Sunday, 30 August 2015

A book review: Andrews, Matt (2014) The Limits of Institutional Development: Changing Rules for Realistic Solutions. Cambridge: Cambridge University Press

This book should be read by all those involved in supporting or promoting good governance in the Global South.  It not only demonstrates that the current approach by the donor community is failing, but suggests how a very different approach would lead to much better results.

“The basic story line is that half of 145 countries that have had donor sponsored reforms in place saw declines in indicators of government effectiveness over a recent ten-year period” (page 15).  Why is it that after at least a quarter of a century of spending of billions of dollars and the participation of tens of thousands of consultants introducing ‘global best practices’ that so little has been achieved?

At the macro-level, the problem is capital flight from the Global South to the industrial centres of the world.  In terms of sub-Saharan Africa, a study by many NGOs last year[1] demonstrated that whilst sub-Saharan Africa receives less than $140 billion each year, mainly as loans, foreign investment and aid; nearly $200 billion leaves, mainly as profits made by foreign companies, tax dodging, and the costs of adapting to climate change. The result is that sub-Saharan Africa suffers a net loss of capital of almost $60 billion a year.  So the answer to the question, ‘why has foreign aid not led to economic development in sub-Saharan Africa?’ is that the continent is suffering a significant net loss of capital each year.

This book concentrates on the micro-level and provides extensive evidence that the current approach of using expatriate consultants to introduce ‘best practices’ does not work; even when assessed by the donors themselves, in their own terms. So for example, a study published in 2011 by the World Bank found that fewer “than 40 percent of the eighty countries receiving World Bank support for public sector reform between 2007 and 2009 registered improved CPIA governance scores in that period. A quarter of these countries actually saw such scores decline, whereas more than a third stayed the same” (page 13).

Development agencies are not facilitating development

In my area, public financial management, the donors have a standard set of reforms or techniques (accrual accounting, Medium Term Expenditure Frameworks, Integrated Financial Management Information Systems, programme budgeting, single treasury accounts and risk-based auditing) which are introduced and re-introduced (after earlier failures) over and over again. Whatever the local environment, from Eastern Europe to failed or post-conflict states in sub-Saharan Africa, the technical answers are almost always the same.  These appear to be answers in search of a problem and most often are square pegs for round holes.  But they do work in the interests of both the donors and the consultants involved.  The donors are able to disburse funds against standard outputs and the consultants have an easy life introducing the same reforms from one government to another.

Due to the capital at their disposal and their gate-keeper role, in terms of both the tools and techniques to be used and the consultants employed, the donors are, “increasingly shaping the ideas, opportunities, demand, and supply of public sector institutional reforms in developing countries” (page 7).  Not only do, “generic models dominate the reform agenda of development agencies” but, in addition, these have “a strong neoliberal influence on reform content” (page 7). 

First, the standard institutional reforms, “aim to foster market-friendly governments through interventions like privatization, deregulation, trade liberalization, and… [the promotion of] competitive markets” (page 8).

“Second, reforms aim to create disciplined governments” (page 9). “Ninety percent of the forty sample countries took steps to discipline their public finances and civil service regimes and to streamline debt in the first four years of World Bank–sponsored institutional reform” (page 9).

Thirdly standard techniques or ‘best practices’ are common, for example, “fiscal rules, medium-term budgeting frameworks, and internal audit regimes” (page 10).  As a result, “market-friendly, disciplined, and modernized government… themes dominate more than 70 percent of World Bank-supported [administrative reform] projects” (page 11).

This approach could be acceptable if it achieved consistent success, but this appears to be far from the case.  Assessments by the World Bank indicate that, “Public financial management (PFM) scores improved in 62 percent of countries after such reforms but stagnated or fell in nearly 40 percent. Corruption, transparency, and accountability scores improved for 53 percent of the nations with public sector reforms, remaining static or declining in 47 percent” (page 213). Recent evaluations “reference the way many reforms ignore context, for instance, promote demanding best practices, and fail to establish broad country-level ownership”  (page 213/4).  In many cases governments may introduce institutional reforms in order to impress the donors and so gain further funds in the short-term, but such reforms are necessarily accepted and so may not result in improved governance.

