Nepad, Peer Review & SADC: Opportunities for Reform

Ayesha KajeeResearcher/Seminar ManagerNepad & Governance Project

The SAIIA Nepad Project

• Three year Nepad Research Project

• eAfrica Journal

• African Network Interested in Nepad

• Civil Society Database

• Research and Conferences in Support of Reform

What is Nepad?

• Framework• Philosophy• New way of dealing with the world• An organisation• A programme• Projects

African Union

NEPAD

MAP

OMEGA

NAI

Sirte Summit

Lome

Lusaka

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NEPAD Contents

4 Initiatives:– Peace & Security, Democracy and Governance– Economic and Corporate Governance– Capital Flows– Market Access

6 Sectoral Priorities:– Bridging the Infrastructure Gap– Human Resource Development– Agriculture– Environment– Culture– Science and Technology Platforms

NEPAD: A Simpler Definition

• NEPAD Is FIVE Things:1) Joint Negotiations/Pressure on the World2) Re-organising Continental Institutions3) Driving Regional Projects4) Learning How to Solve African Problems5) Managing Delivery

• At THREE Levels: – Continental, Regional, and National

Why the Definition Matters

• 2 views of Nepad: All Bad /All Good

• Opens space for public conversation– What is working– What is not working and why– It would be nice if the world were more fair

and Africa had more resources, but how can we do better with what we have

The Simplest Definition

Nepad = Reform

Reform = Changing How Africa Does

Business at Every Level

Hope and Caution• Progress in individual African countries

– In 2002, 14 African countries experienced > 5% growth

BUT• it will take Sub-Saharan Africa

– until 2129 to achieve universal primary education, – until 2147 to halve extreme poverty and – until 2165 to cut child mortality by two-thirds

• Economies have not grown • 1/2 Africans live in extreme poverty • 1/3 live in hunger, and • 1/6 of children die before age 5 – the same as about 10

years ago

Sources: World Bank and UNDP HDR

Where did aid to Zambia go?

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Notes: Sources for Aid (Overseas Development Finance) data: World Bank and OECD. Sources for Per capita income -Summers Heston. Data are five year moving averages ending at date shown

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Theory and Reality

• Peer Review is where Nepad theory becomes real at national level

• Its existence is changing governments• Will test the sincerity of AU and national

rhetoric

The AU Context• Credibility issue• Recognition that cannot afford another

failed state• Chronic under funding at OAU, now

much larger, more activist agenda• Tension between pro-reform and

retrograde states• Peer review is awkward compromise

Peer Review Mechanism

• Non-Political Think Tank-type

• Evaluate both Economic and Political

• Share/Advise on Best Practice

• 3-5 Year Cycle, 6-9 Months per Review

• Ad Hoc Intervention Between Reviews

APR Structures

• Expert Review, Peer Intervention

• APR Forum = Heads of Participating States

• Panel of Eminent Persons

• APR Secretariat: – 20 staff, 2-3 researchers per subject– Relies on partner institutions/AU

Five Stages of Peer Review

1. A) Country Establishes • APR Focal Point• Prepares National Action Plan• Completes Self-Assessment QuestionnaireB) APR Secretariat Prepares • Background Document• Big Issues Document (Use Partner Orgs)

2. Country Review Team Visit3. Review Team Drafts Report, Shares with Govt4. Panel of Eminent Persons Reviews Report,

Makes Recommendations to APR Forum (heads of state)

5. Final Report made public

Peer Review Structures

National Focal Point

Government

Civil Society Panel

APR Secretariat

Eminent Persons

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APR Secy arranges Technical Assess-ments on big issues.

Reports to APR Secy and country.

APR Secretariat: Background Paper

The Planned Process

Prelim APR Visit & questionnaire to Participating Countries

Country APR Focal Point

Country drafts Programme of Action (POA)

APR Secy updates issues paper based on tech assessments

Country updates POA if needed

Country submits to APR Secy

Country submits Final POA adjusted based on CRV

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Potential Intervention Points for Parliamentarians and Regional Bodies

Country self-assesses-ment

APR Secy Develops Big Issues Paper

Issues paper may identify issues requiring more in-depth analysis thru Technical Assessments

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APR Secretariat: Background Paper

APR Secy arranges Technical Assess-ments on big issues.

Reports to APR Secy and country.

