Friday 9 December 2011

Annual Financial Reporting by Governments - What is Good Practice in Africa?

Along with the auditor’s report, a government’s annual financial statements provide the essential financial data necessary for accountability purposes. It is the prime document enabling parliaments and citizens to hold their governments to account for their management its financial resources.


This study aims to identify and collate existing good practice in terms of annual financial reporting by governments in sub-Saharan Africa. As such, it is a bottom-up study of annual financial statements as an aid to developing international accounting standards for governments in the global south. There have been a range of studies on public financial management in sub-Saharan Africa in recent years, but few of these provide details of how governments report annually on their financial management.


The international accounting standard promoted for governments of sub-Saharan Africa is the Cash Basis IPSAS, but it is not based on existing good practice and, as a result, not a single government globally has actually been able to implement its key requirements. Similarly, in Africa at least 31 governments have tried to implement the standard, but none have actually implemented its key mandatory requirements (nearly nine years after the standard was issued). This standard is now planned to be revised and we hope that the results of this research will facilitate this process.


Draft report now available from: http://tinyurl.com/esaag2012

Sunday 13 March 2011

Africans Revolt Against New Public Management as well as for Democracy

Africans Revolt Against New Public Management as well as for Democracy

Andy Wynne

After a slow start, the US and other western powers are now expressing support for the North African revolutions and calling for an orderly transition to democracy. Their hesitation is because these revolts are against dictators who were their key allies in the region. Mubarak was the second greatest recipient of US aid in the world (after Israel) and received an estimated $30billion over the last thirty years. Ben Ali, in Tunisia, was heavily backed by France (receiving €147million, the third highest amount of official development assistance for any country in 2005) and the French foreign minister resigned after holidaying in Tunisia in December 2010 and flying there in a private jet belonging to a friend of the ousted Tunisian dictator. France last shipped tear gas grenades to Tunis just two days before the President, Ben Ali, was toppled from power. After coming in from the cold, Gaddafi was supported and armed by the UK in recent years. The British Prime Minister managed to combine a visit to the protesters in Egypt with an arms selling tour to the remaining dictators of the Gulf region.

The support to Mubarak, Ben Ali and others was in return for the political support for western policies in the region, but also for their support for the Neoliberal project of privatisation and deregulation including New Public Management style reforms of public financial management.

The governments of the Middle East and North Africa re-affirmed their support for Neoliberalism in the Marrakech Declaration on Governance and Investment of November 2009 in which they declared their, “strong commitment to private initiative to generate employment and raise living standards” and “a vibrant business environment”. The autocratic governments signing the declaration went on to claim that they:

Reaffirm our commitment to involve citizens and civil society in policy-making and to use consultation mechanisms prior to decision-making as an effective means to ensure better public services and successful policy implementation

The revolutions are a problem for globalisation and the assumption that the market must shape affairs across the planet. Ordinary people created a mass movement that finally gave them a chance to reject the political and economic policies they endured for over 30 years. The revolts raise huge questions about Egypt and Tunisia as models for economic reform. The revolutions has delivered a resounding “No” to free market neoliberal capitalism, but also to New Public Management and the associated ‘modernisation’ of public financial management. The financial crisis which provoked the global economic recession led to a questioning of the dominant economic orthodoxy. The North African revolutions provide the beginnings of an alternative to the domination of neoliberalism and New Public Management.

One of the things that make the Egyptian and Tunisian revolutions potentially important on a global scale is that they took place in states that were already neoliberalised. The complete failure of neoliberalsm to deliver "human well-being" to a large majority of Egyptians was one of the prime causes of the revolution (Abu Atris 2010).

Before the global rise of Neoliberalism, with Regan and Thatcher, President Sadat of Egypt introduced the “infitah” or “opening”. This was a commitment to dismantle the social and welfare provisions of the state and to hand the initiative to private business. Mubarak embraced this and in the 1980s and 1990s he reduced state subsidies on staple foods—government spending on bread, flour, rice, sugar and cooking oil declined by two thirds.

In 1991, the newly appointed Prime Minister, Ebeid, agreed to the International Monetary Fund/World Bank Structural Adjustment Programme in return for a $300 million stand-by loan, a $28 billion loan from the Paris Club and $15 billion in debt restructuring, and inaugurated Egypt's privatisation programme.

In 2007 the World Bank declared that Egypt was “the world’s top reformer”. Economic journalists in Cairo described Mubarak as “an IMF poster child”. The regime became a model for the IMF. States worldwide have been encouraged to follow its example. Similarly in Tunisia, Ben Ali's neoliberal restructuring won praise from the World Bank and Western governments.

Egyptians have long known who benefits from pro-business policies. Mubarak enriched himself and his family, but also protected a network of new capitalists, financiers and speculators who acquired huge wealth. According to the Egyptian commentator Abu Atris on al Jazeera:

Privatization provided windfalls for politically well-connected individuals who could purchase state-owned assets for much less than their market value, or monopolise rents from such diverse sources as tourism and foreign aid (2010).

On the other hand, inequalities increased. In 2000 the World Bank said that 16 percent of Egyptians lived on under $2 a day, just before the revolution it had reached 40 percent.