A new approach is needed

Matt Andrews advocates a new approach that he terms Problem Driven Iterative Adaptation (PDIA). This “calls for interventions that address context-specific problems through stepwise processes of purposive muddling by broad groups of mostly local agents” (page 228).

Problem Driven Iterative Adaptation -type reforms have “three key dimensions: (i) They facilitate problem-driven learning; (ii) they involve stepwise interventions that allow processes of purposive muddling and action-based learning, which helps change agents see what works, why, and what next steps they should take; and (iii) they engage broad sets of (mostly local) agents providing different functional contributions that ensure reforms are viable and relevant” (page 216).

First we need to identify the specific problems that the institutions face.  This needs a detailed understanding of the current environment and the key challenges, weaknesses and capabilities of the local institutions.  In most cases this will involve a key role for local civil servants who have the intimate knowledge of their organisations, systems and processes that can only be gained by working within the organisations for several years.  Consultants may have a role to play, but the local experts must lead and really own this process. Their views have to be respected and carefully listened to.  But even when using local officials, “it is important to choose those who have not mastered the art of isomorphic mimicry and reforms as signals” (page 231).  The current reform approach supports a specific modernisation paradigm which in reality consists of neoliberal economic policies and New Public Management styles reforms which have had questionable success even in their home countries.  Problem Driven Iterative Adaptation requires all concerned to concentrate on the local specific problems and not to have been hood-winked by the questionable benefits of the standard reform tool-kit.

Second reforms should build, on and not replace, current techniques, processes and expertise.  Major reforms inevitably lead to reduced effectiveness and control, at least in the short-term.  We need iterative reform addressing key, specific weaknesses in existing systems. “All manifestations of good, better, or best practice should be subjected to stringent tests” (page 230). “It is extremely difficult to imagine change toward a PDIA-type approach in the presence of processes that incentivize actors to focus on large, pre-programmed, solution-based projects” (page 230).

Problem Driven Iterative Adaptation is about building adaptive capacities to change in developing countries.  This is an essential capacity for any institution, but is critical in many of the public sector institutions of the Global South which are still dominated by centralised and hierarchical bureaucracies which face fast changing environments not least because of the demands of climate change.

We need to ask simple questions of reforms.  “Are new problems being identified and constructed, using data, to provoke action? Are stepwise reforms being introduced to address problems, or are they building on prior steps? Is there evidence of short-term lessons about what works and why? Are reform communities being developed, combining agents providing the functions necessary to achieve change? The idea is to reward developing country governments for gradually becoming more functional and adaptive” (page 228/229).

The international financial institutions and the bilateral donors have a major role in recognising that the current approaches are not working – they must start to allow and introduce alternatives.  “More flexible, problem-driven funding streams could be provided to allow problem identification and stepwise implementation” (page 230).  A key step needed to facilitate significant change involves changing the money rules in development. Certain reforms are still implemented as a condition or to comply with donor recommendations.

This book is an important step in re-thinking the rules for institutional reform across the Global South.  Another world is possible, but donors have to ensure that, based on a recognition that the current approach is not working, that they change the rules of the game.  We need a paradigm shift from the easy introduction of standard ‘best practices’.  We need to move to an approach that is based on iterative and incremental reforms, addressing key local challenges which are led by local officials who have not been seduced by the questionable benefits of the currently fashionable standard reform agenda and its neoliberal overtones.




[1] Health Poverty Action et al (2014) Honest Accounts? - The true story of Africa’s billion dollar losses
http://tinyurl.com/pn33q3e

Inequality and Corruption are Two Sides of the Same Coin

Quite often the argument has been made that poverty is a cause of corruption.  The argument is that the existence of a high level of poverty is a breeding ground for antisocial and unethical behaviour such as bribe taking. That argument is supported by “all the surveys conducted since1995 matching wealth/poverty of nations to their levels of corruption. The world’s most corrupt nations are also among the poorest” Hawthorne (2013: 11).  It could also be added that the world’s least unequal nations, in Scandinavia, are also considered the least corrupt. 

Many studies have also found that economic development, or an increase in per capita GDP, leads to reduced corruption (Paldam 2002; Treisman 2000). Other studies have confirmed this link, but suggest that it is reduced corruption that allows economic development (for example, Kaufmann and Kraay, 2002). 

