Your Excellency, Chairman of the Council of State,

Excellencies

Members of the Diplomatic Corps

Honourable Ministers

Distinguished Delegates,

Colleagues All,

I am particularly happy to greet you at the start of a most promising exercise centering on country presentations on governance for a progressing Africa. The collaboration of the Governments of Norway and Switzerland, the European Commission and the Government of Ghana is one which the Economic Commission for Africa (ECA) is pleased to join – along with our United Nations colleagues from UNDP and the Department of Economic and Social Affairs (DESA). As most of you know, this initiative on governance is part of the larger United Nations System-wide Special Initiative on Africa which is an unusual mobilization of the UN system to work more intensively with Africa on its development.

There is a standard way to address a forum on governance in Africa. One needs to say very favourable things about accountability, responsibility, transparency and participation. It is also good to speak about the state creating an enabling environment. Having said these things one earns polite applause and can sit down having done one's job.

I intend to avoid this approach. Rather, I would first like to underline where I see governance in the increasingly optimistic forecast for Africa's future.

All of us here today subscribe to the principle that good governance is essential for the political and economic transformation of Africa. Our leaders and the citizenry are all too well informed that democracy and its accompanying rights and obligations, are the ultimate guarantors of all the reforms we shall discuss here. Indeed, after a long period, when states were stagnant and regressive, Africa is now enjoying a democratic transition and momentum for improving the state and governance. The spread of information technology, the prospects for dramatic improvements in health, the rise of civil society and the gender revolution, and the rise of more responsive and progressive governments are all good reasons why we can plan our future on this continent with extra boldness.

These factors are not stand-alone phenomena. They interact with each other. For example, the rise of civil society and gender awareness are helping to transform political cultures, and, I dare say, the rapid spread of information technology and improvements in social indicators will also play their roles in transforming the composition and capabilities of electorates and civil society leaders. Yet, governance is perhaps the most critical factor. Governance gone wrong impedes progress, while governance done well accelerates progress.

A noted political analyst recently observed that most of the states in post-independence Africa have been of four types. First, the patrimonial state in which government officials treated the state as their own property, a state in which the national bank and the personal bank of the president tended to be the same. Second, the predatory state which sees its citizens only as prey for its rapacious greed. Third, the shadow state in which informal political networks ran a shadow economy of largely illegal activities. And fourth, the collapsed state in which people were left to their own devices. Together, these four kinds of states have given us a post-independence history of repression and dispossession, far from the rhetoric of our constitutions and the promises of our founders.

None of the countries making presentations here are satisfied with that past; the countries here are seeking a different future. But there are lapses along the way to what are commonly stated aims. Indeed, where these lapses occur, we can have a fifth kind of state; where leaders impose sufficient repression to keep their opponents weak and maintain their own power, while adhering to enough democratic formalities that they might just pass themselves off as democrats. Recent developments in Nigeria, which is one of our continent’s most important actors, provide the opportunity for that country to move into the mainstream of the democratization process and avoid becoming a state that fits this fifth categorization.

The ten countries in this meeting seem to me to be heading towards states which have four attributes: the state as a political order, the state as a system of laws, the state as the embodiment of the nation, and the state as the property of the people.

What is clear is that although democracy is a difficult process that requires vigilance and constant nurturing, it is absolutely essential to good governance. The issue for us in Africa is not whether to democratize, but how and how soon.

We in Africa have a little bit of a history of excusing ourselves from genuine democracy. I think we must do all we can to end that particular historic trait. Democracy, its accompanying rights of expression and other freedoms are the ultimate insurance of all the reforms we shall discuss in this Governance Forum. There is no substitute. Reforms to bring more genuine democracy should overcome winner-take-all elections, end legal and material constraints to forming and running political parties, and end state repression of the opposition. On their part, opposition parties and movements should recognize their important role in the political spectrum, and work towards reforms in a responsible and accountable manner. In Africa, the ruling and opposition parties should stop regarding each other as enemies.

At a recent forum in Addis Ababa on Governance organized by ECA and DESA, former Tanzanian President Julius Nyerere decried the alarming phenomenon of ruling groups tampering with constitutional provisions that limit the terms of their leaders so as to allow for increased tenure. He pronounced himself to be unequivocally against this trend, of which there are some examples in Africa. On the other hand, some of our leaders have shown real determination and courage in insisting they will serve for only as long as their respective constitutions allow. Such leaders should be applauded, and I would like to take this opportunity to single out His Excellency President Jerry Rawlings for being so unequivocal on this issue.