In April 2010 the Egyptian Gazette reported (Kamel 2010) that there were only 153 State-owned companies left out of 314 firms back in 1991. This led to a huge increase in unemployment as employment in the country's public-sector firms fell from one million in the 1990s to around 373,000 in 2009, according to official reports. This contributed to an official level of unemployment of around nine percent in 2010.

In Tunisia, the official jobless figure was around 14 percent, but it was much higher levels in towns such as Sidi Bouzid, where the uprising began. There were also extremely high levels of youth and graduate unemployment. It was this unemployment that sparked the revolts, but they did not come out of the blue.

In late December 2006 over 20,000 Egyptian textile workers in Mahal el-Kubra went on strike against privatisation and won. Workers drove out the hated security police during their strike. They also held massive rallies that became a symbol of freedom in a country where speaking out was considered a crime. The victory at the al-Mahala Textile Company was the first significant victory by Egyptian workers for a generation.

In Tunisia a rebellion had rocked the phosphate mining region of Gafsa in early 2008.

What is neoliberalism?

In his Brief History of Neoliberalism, the eminent social geographer David Harvey outlined "a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterised by strong private property rights, free markets, and free trade." Shivji (2009) argues it is “par excellence the ideology, nay, the propaganda of, for and by the vested interests of the status quo” (page 23).

According to Neoliberalism, guaranteeing the sanctity of markets is the limit of legitimate state functions, and state interventions should always be subordinate to markets. So New Public Management and ‘modern’ public financial management reforms are part of the Neoliberal project. Each of the currently standard reforms of public financial management aim to produce or facilitate a smaller state and the introduction of private sector type approaches to the management of the public sector.

The emphasis on balanced budgets, reduced deficits and low government debt all reduce the reach and size of government. If government borrowing is reduced then the resources available for the state are lessened. Pressure is increased as the abolition of capital controls has increased the ease with which money can be exported and the banks have been give a greater say in the rates of interests which governments are forced to pay for their loans.

The emphasis on efficiency, performance and value for money also aims to reduce the size of the state. There is supposed to be a balance between inputs and outputs in maximizing efficiency. But it is economy, or reduced spending, which is dominant and is clearly the major aim. So, for example, the UK National Audit Office claims to save eight pounds for each pound it spends, whilst the US GAO says it saves $95 for each $1 of its budget.

Programme budgeting and the Medium Term Expenditure Frameworks (MTEF) facilitate this process by eliminating expenditure which is not directly related to the government’s core objectives. They also assist governments in ensuring that their future plans are sustainable, thus providing a further brake on the growth on government spending.

The objective of governments to reduce poverty through redistribution is side lined. Poverty reduction is expected to be achieved through economic growth. So progressive taxation like import duties, income taxes and property taxes are reduced whilst regressive taxes like Value Added Tax (VAT) are promoted.

In this brave new world, subsidies on basic commodities are reduced and so we see the huge boom in global food prices and the associated rise in hunger. Public services can no longer be provided free, to guarantee access to the poor, but cost sharing has become the norm.

Decentralisation helps to reduce the size and power of the central state and so its ability to try and plan for the future.

Integrated Financial Management Information Systems (IFMIS) and accrual accounting are private sector tools and approaches which are touted as being part of the process of transformation and modernisation of the public sector.

Similarly the rise of ‘civil society organisations’ are promoted as an alternative to provision of services by the central state. However, trade unions, often the largest CSOs after religious institutions, are usually ignored. There potential power was again emphasised with their central role in the overthrow of Ben Ali and then Mubarak.

A recent World Bank review of public financial management reforms across North Africa and the middle east (World Bank 2010) concluded that, “Egypt’s experience during the past decade clearly illustrates that successful implementation of PFM reform is much more than a technical exercise. With the support of donors, and under the leadership of the Ministry of Finance, Egypt has tackled many of the crucial dimensions of PFM.” (page 14). This report also noted that, “it is encouraging that public financial management (PFM) reform and modernization has occupied a prominent place on Egypt’s policy agenda over the past decade. The reforms have covered a range of areas, including revenue administration, financial information systems, cash management, financial decentralization and internal financial control.” (page 12).

The World Bank report (2010) noted that support for Egypt’s public financial management reforms was provided by a range of multilateral and bilateral sources. These included the United States, Netherlands, European Commission, International Monetary Fund and the World Bank. The largest donor by far was the United States, which has invested heavily in improving PFM. Among the reforms supported by the United States Agency for International Development (U.S.AID) have been tax policy and administrative reform, financial management information systems, introduction of the Treasury Single Account, budget reform and organizational development of the Ministry of Finance.

The same World Bank report (2010) also provided praise for the public financial management reforms in Tunisia. Which it claimed showed, “solid performance on [World Bank Institute] governance rankings and is well ahead of the rest of the region in terms of government effectiveness, control of corruption, rule of law and regulatory quality (page 67). The report went on to praise the political support at the highest level for the public financial management reform programme, noting:

The 2004 Presidential electoral program proposed PFM reforms, such as performance based budgeting, which were then integrated in the XIth Development Plan (2007-2011). The 2009 presidential program added the accounting and public administration reforms (e-governance and public service quality) (page 67).