However, as a fairly recent study found:
The explanatory power of inequality is at least as important as conventionally accepted causes of corruption such as economic development… Because corruption also contributes to income inequality, societies often fall into vicious circles of inequality and corruption (You & Khagram, 2005: 136).

A variety of other studies have found an association between inequality/poverty and corruption (Dutta and Mishra, 2013) and Gyimah-Brempong (2002) found that increased corruption is positively correlated with income inequality in African countries.  However, authors tend to assume that it is corruption that is causing inequality and poverty rather than the other way around (for example, Gupta et al., 2002).  Certainly the association between inequality and corruption is dramatically clear, as the following graph shows (Gupta et al., 2002: 34):


Batabyal and Chowdhury (2015) find that corruption and income inequality are clearly positively correlated, but then use the ‘instrumental variables estimation’ technique to determine the direction of causality.  This they suggest indicates that it is corruption which is the independent variable and is causing inequality rather than the other way around – or that the two are mutually increasing each other.  They recognise that their:
results establish the existence of a statistically significant positive association between corruption and income inequality. However, this association could stem from reverse causation, that is, high income inequality can lead to higher corruption (page 60).

Statistical tests on causality (for example instrumental variables use by Batabyal and Chowdhury, 2015 and the Granger Test) are not strongly robust and so the hypothesis that it is only corruption that causes poverty and inequality cannot be assumed to be proved.  In addition, the two attributes of inequality and corruption are probably reinforcing each other as suggested by You and Khagram (2005) who also suggest in their study that it is inequality that is supporting corruption.  This they argue is because:
The wealthy have both greater motivation and more opportunity to engage in corruption, whereas the poor are more vulnerable to extortion and less able to monitor and hold the rich and powerful accountable as inequality increases (page 136).

Glaeser et al (2003: 215) argue that inequality has an adverse effect of on economic and social progress and that inequality may increase corruption by “the subversion of legal, regulatory, and political institutions by the powerful”.

A key challenge is that the fight against corruption is not generally seen as being linked to the fight against poverty, and especially, to campaigns for more equitable societies.  So, for example, a donor symposium on Anti-Corruption Development Assistance: Good Practices among Providers of Development Cooperation managed to talk about corruption for two days in Paris in December 2014 without mentioning poverty or inequality once.

In contrast, a recent paper by Batabyal and Chowdhury (2015) clearly made the link between inequality and corruption in a study of the data of 30 Commonwealth countries over the period of 1995–2008. They confirm that:
It is the poor in society that are often the hardest hit by the effects of corruption, being the most reliant on public services and the least capable of paying the high price associated with fraud, bribery and other forms of corrupt activity, to attain those services (page 51).

And concur with Tanzi (1995) that:
The benefits from corruption are likely to accrue more to the better-connected individuals in society, who belong mostly to the high income groups (page 51)

As a result of these trends, corruption will tend to make the poor poorer and the already rich richer – thus increasing the level of inequality in a country.  But not only this, inequality has been shown to be associated with corruption, thus Glaeser et al. (2003) have shown that as inequality increases, the wealthier members of society will have greater resources that they can use to buy influence, both legally and illegally.  Thus we have a vicious circle of corruption leading greater inequality which in turn will facilitate greater levels of corruption.  So an effective campaign against corruption must involve significant moves to reduce inequality.

These ideas are confirmed, at least in the case of Bulgaria, by Uslana (2006) and with the comprehensive paper by You & Khagram (2005):
we have found substantial empirical support for a causal relationship from inequality to corruption (page 151).

Their statistical tests also confirm previous findings (Gupta et al. 2002; Li et al. 2000) that “corruption is significantly associated with income inequality” (page 152). You & Khagram (2005) conclude by saying that “income inequality is likely to be a significant and no less important determinant of corruption than economic development” (page 153), but also go on to conclude that corruption is also:

likely to reproduce and accentuate existing inequalities. Countries may thus be trapped in vicious circles of inequality and corruption (page 154).

