Good governance key to economic recovery

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The Ibrahim Index of African Governance (IIAG) defines governance as the delivery of the political, social and economic goods that a citizen has the right to, expects from his or her state, and that a state has the responsibility to deliver to its citizens.

BY GEORGE MUSVOVI

A rhetorical question goes: “Will Africa finish the governance business in the short to medium run, or it’s a long run business when we are all dead?”

Will this not impact on achieving the United Nations Sustainable Development Goals (SDGs) in the same way as the Millennium Development Goals (MDGs) in many African countries? This article provides a critical perspective of good governance, values and implications for developing countries in Africa.
The IIAG has calculated the overall governance score for 54 nations in Africa to be 50 out of 100 with 100 being the best index.

The international foundation has ranked Zimbabwe as the worst performer (47 out of 54), a decade backdated to 2009, ahead of strife-torn Somalia and Chad, labelling it the black sheep of Southern Africa.

However, recent findings for almost a decade backdated to 2016 have established Zimbabwe as the most improved country on overall governance, even though it is still occupying position 39 out of 54. This contrasts with countries like Botswana that have been recipients of the Mo Ibrahim Prize.

Of late, “good governance” has increasingly been viewed in development programmes as the key driver of social and economic prosperity.

International Development Institutions (IDI) such as IMF are increasingly basing their aid and loans on condition of “good governance”.

Nigeria and Zimbabwe’s governance records have over the past decade been classified by IDI as “bad” due to the unstable social and economic environment, explaining a breeding ground for unaccountability.
Since its launch, IIAG has been widely regarded as the most comprehensive analysis of African governance.
To construct the 2016 IIAG, the foundation’s research team collected 166 variables that measure governance concepts from 34 sources.
These have been combined to form 95 indicators, 14 sub-categories, four categories, and one overall governance score. In total, there are 237 different measures of governance in Africa.

Key findings for a decade backdated to 2016 is that almost two-thirds of African citizens live in a country in which safety and the rule of law deteriorated for the last 10 years. The 2016 IIAG’s launch reveals that improvement in overall governance in Africa over the past 10 years has been held back by a widespread deterioration in the category of safety and rule of law.

Africa needs to walk the talk on institutional economics, which delineates rules of the game in order to realise economic development and social prosperity.
According to Zimbabwe United Nations Development Assistance Framework (Zundaf), good governance respects fundamental human rights, which are prerequisites for sustainable human development.

Consequently the government of Zimbabwe and United Nations Country Team have agreed to emphasise governance and human rights issues in order to promote economic recovery in the short-term, as well as sustainable human development in the long run. A total budget of US$36 million will be required to support Zundaf.

The Organisation for Economic Cooperation and Development (OECD) says good governance depends on rule of law, responsiveness, consensus, political stability, democratic participation, government efficiency, transparency, accountability and equity/inclusivity and human rights.

To date, countries like Norway continue to provide a shining example of good governance, economic development and social prosperity.
Rule of law denotes a condition where actors, be it public, private or institutional, are equally subjected to laws and regulations measured by various indicators, including military interference and impartiality of courts.

Political stability is an explanatory variable characterised by peace and social order provided by government, measured by percentage of military expenditure to a GDP, violence against civilians, or number of refugees created abroad.

Responsiveness requires that institutions and processes serve all stakeholders within a reasonable time frame. While with equity and inclusiveness, society’s well-being depends on ensuring that all its members feel they have a stake in the mainstream economy and society.

Government efficiency means processes and institutions that produce results meet the needs of society and can be measured by percentage of GDP growth, GDP per capita, external debt, ease of doing or starting a business and inequality.

Community participation, a grassroots offspring of good governance, be it informed, direct, indirect and organised through legitimate intermediate institutions or representatives, is critical.

In Brazil, at least 70 cities have established a participatory budget system which allows citizen participation in decision-making over the allocation of resources.

Obviously, transparency exists where actions can be easily understood while accountability follows as a key requirement of good governance to the extent that institutions and the public can be held responsible for their actions. Who is accountable to who depends on whether decisions or actions are internal or external to an organisation or institution.

With social accountability, citizens and/or the civil society can directly or indirectly enforce regulations governing their societies, while horizontal accountability means the capacity of state institutions to check abuse by other public agencies and branches of government or the requirement for agencies to report. Institutions such as parliament or the judiciary commonly provide horizontal accountability.

Vertical accountability is the means through which citizens, mass media and civil society groups can seek the support of elected representatives to redress grievances and intervene in the case of inappropriate or inadequate actions by government.

Political accountability occurs when parliament holds the executive accountable, while legal accountability occurs when the judiciary holds the executive legally accountable.

However, government alone cannot solve the challenges associated with poor governance.

They must cooperate with corporates, civil society groups, development institutions and citizens themselves.

Good governance makes a country more stable and peaceful by minimising corruption and ensuring that services are delivered to the people.

It is responsive to the needs of society. Ultimately, good governance brings development for the nation.

The African Union’s charter is also up to promoting political, economic and social governance.

The European Union has observed that in Uganda, which is not far removed from what is obtaining in other African countries, including Nigeria; civil society actors, who are ideally expected to play a central role, have not been able to adequately do so.

This is mainly due to the fact that governance is not transparent, but rather secretive and corrupt (Konrad et al, 2016).

The Zimbabwe corporate governance code (Zimcode) a follow-up code to King 111 code and other global bandwagon of codes was introduced in April 2015 in an effort to promote good governance of public and private organisations.

Zimcode guides companies in Zimbabwe to adhere to the code of “Best Practice”. Key to note are companies such as Premier Service Medical Aid Society (Psmas, Air Zimbabwe, and the endless list of failed banks, including Trust Bank, Barbican Bank, Genesis Investment Bank and more recently (2015), AfrAsia Bank (Kingdom Bank) failures were in part engineered by corporate governance ills (Zvavahera, 2015).

The ideal recommendation derived is that, because of the importance of good governance in economic development, a tripartite social contract must be fostered between government, the public and private sectors to avoid decay of economic and social fortunes.

Also key is to ensure adherence to good governance guidelines as defined locally, regionally and globally. Of significance is to decide on the model of implementation, whether to use “comply or explain”, “explain or comply” or “comply or else”. But in my own analysis Africa must use “comply or else . . .” approach for economic agent’s adherence.

Deductively, good governance for African leaders and economic agents might be pluralistic, value loaded, difficult to be achieved in its totality and subjective.

However, we cannot justify ignoring a plague’s solutions because it existed for a century before us.

Actions are still needed in Africa. Good governance remains the bedrock for achieving economic and social prosperity. It is the anchor on which SDGs can be achieved for the economic development and social prosperity of many African countries, including Zimbabwe.

Musvovi is a development economist at the Institute for Sustainability Africa. These New Perspectives articles are coordinated by Lovemore Kadenge, President of the Zimbabwe Economics Society (ZES) Email kadenge.zes@gmail.com and cell +263 772 382 852

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