These reforms included decentralization of powers to the 24 governorates who were responsible for “an increasing amount of public expenditures” (page 68). They also include the introduction of MTEFs, at least on a pilot basis:

Initially, three ministries and a division of the Ministry of Education have been selected as pilots for the MTEF and performance budgeting initiative. The 2008 agreement with the EC provides for three additional pilot ministries in 2010. The whole Ministry of Education has been made pilot in late 2009, at the request of its minister and staff. The [World] Bank and the EC will provide technical assistance in these pilots. (page 75)

An OECD study (2010) of public management reforms in the Middle East and North Africa noted the following standard public financial management reforms as common features across the region:

i) “modernising audit and control functions to reinforce ex post performance audits; and

ii) granting managers more spending autonomy in exchange for firm obligations to deliver measured outputs and eventually outcomes.” (page 98)

What should we support?

In February 2010 independent trade unionists in Egypt outlined “a workers’ programme” which included the following eight demands:

1. Raising the national minimum wage and pension

2. The freedom to organise independent trade unions

3. Job security and protection from dismissal

4. Renationalisation of all privatised enterprises

5. Complete removal of corrupt managers

6. The right of Egyptian workers to strike

7. Decent health care for all workers

8. Dissolution of the Egyptian Trade Union Federation.

Similarly, in mid-February the giant factory, Misr Filature et Tissage was on strike. The workers were demanding the sacking the chief executive of the factory, Fouad Hassan, who they accused of corruption. They were also demanding an increase in their salaries and benefits and improvements in their working conditions (Le Monde Diplomatique, March 2011, page 13).

These recent developments reflect the concepts of popular livelihoods, popular participation and popular power, developed by Prof Issa Shivji of the University of Dar es Salaam in the late 1990s, as the three cornerstones of a new consensus. Shivji uses the term popular to mean being anti-imperialist, based on the mass of the poor people in the towns and rural areas and to be based on customs and cultures developed in a “living terrain of struggles” (2009, page 14).

Popular livelihoods are necessary to address the poverty of millions who cannot be expected to make further sacrifices when the corrupt elite prosper whilst “their children’s lives are reduced to sub-human existence” (page 15). So the workers of Egypt are correct to demand pay increases for themselves and increases in the minimum wage.

Popular participation describes the extension of politics to include the “issue of control and distribution of resources and differences in society” (page 15). So, for example, the demands of the Egyptian workers for the dismissal of corrupt managers and the renationalisation of all privatised enterprises are justified.

Finally popular power draws attention to political legitimacy and the institutional organisation of state power. We have to develop a new consensus which does not restrict politics to the casting of votes every five years and allows the majority of people greater control over their lives. The Egyptian workers are correct to demand greater job security, an end to temporary contracts and the right to form independent trade unions and the right to strike.

Shivji (2009) has also questioned the legitimacy of the current governance agenda of the IMF, World Bank and other donors. He points out the hypocrisy of these institutions which in the past provided despotic colonial regimes, organised the overthrow, and in some cases the assassination, of radical nationalist leaders such as Kwame Nkrumah of Ghana, Patrice Lumumba of what is now the Democratic Republic of the Congo and Thomas Sankara of Burkina Faso. They also supported such corrupt and autocratic dictators as Mobutu in the Democratic Republic of the Congo and, until a couple of months ago, Mubarak of Egypt and Ben Ali of Tunisia. As a result,

economic and political conditionalities, including those on good governance, are an expression of the reassertion of imperial domination, however it may be labeled. (page 26)

In terms of public financial management these principals mean that poverty reduction will only be successful if it includes the redistribution of wealth, income and power and so states should have this as one of their main objectives. As Roy Radner once put it, “When you allocate resources by market prices, you discriminate against poor people.” This is because in the market price you have one vote for each dollar that you posses. In a democracy each person has one vote. Progressive taxation of wealth and income should be used to increase state incomes to fund quality public services which are accessible to the poor (and so have to be provided at no direct cost to the recipients).

Public financial management reforms should be firmly based on existing good practice and should be resolutely controlled by local people (not the sham of country led development which means reforms have to be consistent with the currently dominant international agenda). Government’s should not longer be required or encouraged to waste untold millions on repeated white elephants of MTEFs or IFMISs, but should incrementally improve their financial systems based on approaches which have been clearly demonstrated to work in similar environments (a key advantage of countries in the Global South should be that they do not repeat the mistakes of industrial countries). As a recent report by regional public financial management officials in Africa said: “it is difficult to determine whether governments themselves would have embarked on various budget reform approaches, such as Medium Term Expenditure Frameworks (MTEFs), programme budgeting or the introduction of Integrated Financial Management Systems (IFMSs) in the absence of donor pressure to do so” (CABRI 2010, page 28).

Transparency should mean accessible and understandable by the poor majority of people, not the complexity of accrual accounting or programme budgeting. Key revenue streams should be published including taxation income provided by the larger taxpayers and natural resource rents received by the government. Expenditure reports should include the resources made available to local public services units, for example, schools and health facilities, as well as the salaries and other benefits provided to higher paid public officials and the ubiquitous consultants.