This thesis is confirmed if we look at the case of Nigeria. It is difficult to pin-point the exact time that corruption became a major issue in Nigeria.  However, (Agbiboa, 2012: 331) states that:
“By the start of the 1980s, corruption had become so rife and so intertwined with the civil service that some scholars referred to it as ‘‘the political economy of state robbery’’ (Madunagu 1983 , p. 1)”

So corruption arose as a major issue at roughly the same point in time that the economy collapsed and inequality increased – that is in the 1980s. Agbiboa (2012) explains the mechanisms of the causal link between poverty, inequality and corruption:

In a study of the Nigerian bureaucracy, Adebayo (1972 , p. 235) observed that the salary ratio of the highest to the lowest paid civil servants in Nigeria is about 30:1. Although Adebayo’s study was completed in 1972, that gap has widened significantly as most of the income generated within the country continues to accrue primarily to a few individuals and groups (page 332).

In the late 1980s and 1990s, the bad economic conditions meant that many public servants were paid low wages and often went months for even this. “Several researchers have argued that individuals faced with these types of working conditions are quite vulnerable to corruption and are likely to actively engage in corrupt practices to secure the resources they need to meet their basic needs. (Gould and Mukendi 1989 ; Ostrom et al. 1993 ; Buchanan et al. 1980 )” (page 333).

Thus the consensus of academic research is that inequality and the level of corruption are positively correlated and that they may reinforce each other.  Countries with high levels of corruption tend also to have high levels of inequality.  Unless action is taken to simultaneously reduce both corruption and inequality then these societies tend to enter into a downward spiral as inequality and corruption each provide the conditions for the other to deteriorate.

References

Agbiboa, Daniel Egiegba (2012) Between Corruption and Development: The Political Economy of State Robbery in Nigeria, Journal of Business Ethics, 108: 325-345

Batabyal, Sourav and Chowdhury, Abdur (2015) Curbing corruption, financial development and income inequality, Progress in Development Studies, 15, 1, pp. 49–72, Sage

Dutta, Indranil and Mishra, Ajit (2013) Does Inequality Foster Corruption? Journal of Public Economic Theory, 15 (4), pp. 602–619.

Glaeser, E., Scheinkman, J. and Shleifer, A. (2003) The injustice of inequality. Journal of Monetary Economics 50, 199–222.

Gupta, Sanjeev, Hamid R. Davoodi, and Rosa Alonso-Terme (2002) "Does Corruption Affect Income Inequality and Poverty?" Economics of Governance 3:23-45.

Gyimah-Brempong, K. (2002) Corruption, economic growth, and income inequality in Africa. Economics of Governance 3, 183–209.

Hawthorne, Omar E.  (2013) Transparency International’s Corruption Perceptions Index: ‘best flawed’ measure on Corruption?
3rd Global Conference on Transparency Research, HEC Paris, October 24th – 26th

Kaufmann, Daniel, Aart, Kraay and Pablo, Zoido-Lobatón (1999) Governance Matters, World Bank: Washington DC

Paldam M (2002) "The Cross-Country Pattern of Corruption: Economics, Culture, and the Seesaw Dynamics." European Journal of Political Economy 18:215-40.

Tanzi, V. (1995) Corruption: Arm’s-length relationships and markets. In Fiorentini, G. and Peltzman, S., editors, The economics of organized crime, Chapter 7. Cambridge University Press, 161–80.

Treisman, Daniel (2000) "The Causes of Corruption: A Cross National Study." Journal of Public Economics 76:399-457

Uslaner, Eric M. (2006) Corruption and inequality, Research Paper, UNUWIDER,
United Nations University (UNU), No. 2006/34,

You, Jong-Sung and Khagram, Sanjeev (2005) A Comparative Study of Inequality and Corruption, American Sociological Review, Vol. 70 (February 136-157)





Sunday, 21 June 2015

Major Study Finds Benefits of Accrual Accounting not Delivered to Members of Parliament

Ezzamel, M., Hyndman, N., Johnsen, A., & Lapsley, I. (2014). Reforming central government accounting: an evaluation of an accounting innovation, Critical Perspectives on Accounting, 25 (4/5): 409-422.