Madame Chairperson,

Accountable and transparent systems, political liberalization, the rule of law and respect for human rights are the bedrock of a democratic state. But democracy is not sufficient to assure the governance structure a modern state requires. A capable state must be crafted carefully, and we must learn from each other what works under what conditions. While the ends of the capable state seem clear to all, the means are an art form.

What can we say about this art form of creating a capable state for a progressing Africa?

• First, in order to ensure sound economic management we need to create a leaner, more competent and effective public service predicated on meritocracy, the end of impunity, greater promotion of professionalism and the enforcement of a rigorous code of ethics;

• Second, we need to strengthen the institutional capacity of Parliament and its legislative committees, enabling them to play their checks and balances role effectively and to enhance the skills of legislators;

• Third, we should enhance the independence of the judiciary, in particular by promoting its financial autonomy;

• Fourth, we need to build the capacity of our electoral systems to enhance their ability to organize free, fair and transparent elections;

• Fifth, we need to create collaborative mechanisms to promote dialogue and narrow differences between the opposition and ruling parties to enhance the national interest;

• Sixth, reviving the collapsed state is a special challenge for several states on this continent, ranging in size from Liberia to the Democratic Republic of Congo; and

• Seventh, corruption is an especially ingrained disease which requires very special actions, and probably a new set of tools.

Of these seven, let me speak briefly on the two themes that are cross-cutting - the first having to do with sound economic management, and the second zeroing in on corruption.

In the realm of sound economic management, the obligations of the capable state are many: ensuring a stable macro-economic environment; designing and implementing poverty-reduction policies; successfully convincing the political leadership of the urgency to act on key policy matters affecting the economy; and providing space for all stakeholders to contribute to and benefit from the nation’s economy. The focus on economic governance can therefore not be complete without addressing issues of public expenditure allocations, civil service reforms, public sector retrenchments, capacity building based on merit and code of professional ethics; transparent and accountable resource mobilization and tax administration.

Madame Chairperson,

A lot has been said about Africa’s good economic performance in recent years. In 1996, economic growth was around 5 per cent, with 31 countries showing growth in excess of population growth rates so that per capita GDP was positive. During the period 1995-96, 32 countries grew faster than the previous three years, with only two experiencing negative growth. Fiscal and current deficits have been sharply reduced in several countries, while substantial progress has been made with monetary stabilization and in inflation reduction. As a result of these positive changes, Africa is higher on the development agenda in terms of new investment and trade. This era of optimism is due to improved economic policies based upon hard lessons learned in the past two difficult decades, and, in many cases, on more pragmatic leadership.

The grounds for this optimism are examined in a study produced by the Harvard Institute for International Development in association with the World Economic Forum. The 1998 Africa Competitiveness Report seeks to measure the competitiveness of 23 African countries based on estimates for their medium-term economic growth. The study calculates overall competitiveness based on an average of six indices: openness, government, finance, labour, infrastructure and institutions. ‘Competitiveness’ is the main Index, while two additional indices – on ‘Improvement’ and ‘Optimism’ – seek to show the attitudes of business communities to the much-vaunted reforms and growth on the continent.

The results of the study make it clear that the optimism about Africa’s economic prospects is conditional on good governance and good leadership. It highlights the way that sensible economic and political management allowed Mauritius and Botswana to move forward, from poor to middle-income status. At the top of the list of specific reforms of greatest interest to the business community were: political and policy stability, openness to trade, transparency between business and government, and improved infrastructure. In contrast, the factor impairing the ability of businesses to function most severely was found to be corruption.

Madame Chairperson

This brings me to the second of the cross-cutting issues I mentioned earlier. Corruption is the antithesis of accountability and transparency, which form the subject matter of this Forum. Corruption is both a governance and a developmental issue. It impedes development and minimizes the ability of governments to reduce poverty. It hampers the effective delivery of public goods and services. By reducing the amount of public resources for development, it limits economic growth, discourages private investment and saving, and impedes the efficient use of government revenues and development assistance.