Central states need to be strengthened and enabled to undertake effective regulation of the private sector. Far from requiring decentralisation, many states in the Global South need to come together so that they are able to collectively regulate and tax the multi-national corporations that operate in their jurisdictions. Rather than an endless game of beggar thy neighbour to attract foreign direct investment, states in the global south should co-operate to increase the rate of taxation of the international companies.

References

Abu Atris (2011) A revolution against neoliberalism? Egyptian commentator on Al Jazeera, 24 Februrary

http://english.aljazeera.net/indepth/opinion/2011/02/201122414315249621.html

CABRI (2010) Good Financial Governance in Africa: The Status Report
www.cabri-sbo.org/en/e-networking/blog/11-general/145-gfgblog2

Kamel, Ahmed (2010) Looted public assets, Egyptian Gazette, Tuesday, April 20

http://213.158.162.45/~egyptian/index.php?action=news&id=6782&title=Looted%20public%20assets

Marrakech Declaration on Governance and Investment

Adopted in the context of the Ministerial Conference held in Marrakech, Kingdom of Morocco, on 23 November 2009

www.innovazionepa.gov.it/media/533141/ministerialdeclarationang.pdf

World Bank (2010) Public Financial Management Reform in the Middle East and North Africa: An Overview of Regional Experience, Part II: Individual Country Cases, Washington: World Bank

http://go.worldbank.org/715WJLXHF0

Egyptian independent trade unionists’ declaration, Cairo, 19 February 2011
http://righttowork.org.uk/2011/02/egyptian-independent-trade-unionists’-declaration-cairo-19-february-2011/

OECD (2010) Progress in Public Management in the Middle East and North Africa – case studies on policy reform, Paris: OECD

http://browse.oecdbookshop.org/oecd/pdfs/browseit/4210071E.PDF

Shivji, Issa (2009) Where is Uhuru? – reflections on the struggle for democracy in Africa, Cape Town: Fahamu Books

Tuesday 15 February 2011

Good Governance or the Struggle for Democracy in Africa

In the week after Hosni Mubarak was overthrown after 30 years as president of Egypt we should perhaps reconsider the role of the ‘development partners’ in bringing good governance to Africa.

For thirty years Mubarak was heavily supported by the US and other industrial countries receiving an estimated 30 billion dollars in aid. In return it is estimated that Mubarak stole 70 billion dollars and the people of Egypt suffered a state of emergency, repression and the lack of even the most basic human rights.

In contrast, the people of Egypt eventually rose up and after 18 magnificent days Mubarak eventually gave in.

So who are the best guardians of good governance in Africa? The donor community or the people themselves?

Eight years ago Issa G Shivji, then professor of law at the University of Dar es Salaam considered these issues in his brief paper, “The Struggle for Democracy” (see the previous post). He mapped out the history of good governance: the struggle against colonialism, the cold war and the Structural Adjustment Programmes (SAPs). He argues that democracy is “the struggle of the African people to reclaim their humanity and dignity and the right to think for themselves and to chart their destiny”, much as happened in Egypt immediately before Mubarak left power. That democracy has three critical elements, popular livelihoods, popular power and popular participation. This rather than the ‘good governance’ agenda of the development partners is what we have seen flowering in Egypt over the last few weeks.

The Struggle for Democracy

The Struggle for Democracy

Issa Shivji 2003

The contemporary neo-liberal discourse has one fundamental blind spot. It treats the present as if the present has had no history. The discourse on democracy in Africa suffers from the same blindness. The struggle for democracy did not begin with the post-cold war introduction of multi-party system. The independence and liberation struggles for self-determination, beginning in the post-world war period, were eminently a struggle for democracy. Neither formal independence nor the victory of armed liberation movements marked the end of democratic struggles. They continued, albeit in different forms.

The struggle for democracy is primarily a political struggle on the form of governance, thus involving the reconstitution of the state. No one claims that democracy means and aims at social emancipation. Rather it is located on the terrain of political liberalism so, at best, creating conditions for the emancipatory project. This is important to emphasize in the light of the hegemony of neo-liberal discourse which tends to emasculate democracy of its social and historical dimensions and present it as an ultimate nirvana.

On these premises, although liberation was no doubt a democratic struggle, its articulation as a struggle for liberation gave democracy a social dimension, which the neo-liberal ideology eschews and avoids. In turn, the tension between political democracy and social emancipation constantly beleaguered the liberation and independence movements. This tension inevitably got enmeshed in the cold-war ideological confrontation between the two power blocks under respective superpowers. The cold war confrontation not only “disfigured” the liberation and democratic discourse in Africa, it turned the newly and fledging independent states into pawns, and the continent into a chessboard, of proxy hot wars. The consequences of those hot wars have been devastating for the continent. Today’s failed states were once upon a time the darlings or demons – depending on the point of view you take – of global hegemonic powers.

Military coups became the order of the day in the ‘60s and ‘70s. The targets were nationalist regimes, which wanted to carve out an independent space and give their sovereignty a modicum of reality. Patrice Lumumba was assassinated by the American and Belgium manipulation and involvement (Blum 1986, 174). A surrogate regime of Mobutu was put in place.