This is an important study of the introduction of accrual accounting in the Scottish Parliament as an example of the results of this reform introduced by the UK central government from 2001.  It was undertaken by four eminent professors in the field of public financial management who had direct access to parliamentarians as one was an expert advisor to the Finance Committee.  As a result, the authors had access to both documents in the public domain and privileged access to the accountability process of members of parliament.  The study included interviews with members of the first two Scottish parliaments from 1999 to 2007.  This covered the first five years of the introduction of the new accounting reforms and so went beyond the initial period which may have included both teething problems and enthusiasm for the reforms.

The authors conclusions are that the move to accrual accounting was part of the reforms of New Public Management and were not directly conducive to addressing the information needs of members of parliament, so they say that:

“there is evidence in this paper, particularly from government policy documents, which suggest that a major motive for this innovation was managerial... any privileging of the managerial interest group may have attenuated the position of parliamentarians.  (page 421)

Thus the move to accrual accounting did not lead to increased accountability. 

This study also confirms the view that one of the key beneficiaries of a move to accrual accounting are members of the accounting profession and especially the consulting firms (which explains why IFAC, the accounting institutes and the major accountancy firms are so keen to promote this type of reform).  The authors state that:

“there is a suggestion that the advancement of the case for accrual accounting by central government has given an opportunity to vested interests – management consultants and leading international accounting firms – to gain commercial opportunities (Christensen, 2002; Christensen and Parker, 2010).” (page 415)

The studies major concern is that the adoption of accrual accounting did not address the information needs of members of parliament and so was not able to increase their ability to hold the executive to account, as the following quotations demonstrate:

“this innovation did not connect with the focus of our study – parliamentarians. RAB [accrual accounting] had started life as an NPM type managerial reform. It was latterly re-branded as a useful tool for parliamentarians.” (page 416)

“expert advisers to Members of the Scottish Parliament express the view that only a minority of MSPs can challenge the financial information in a meaningful way.” (page 419)

The present system of RAB is too complex for parliamentarians who struggle to make effective use of it. (page 420)

There is evidence that Members of the Scottish Parliament are not confident in the handling of RAB-type information. However, in part this is a reflection of the sheer volume of information to which these Members of Parliament are exposed – information overload. (page 421)

The paper ends with the following important conclusion:

“The literature suggests elected members of parliament have limited financial expertise. This study suggested the RAB innovation was flawed with respect to parliamentarians, because, while, on the face of it, this form of accounting went beyond narrow financials, it failed to represent the parliamentarians’ interest in issues of activity, outcomes and of quality of service within its financial framework in a manner in which they could utilise this information effectively.” (page 421)

The paper also includes the following interesting quotations:

“The idea of externally induced innovation was advanced by Van de Ven (1986), who considered such induced innovations as potential valuable to successful organisations. However, he argued that induced innovation in poorly performing organisations may simply perpetuate poor performance.” (page 411)
Van de Ven AA. (1986) Central problems in the management of innovation. Management Science 1986;32(5):590–607.

‘‘In any discussion of the expenditure information provided by the government, there is at least one aspect on which there is agreement. It is difficult. Difficult to compile and difficult to understand. In part, the difficulties are due to the size and complexity of the government’s financial transactions. In part to the requirements of users, who differ greatly in what they want and in their experience and expertise. But there are many who have said that difficulties also arise because of the way information is presented.’’ (Likierman and Vass, 1984, p. 5) (page 414)

The paper includes the following reference that argued for the introduction of accrual accounting:
National Audit Office (NAO). Financial reporting to parliament, report by the comptroller and auditor general, July 1986. HMSO; 1986.   
However, subsequent reports from the NAO have suggested that many of the supposed benefits of accrual accounting have not actually been delivered.