We have often been told to look to Asia for economic lessons. Well, friends, I now look to Asia, an Asia with a lot of lessons for us and many of them are positive. But this recent economic crisis is about corruption. It is about corruption in the private sector extending credit beyond any reasonable possibility of repayment. It is about corruption in the public sector where banking regulations were purposely weak and even then not enforced.

The impact has been dramatic. In Indonesia, GDP is estimated to decline this year by some 15 per cent. This will involve tens of millions of people who had just managed to climb above the poverty line now falling below that line.

We now have sufficient analyses showing that corruption has a negative impact on all those indicators we care about in development – economic growth, domestic and foreign investment, and poverty. Given its relative poverty and scarce resources, Africa can least afford the effects of corruption.

If we look at the question of capital flight, for example, we see why the perception of Africa as a risky environment in which to do business is so difficult to shake off. It also gives us a strong indication as to how much illegal wealth is siphoned from the continent, and as such an insight into how corruption can impede economic growth and stability. Recent research shows that we Africans have transferred a staggering 37 per cent of our wealth outside the continent. The comparable figures are 29 per cent in the Middle East, 17 per cent in Latin America, 4 per cent in South Asia and 3 per cent in East Asia.

Therefore, we must take extra measures against corruption. There are the tried and true prescriptions: a robust civil society, watch-dog functions like civilian review boards and audit functions, transparency in decision making, accountability through stiff penalties for malfeasance whether by public officials or private officials attempting to subvert the public good, and checks and balances in systems big and small.

Here, let me say a few words about the pivotal importance of a free and responsible media in Africa. Media pluralism is becoming entrenched in Africa, with a mushrooming of private newspapers, radio and TV stations. Yet the media remains fragile, with issues of censorship and intimidation often conspiring to stifle this important arm of civil society in a number of our countries. Statism is manifest in the slow pace at which control over the means of communication is being relaxed. It is a fact that effective, responsible and balanced journalism is the enemy of corruption. That being the case, surely it is in the interest of governments wanting to eliminate corruption to create and maintain enabling environments for the media to flourish and operate.

Madame Chairperson

The difficulty with so much of what we have to do is that the processes of development and entrenchment of new systems and functions takes time. Meanwhile, the political clock is ticking and people are asking, "What is new here?" Maybe this calls for a strategic approach to reform – involving on the one hand a systematic, step-by-step, brick-by-brick building of systems, and on the other a purposeful delivery of a selected group of quick-win, high-profile reforms. For example, any government which can quickly clean up its customs service and get new books to the schools on time will earn enough goodwill to last the years necessary to carry out more predictable and painstaking reforms. I will listen particularly closely here to your case studies so as to get advice on political strategies to gather support for enduring reforms.

For ECA, what is the way forward? In collaboration with our partners, particularly UNDP in the context of the Special Initiative on Africa, ECA plans to build on its past work in promoting the capable state – where we have focused on advocacy, advisory services and capacity building for policy analysis and economic management. ECA plans to broaden and refine its work programme in governance to include the development of qualitative indicators for monitoring progress towards good governance among African countries.

One of our new initiatives, now in proposal form, is entitled "Setting Goals and Monitoring Progress in Governance in Africa." The objective of the project is to compile and develop norms of good governance, and to codify and evolve a set of indicators for monitoring incremental progress by African countries toward agreed-upon codes of good governance. ECA strongly believes that the existence of such codes is a necessary first step for governments to close off the channels through which corruption usually proceeds. Among other things, the codes will address the critical areas of government procurement, customs and tax administration, business licensing and regulation, the allocation of government subsidies, and the administration of government resources.

On the basis of this work, ECA will periodically produce the ‘African State of Governance Report’, aimed at promoting and disseminating good governance practices as a way of encouraging others to pursue similar measures.

It is traditional at the end of these kinds of presentations to invoke the need for donor cooperation. You know as well as I that the World Bank, IMF and the bilateral donors have all pronounced strongly on these issues, often in the conditions of official agreements. One may wonder why. A prominent international news magazine provided the answer, perhaps somewhat inelegantly when last week it stressed that donors "… cannot afford to carry on like the piano player in a brothel who pretends not to notice what is going on upstairs." This being said, I believe that while donors can help us along in Africa, our governance agenda must not be driven by outsiders. This area should be first and foremost Africa’s own responsibility.