The Congo, and its people, including, neighboring states in Central Africa have since seen no peace. Kwame Nkrumah, who early realized the importance of continental unity and the curse of imperial exploitation through multinationals, was overthrown in a CIA engineered coup (ibid., 223). That country too has not totally regained stability and development since.

Between January 1956 and the end of 1985 there were sixty successful coups in Africa, that is, an average of two every year (Hutchful 1991, 183). In 1966 alone there were eight military coup d’etat and by 1986, out of some 50 African states, only 18 were under civilian rule (Nyong’o 1998, 78). Behind virtually every coup was the hand of one or the other imperial power, and, more often than not, the US. Overthrowing nationalist regimes and installing tyrannical dictatorships was, then, a “fair game” for today’s champions of democracy and “good governance”!

The regimes, which for various reasons, escaped the fate of military take-over inevitably turned authoritarian one-party states under some or the other form of developmentalist rhetoric (see, generally, Shivji 1986). The one-party rule and curbing of individual freedoms was presented as a trade-off between democracy and development. Even that trade-off did not work. Unlike a Cuba in the socialist sphere or a South Korea in the capitalist sphere, none of the African states was able to wrench itself free of the neo-colonial economic structures imposed by colonialism and perpetuated by the imperial world market.

By the end of 1970s, many African states, regardless of the nature of their states or their economic policies or ideological orientation, found themselves in deep economic crisis with high debts, low or negative growth rates, hyper inflation and massive transfers of surpluses through various ways, to the developed North.

Meanwhile, the North, the US and Europe, was smarting under Reaganite and Thatcherite economics and politics (see Hobsbwam 1994, ch. 8). The general swing towards the right gripped even the social democratic northern Europe. The humiliating defeat in Vietnam, the newly-found power of the oil-producing countries in OPEC and the 1979 Iranian revolution dealt a heavy body blow to the hegemony of imperialism, in particular to the United States. Thus the Second Cold War in which the Reagan-Thatcher neo-liberal axis not only further fuelled the fires of ideological warriorism but also rabid anti-Third Worldism, which was directed equally against nationalist and self-identified socialist regimes (Hobsbawm ibid., 247 et. seq.) .The combination of economic crisis at home and the rise of neo-liberalism globally made many an African country a ready victim of the IMF-World Bank structural adjustment programmes or SAPs. SAP came with its stringent conditionalties – liberalization of markets, balancing of budgets, removal of subsidies, so-called cost-sharing in the provision of social services, etc.. African states, including the most nationalist among them like Tanzania, were in no position to resist. They eventually gave in, wreaking havoc in the already fragile economies on the one hand, and the welfare of the most disadvantaged of their people, on the other (Mwanza ed., 1992). Import-substitution industrialization, which had been one of the developmental planks of the nationalist period, was virtually wiped out as industry after industry was bankrupted, unable to withstand the imports of cheap goods. Agriculture stagnated. There was little the governments could do beyond exhorting the peasants to work harder. Social indicators like education, health, water and electricity began to decline. In short, SAPs sapped whatever vitality there was in the fragile African economies (see, generally, Gibbon ed. 1993, Mongula 1994, Mamdani 1994). Even the moderate social achievements of the nationalist period in education, health, and water. were swept away.

The fall of the Berlin Wall, followed by the first Gulf War, marked another phase in the political come-back of imperial hegemony, or, what Furedi has called, the ‘moral rehabilitation of imperialism’ (Furedi 1994). If in SAPs imperial powers and the IFIs had flexed and applied their economic muscles, in the post-cold war “democracy” crusade, they aggressively and uncompromisingly applied their political muscles. Political conditionalities were added to economic conditionalities, while economic conditionalities were upgraded to include privatization of not only parastatals but also services – water, electricity, communication, education, etc. Multi-party democracy, human rights, “good governance”, poverty reduction became the buzz words of the discourse, now renamed, “policy dialogues”.

Hegemonic ideologies and dominant elites were not without their critiques. Nationalism of the middle class which came to power on the morrow of independence was severely rebuked by Frantz Fanon (.1963). Fanon roared and young intellectuals echoed him all over the continent.

The national middle class which takes over power at the end of the colonial regime is an under-developed middle class. It has practically no economic power, and in any case it is in no way commensurate with the bourgeoisie of the mother country which it hopes to replace. (pp. 119-120)

It follows the Western bourgeoisie along its path of negation and decadence without ever having emulated it in its first stages of exploration and invention, stages which are an acquisition of that Western bourgeoisie whatever the circumstances. In its beginnings, the national bourgeoisie of the colonial countries identifies itself with the decadence of the bourgeoisie of the West. We need not think that it is jumping ahead; it is in fact beginning at the end. It is already senile before it has come to know the petulance, the fearlessness or the will to succeed of youth. (p.123)