The authors go on to quote one former Finance Minister as saying:
“I think the negotiation of the budget is just a nightmarish process as it involves the Parliament and the Ministers, so I suppose they [members of parliament] probably feel that they only really check that there is nothing fraudulent, and also maybe influence a bit at the margins. And that is probably fair. I think this is partly to do with the volume of the information and the complexity of it” (page 419)

They go on to emphasise the general incremental of budgets in the public sector, at least from the perspective of members of parliament:
“the incremental nature of budget setting in the public sector, in which all of the focus is on the size of the increment or ‘growth’ monies and the prioritisation of these resources.” (page 421)

The authors also indicate that whilst financial reporting to members of Parliament may be difficult, reporting the results of public sector expenditure are even more problematical:

“these MSPs displayed a high level of understanding of what RAB was seeking to achieve. They exhibited major concerns with the setting of targets, their relationship to policies and wider objectives and resources devoted to thematic priorities.  (page 421)



Sunday, 14 June 2015

Cash Basis IPSAS to be Revised

The IPSAS Board is finally getting around to revising its Cash Basis IPSAS and removing the aspects that have proved to be impractical (consolidation, third party payments and certain disclosure related to donor assistance) see the agenda of the June 2015 meeting of the IPSAS Board agenda:
http://www.ipsasb.org/meetings/ipsasb-meeting-8

This should mean that governments in the Global South are finally able to fully comply with the revised IPSAS once it is issued - currently this has not proved possible for any single government globally (mainly due to the key current requirement for full consolidation of all controlled entities - something that not a single government in the world currently undertakes. 

Where governments currently have plans to move to the accrual basis of accounting (planned for 2016 in Nigeria, for example), such plans should be delayed to take into account the proposed changes to the Cash Basis IPSAS.

The relevant agenda paper (3) can be downloaded direct from:
http://www.ipsasb.org/system/files/meetings/files/agenda_item_3_combined-v1.pdf

In 2008 the IPSAS Board established a Task Force to review the "major difficulties that public sector entities in developing economies encounter in implementing the Cash Basis IPSAS".  This Task Force reported in 2010, but no further action was taken.  The IPSAS Board now plans to develop and issue an Exposure Draft on a revised Cash Basis IPSAS.

The IPSAS Board agreed at its June 2015 meeting that a first draft ED for a revised Cash Basis IPSAS should be prepared for their next meeting in September.  This is to include the following key revisions to the current IPSAS:

(a)    Consolidation: is to be encouraged (not required) for all controlled entities.

(b)   External Assistance: requirements for disclosure of cash external assistance will be retained, but other requirements only to be encouraged and reduced (so project aid will not be required to be reported).


(c)    Third Party Payments: Requirements to report third party payments by parties outside the economic entity are to be encouraged only and so will no longer be a requirement.

Tuesday, 19 May 2015

Accrual IPSAS would be Costly: - Reduce Accountability and Increase Corruption

Accrual accounting was developed in the private sector to measure annual profit – so it is not relevant for the public sector.

A move to accrual accounting moves from actual, objective, hard cash to estimates which can be manipulated.  In the cash basis the actual payments for capital projects are compared with the budget.  Under accruals only estimates (depreciation) are provided.  Similarly, with the cash basis the actual cash collected is reported.  Under accruals we move to estimates of the revenue that is expected to be collected.

 “In most cases it is too soon to identify any discernible benefits from better resource management” - UK National Audit Office, 2003

All the objective evidence from the few countries that have adopted accrual accounting show that it is expensive and does not actually provide the expected benefits.  In contrast, the financial statements are much more difficult to understand and so accountability is worse.

“there was little evidence that [accrual] information was extensively used in decision making…  the costs were seen as substantial”  Connolly and Hyndman, 2005

Only five of the governments of the 20 largest economies in the world use accruals for their central government accounts.  The following have not adopted accrual accounting for their central government financial statements:

Argentina               Brazil                 China                   Germany            India                          Indonesia
Italy                        Japan                 Mexico                 Russia                Saudi Arabia
South Africa          South Korea        Turkey.

Only 18 central governments have issued accrual based financial statements.  So 90% of governments still use the modified cash basis.  Birmingham City Council adopted it in 1850 – but it was not adopted in Westminster for another 150 years.  The Irish Government does not use accrual.

“there was no evidence that the perceived benefits from the introduction of... accruals accounting... were being realised”  - Mellett, Macniven & Marriott, 2008

The accountancy bodies (like ICAN and IFAC) and the accounting firms support the accrual basis as it provides lots of jobs for accountants and consultancy work for their firms.  For example, one relatively small health agency in Nigeria recently gave £60,000 to an auditing firm to value its assets in preparation for a planned more to accrual accounting next year. 

