, transparency and
accountability in partner countries.
20. In its role as regional bank, led by
RMCs, the AfDB could directly support the capacity of parliaments
to undertake effective budget oversight and report back to the
public on the use of public resources. 11 Revenues from licences,
royalties, investments etc. undertaken through domestic and multinational
enterprises and particularly those from non-renewable natural
resources are part of development resources that should be reviewed
by parliaments in the context of national development strategy
planning and the annual review of budgets.
V. Giving an African voice to the implementation
of existing policy frameworks
21. The current EU Policy Coherence for
Development programme is aimed at aligning European policies on
trade, investment, research etc. to support development objectives.
The AfDB as a regional institution would be well placed to liaise
with African governments and civil society to monitor European
policies in trade, investment, research and other areas to ensure
that they are aligned to the overall objectives of the sustainable
development. The AfDB can also lead and support African governments
and civil society organisations in monitoring compliance to the
OECD guidelines for multinational enterprises.
February 2008
10 Overview: NIS Studies of Southern African
Countries (Transparency International 2007), available at http://www.transparency.org/policy—research/nis/regional/africa—middle—east
11 See TI's policy position on Poverty, Aid &
Corruption brought out in June 2007 on http://www.transparency.org/global—priorities/poverty
9 Article 13 of the UNCAC states in part that each
State Party shall take appropriate measures, within its means
and in accordance with fundamental principles of its domestic
law, to promote the active participation of individuals and groups
outside the public sector, such as civil society, non-governmental
organizations and community-based organizations, in the prevention
of and the fight against corruption and to raise public awareness
regarding the existence, causes and gravity of, and the threat
posed by corruption. Back
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