Developmentalism, or, what was called socialism in some places, found its critiques in theories of dependency and underdevelopment. Samir Amin (1990), Walter Rodney (1972), the young intellectuals of the Dar Campus, all vigorously debated with the mainstream American paradigms of political science centering around modernization and nation-building (Cliffe and Saul eds., 1973). . Multi-party and liberal democracy immediately elicited even a more passionate search for ‘real’democracy. A spate of publications in the 1980s on popular struggles and social movements countering top-down civil society approaches became popular for a while but was not sustained (Nyong’o ed. 1987). SAPs too were subjected to academic research and intellectual scrutiny, though, more often than not, by this time, home-grown critiques were beginning to wear thin (Mwanza ed., op.cit., 1992, Gibbon ed., op.cit.) . The neo-liberal discourse, if it deserves that respectability, appears much more dominant today. Consultancy, the so-called policy-dialogues, NGOs and “human rights” have sucked in radical intelligentsia giving charlatans and policy-advisers the intellectual field-day. But to the credit of African radicalism, the apparent ‘intellectual’ hegemony is more a pretence than a reality. A few critiques have continued to challenge it, albeit ignored, at worst, or acknowledged as tokens, at best.

But the matter of social change and transformation is not simply one of discourse. The struggle for democracy is ultimately rooted in the life-conditions of the people. In the debates of the 60s and 70s, radical political economy, with its concepts of class and modes of production, placed on the centre stage the real struggles of popular classes and oppressed masses, notwithstanding that it remained an elite, and very often an elitist project. People were posited as the agency and drivers of change, as opposed to the state. The neo-liberal discourse is bereft of any such theoretical rigour or political vision. Popular classes and masses have been turned into a helpless lump of poor waiting with bowls in their hand to receive “poverty reduction funds” while the so-called private sector is paraded as the ‘locomotive’ of development. Curiously, the dialectic opposite of ‘the poor’ is not ‘the rich’ but ‘the donors’! The analytical question is not ‘how-the- poor-became-poor and continue to be so’, but rather ‘how many are poor, moderately poor, very poor’ and how long would it take to eradicate poverty? As I said before, the neo-liberal discourse is not only blind to history but utterly oblivious of agency of change. It is par excellence the ideology , nay, the propaganda of, for and by the vested interests of the status quo. And it is on this ahistorical and asocial terrain that the discourse on governance, (that is “good governance” and “bad governance”) is constructed.

Theoretical Treatment of Governance

What is the conceptual status of ‘good governance’? At the minimum, liberal and radical paradigms would agree that governance refers to the institutions and relations to do with political power: the way political power is exercised and legitimized. In other words, governance is constructed primarily on the terrain of power. Thus articulated, the values and principles by which governance would be judged and characterized relate to forms of governance, such as democratic governance or authoritarian governance or dictatorial governance. The “good governance” discourse, however, does not admit of the relationships of power. Rather it presents itself as a moral paradigm, distinguishing between the good, the bad and the evil. What is ‘good’ and ‘bad’ governance thus turns out to be a moral judgment, on the one hand, and relativist and subjectivist, on the other. The result, I want to suggest, is that ‘good governance’ has no conceptual or theoretical value in understanding a phenomenon with a view to change it. Rather, it is, at best, a propagandist tool easily manipulatable by whoever happens to wield power. And this is exactly how it has been deployed in the dominant, neo-liberal discourse.

One of the political conditionalities imposed on African governments by the IFIs and the “donor-community” is ‘good governance’. This has become a flexible tool in the hands of global hegemonies to undermine the sovereignty of African nations and the struggle for democracy of the African people. For, the people are no longer the agency of change but rather the victims of “bad governance” to be delivered or redeemed by the erstwhile donor-community. The instrument of this deliverance is supposedly the policies and political conditions – multi-party, governance commissions – which must be put in place for a state to qualify to receive ‘aid’. The recipients on their part ‘reform’ their governance structures, with aid and technical assistance from the same ‘donor-community’, to satisfy their, what these days are called, “partners”. The example from my country, which is far more subtle, and relatively more independent in its relationship with ‘partners’, illustrates the point.

In Tanzania, we have first a ministry, headed by a full-fledged minister, of good governance. Then, through donor pressure, the Government was obliged to establish a Commission for Human Rights and Good Governance with aid from the Danish government. Among the first things was to build a gargantuan structure to house the Commission and establish the infrastructure at a cost of over 1.5 billion shs. (or roughly 1.5 million US$). (The people of Tanzania would never know the exact amount nor the conditions of the contract. It is secret from them. The Danish people would perhaps be in a better position to know how their government promotes “good governance” in Tanzania.) Then another bureaucratic structure of civil servants headed by seven commissioners is set up drawing usual salaries and numerous allowances.

Besides a minister of good governance and a commission, there was another ‘benefit’ the Government received as part of ‘good governance’ assistance. A couple of years ago, the distinguished Finnish diplomat, Martin Althassari, paid visits to Tanzania as an ‘advisor to the President’ on good governance, sponsored by the World Bank! Presumbaly, he made a report to the President (or the World Bank, who knows?) after consulting civil servants, a sprinkling of NGO representatives, academics, private sector etc., as is the consultants’ custom these days. How this consultancy represents the struggle of the people of Tanzania to construct a democratic state and polity, I cannot tell. And this is because, we are not even sure if “good governance” means the same thing as democratic governance of, for and by the people of Tanzania! After all they were never consulted on the appointment of the advisor to their president!