APR Secy Develops Big Issues Paper

Issues paper may identify issues requiring more in-depth analysis thru Technical Assessments

Country self-assesses-ment

Country drafts Programme of Action (POA)

Country APR Focal Point

Key Questions

• Questionnaire focuses on what law says not what actually happens

• Corruption is not an accident

• Can we build new model of politics?

• The risk to Africa’s reputation

Tensions Within APRM?

• Can One Process Handle Both Reformists and Retrogrades?

• How to Conduct Review?

• Compliance vs Offering Best-Practice Advice

• Questionnaire vs Expert-Based

• Too Little Time, Too Few APR Staff

Aspects of NEPAD & APRMPOSSIBLE DRAWBACKS POSSIBLE ADVANTAGES

1. Loss of Sovereignty 1. Further improved governance

2. Dilution of priorities; stretching limited resources (human, other)

2. Increased credibility of policies

3. Identification with ‘inferior’

group.

3. Improved regional neighbourhood

4. Neo-liberal policies 4. Promoting Diversification

5. Imposed, not truly African 5. Mobilization of Resources

Source: Hansohm, 2003

Doing Business in Africa- The Corruption Conundrum

• Every study consulted in this report, as well as eAfrica’s own research, concluded that corruption is one of the top issues holding Africa back.

• Across Africa, 52% of business organisations told eAfrica that it would be necessary to pay bribes to open a business, with 1 in 7 reporting that bribes would have to be paid more than twice.

• In African Elite Perspectives on AU and Nepad, respondents in all countries except Senegal said fighting corruption should be a top-three AU goal (Senegal ranked it fourth) behind encouraging trade.

• The World Economic Forum noted that ‘the enterprises from developing and transition economies included in this year’s survey single out corruption and excessive bureaucracy among the top constraints to their business operations, while respondent firms from the OECD single out excessive bureaucracy and the tax regime.

Doing Business in Africa

• Doing Business in 2004, the most detailed examination of government institutions affecting business, found many small, but easily fixable problems contribute greatly to economic stagnation. Take courts, for example. The ability to swiftly and fairly settle commercial disputes is missing in much of Africa, which not only allows white-collar crime to go unpunished but also scares off foreign investors who fear that if a dispute arises there will be no way to enforce business contracts.

• Infrastructure is expensive, but failure to maintain it costs far more. Maintenance has routinely been a condition of aid grants and loans, but African leaders have tended to ignore it, favouring current consumption over the care for current assets. We have to ask why. As far back as 1994, the World Bank observed that the ‘timely maintenance of $12 billion would have saved road reconstruction costs of $45 billion in Africa in the past decade.’

Africa’s Top Priorities: What The Surveys Say

Commonwealth Business Environment Survey 2003: ‘The top 3 barriers to investment: corruption; policy instability; and inadequate infrastructure.’

World Bank Doing Business in 2004: ‘Heavier regulation is generally associated with more inefficiency in public institutions – longer delays, corruption, less productivity and investment.

•World Economic Forum Global Competitiveness Report 2004: Quality of public institutions, the macroeconomic environment and technology are the key ingredients of national competitiveness.

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UNIDO Foreign Direct Investor Perceptions in Sub-Saharan Africa 2003: ‘Political stability and economic stability were most important to foreign investors, followed by country legal framework, investment-climate transparency, quality of infrastructure, low labour costs and skilled labour availability.’

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African Elite Perspectives survey 2003: Elites in seven African countries were asked to rank the top obstacles to Africa. All included political instability and corruption among their top three obstacles. Zimbabwe, the one exception, put political instability, poverty and debt as the top issues.

Getting Africa Growing: A Priority List

• Fight corruption at all levels – Reform legal institutions– Safeguard ownership

• Improve The Business Environment– Adopt Africa-wide deficit-reduction targets– Remove trade bottlenecks– Build one-stop investment centres– Eliminate restrictions on the movement of skilled labour – Reform education

• Emphasise Infrastructure– Accelerate privatisation or management concessions– Prioritise maintenance

SAIIA Resources

• eAfrica: www.wits.ac.za/saiia/online

• Mailing List

• APRM Toolkit: www.wits.ac.za/saiia/toolkit– What the Standards Say: Constitutional

Structures, Political Systems, Rights, Good Governance

– Draft APR Questionnaire

The South African Institute

of International Affairs