Number of accountants in central government increased from less than 600 in 1989 to 2,200 in 2003 – period accruals was introduced in UK central government.

Is providing jobs for poor accountants a real priority for the Nigerian or any other government?


The British war ministry adopted accrual accounting in the early 1920s.  But this reform was reversed a few years later as the benefits were less than the high costs.

For more information read:  http://www.icgfm.org/journal/2012/no1/chapter5.pdf
and

http://publicfinanceafrica.blogspot.com/2015/06/major-study-finds-benefits-of-accrual.html

Please come back to me with the details of any objective study that shows that any significant benefits have been achieved in any government which has actually adopted this approach.

Tuesday, 7 April 2015

Nigerian judiciary workers demonstrate how to ensure good governance


Donors and the international financial institutions are keen for developing countries to adopt good governance, but few appear to be supporting the current judiciary workers strike in Nigeria. 

The workers in each of the 36 states were on strike in July last year and again from the beginning of January this year.  The strike is over the independence of the judiciary and the implementation of the 1999 Constitution that requires the judiciary to receive its funding direct from the Federation Account (where all the oil money should be collected).

Although the constitution of Nigeria provides for an independent judiciary, the
judicial branch is susceptible to executive pressure, particularly at the state and local levels.   There have been numerous calls for a more independent judiciary over the years, both from the judiciary itself and from outside. In 2009, some prominent Supreme Court judges called for a more independent judiciary.

In January 2014, the Federal High Court ordered the Accountant General of the Federation to deduct monies intended for the judiciary from the Federation Account and to pay such sums to the National Judicial Council (NJC) for onward transmission to the Chief Judge in each state.  Since then judiciary workers at the Federal and state levels have been struggling for this judgement to be implemented.

Justice Adeniyi Ademola described the disbursement of funds for the judiciary by the executive as unconstitutional and a threat to the independence of the judiciary.
He said the provisions of sections 81(3), 121(3) and 162(9) of the Federal Constitution of Nigeria were clear and straightforward and should therefore be complied with. 

According to the Judge, the judiciary should not longer have to beg the executive for funds. The Judge noted that both the National Assembly and the Independent National Electoral Commission (INEC) enjoyed independence of funding and that the same should apply to the judiciary in accordance with the constitution.

National President of the Judiciary Staff Union of Nigeria (JUSUN), Marwan Mustapha Adamu said: “remember that this judgment was delivered in January 2014, since then, government has engaged us in discussion about 20 times”.

The Federation Account Allocation Committee (FACC) of the Federal and state Accountants General agreed to set up a technical implementation committee at their meeting in June, 2014, but this has not been implemented.

Marwan lamented that despite the Memorandum of Understanding (MoU) which was signed to ensure the suspension of the judiciary workers strike in July last year, the Accountants General of the states are insisting that they cannot meet the union’s demands, due to declining oil revenues.

“So what is difficult, when the figure is there for everybody to see how much is budgeted,” Marwan queried. He alleged that since the MoU was signed the union has not been invited to any meeting to discuss how to implement the court order.  

The judiciary workers and their union, JUSUN finally lost patience and re-commenced their strike from the beginning of 2015.  The Federal Government has now agreed with JUSUN, as have around a third of the 36 states.  However, the strike continues in the other states that are yet to adopt the constitutional good governance demanded by the trade union.

In Edo State, for example, the judiciary workers held a protest in mid-March and marched through the centre of Benin City to demonstrate their determination to continue their strike.  The previous day the local JUSUN president, Uyi Ogieriakhi had met with the governor of the state.  However, the governor had expressed his opposition to the strike and his determination not to provide greater independence for the state judiciary.

The judiciary workers are equally determined to continue their fight for good governance and independence of the courts. In an exclusive interview, Uyi said that their demands were “sacrosanct in terms of good governance”.  At the protest he said the strike would continue, even for two years, and was loudly cheered by his members.

The donors and financial institutions talk about good governance, so you would expect them to be supporting the striking JUSUN workers over their struggle to gain proper independence for the courts in Nigeria. However, when I asked their local president, Uyi Ogieriakhi, whether they had received any support from the donor community, his response was, “Erm, erm,  I do not think that is the case now”.