What about the Commission for Human Rights and Good Governance?

The Commission, among other things, receives complaints about violation of human rights and abuse of power and investigates the same. This is precisely the kind of work supposed to be done by the mainstream judiciary and the former Permanent Commission of Inquiry. The Permanent Commission was set up in the middle sixties modeled on Scandinavian Ombudsman to inquire into abuse of power by state officials and report to the President. True, both the judiciary and the Permanent Commission had a lot of flaws. People have had lots of criticisms and grievances against these institutions and expressed them, whenever they got an opportunity, or, whenever, they could snatch such opportunities. Both institutions cried out for reforms. Both required the political vision, will and resources for reform based on the grievances of the people. If the reforms were internally generated and grounded in the struggle and demands of the people, they would have almost certainly taken a very different trajectory. For example, the judiciary, in particular the lower judiciary, could be improved significantly by directing resources to train judicial personnel, providing reasonable benefits to the staff, such as housing, transport etc., and by innovative structures to institutionalize people’s participation in judicial processes. Yet, that is not how “good governance” reforms are conceived. Structures parallel to existing ones are put up as a result of donor-pressure. The desirability and viability of such structures is hardly assessed within the countries concerned. One of the effects of setting up such structures is to undermine time-tested traditional state structures. Worse, reforms from the top instigated by donor conditionalities undermine the right of the people themselves to struggle for and conceive their own institutional reforms and set their own priorities. Furthermore, needless to mention, such top-down reforms conceived, prioritised and financed by the erstwhile IFIs and donors undermine the very basis of democratic governance, that is, accountability to the people. The “governors” are accountable to the “donors” and their consultants and advisors on “good governance” rather than the people. Where is then the so-called democracy, trumpeted so much, and in whose name, political power seeks legitimacy?

No wonder, in my own country, which perhaps is not the worst example in Africa of utter submission to hegemonic powers, the President cites the acclamation he receives from IFIs (not his own people) as an example of the success of his policies.

One cannot help being cynical about the whole good governance project. This is not to say that Tanzania, like many other African and non-African countries, including some in the North, do not require reform of their governance structure. But the point is what kind of reforms, in whose interest and conceived and implemented by whom. Democratic reforms, let it be said for the umpteenth time, is the prerogative of the people. It is the exercise of their sovereignty and their right to self-determination. That is what the struggle for independence and liberation was all about. It was the struggle of the African people to reclaim their humanity and dignity and the right to think for themselves and to chart their destiny. This was, and is, precisely the essence of anti-imperialist struggles. It follows, therefore, that economic and political conditionalities, including those on good governance, are an expression of the reassertion of imperial domination, however it may be labeled.

Alternative to Good Governance

What I have presented so far may sound conspiratorial and one-sided. I am not a believer in conspiracy theories. Nevertheless, it remains a historical and contemporary truism that global hegemonic power, or, imperialism, is an anti-thesis of democracy. Together with local reactionary classes and groups, imperial powers have played a major role in suppressing democratic struggles of the people (Shivji 2002a). Neo-liberal politics, thrust down the throats of African people, is a corollary of the economic policies of the Structural Adjustment Programmes based on the Washington Consensus, mindlessly propagated and imposed by the World Bank and IMF. SAPs have wreaked havoc in the third world, particularly African economies. Serious studies testify to this. I need not cite any suspect sources in support. Suffice to quote the former Chief Economist of the World Bank, Joseph Stiglitz:

The application of mistaken economic theories would not be such a problem if the end of first colonialism and then communism had not given the IMF and the World Bank the opportunity to greatly expand their respective original mandates, to vastly extend their reach. Today these institutions have become dominant players in the world economy. Not only countries seeking their help but also seeking their “seal of approval” so that they can better access international capital must follow their economic prescriptions, prescriptions which reflect their free market ideologies and theories.

The result for many people has been poverty and for many countries social and political chaos. The IMF has made mistakes in all the areas it has been involved in: development, crisis management, and in countries making the transition from communism to capitalism. Structural adjustment programs did not bring sustained growth even to those, like Bolivia, that adhered to its strictures; in many countries excessive austerity stifled growth; … (pp.17-18)

Such systemic failures can hardly be described as “mistakes”. Rather, as the author himself observes elsewhere, they are the result of the interests that drive these institutions: ‘… the policies of the international economic institutions are all too often closely aligned with the commercial and financial interests of those advanced industrial countries.’ (ibid., 19-20) So, ultimately, we are not dealing with mistaken policies or conspiracy, but rather with the systematic forces reflecting the unequal relationships of the global system.

I should perhaps also clarify another point. In spite of what looks like the omnipresent and omnipotent global power, neither the neo-liberal discourse nor the imperial domination have been accepted without intellectual and practical resistance of the people. While it is true that we are generally in the trough of the revolution, and democratic and national liberation struggles have been aborted and pre-empted, African intellectuals have continued to pose alternative discourses based on bottom-up struggles and aspirations of their people. Liberal politics have been countered by social democratic politics and democracy by ‘new democracy’. In a summing up of a debate on democracy, Archie Mafeje, chiding his fellow African intellectuals for parroting liberal democracy, succinctly observed:

Regarding the present conditions in Africa, this can refer only to two things: first, the extent to which the people’s will enters decisions which affect their life chances, and, second, the extent to which their means of livelihood are guaranteed. In political terms the first demand does not suggest capture of ‘state power’ by the people (workers and peasants) but it does imply ascendancy to state power by a national democratic alliance in which the popular classes hold the balance of power. The second demand implies equitable (not equal) distribution of resources. Neither liberal democracy, imposed ‘multi-partyism’ nor ‘market forces’ can guarantee these two conditions. It transpires, therefore, that the issue is neither liberal democracy nor ‘compradorial’ democracy but social democracy. (in Chole & Jibrin, eds. 1995, 26).

In an article written in the late 1990s, I argued that it was ‘new democracy’ that was on the African agenda (Shivji 2000). The three critical elements of new democracy are popular livelihoods, popular power and popular participation. The term popular is meant to convey three meanings.

First, popular is used in the sense of being anti-imperialist. This is well captured in the people’s own perception of what is called Second Independence. Given the continued and even more blatant imperialist domination that I have described, the new democratic consensus cannot be constructed without addressing the issue of liberation from imperialism, which is the anti-thesis of both ‘national’ and ‘democratic’. But at the same time the term ‘popular’ is used to transcend the limits of the term ‘national’. It is meant to highlight the limits of the first (national) independence which took the form of anti-colonialism. The independence or first liberation consisted in constituting state sovereignty; the core of the second liberation consists in resolving the issue of people’s sovereignty.

The second meaning in which popular is used refers to the social basis of the project. The social core of the new consensus has to be popular classes, i.e. a popular bloc of classes. While its exact composition will of course differ, in many African countries the land based producer classes and the urban poor together with lower middle classes would constitute the ‘masses’. This is where, to use Lenin’s phrase, ‘serious politics begin’ - ‘not where there are thousands, but where there are millions’ (quoted in Carr 1961, 50).

The third meaning that I attach to popular is in the sense of popular perceptions, custom, culture and consciousness. Custom and culture, not in the vulgar sense of atrophied or unchanging tradition but rather in the sense of a living terrain of struggles where the old and the new, the progressive and the reactionary, jostle and struggle to attain hegemony. Needless to say that culture and traditions constitute one of the most important ideological fronts (albeit neglected in our social science discourses). This is where, in the words of Raymond Williams, the dominant culture either tries to harmonize or demonize the cultures of resistance. (See also Wamba 1991)

Such alternative discourses and struggles of the people have no doubt been aborted and pre-empted by the neo-liberal rhetoric. This is only a passing phenomenon, though. So long as neo-liberal politics and economics are incapable of addressing the real life-conditions of the African people, they have little legitimacy. The “good governance” discourse thus turns out to be profoundly a discourse of domination rather than that of liberation and democracy.

Conclusion: The Intellectual Tasks Ahead.

It is now time to conclude. In this, rather long-winded presentation, I have tried to argue that the great democratic struggles of the African people expressed in their independence and national liberation movements remain incomplete. The so-called democracy constructed on ahistorical and asocial paradigms of neo-liberalism are an expression of renewed imperial onslaught, which is profoundly anti-democratic. It may as well proclaim: “Democracy is dead. Long live democracy.” The tasks of committed intellectuals is to recognize the new imperialism called globalization and articulate the ideologies of resistance expressed in popular struggles (see, Shivji 2002b). African intellectuals must join issue with neo-liberalists and expose the paucity of concepts like “good governance”.

The post-cold war renewal of imperialism is even more ferocious than classical colonialism. It is led by a dangerous and unrestrained super-power undermining the very basis of democracy, the right of the peoples to self-determination, that is, their right to think for themselves. It is playing god by deciding for the rest of the world, what is good and what is evil, who is a friend and who is a foe, who are people and who are non-people.

Commending Tanzania for its new foreign policy based on ‘economic diplomacy’, the US Ambassador to the country patronizingly told the parliamentary committee on foreign affairs:

The liberation diplomacy of the past, when alliances with socialist nations were paramount and so-called Third World Solidarity dominated foreign policy, must give way to a more realistic approach to dealing with your true friends – those who are working to lift you into the 21st century where poverty is not acceptable and disease must be conquered. (The Guardian, 29th July, 2003)

Here is an imposed friendship! During the nationalist phase, propounding his non-aligned policy Nyerere could say, ‘We shall not allow our friends to choose enemies for us’. The current African leaders dare not even whisper so. But no people can accept to live under bondage for ever. Empires have come and gone. This too will go. Thirty years ago, Mwalimu Nyerere, talking about apartheid South Africa said, and this remains a fitting reply to all arrogant super powers:

Humanity has already passed through many phases since man began his evolutionary journey. And nature shows us that not all life evolves in the same way. The chimpanzees - to whom once we were very near - got on to the wrong evolutionary path and they got stuck. And there were other species which became extinct; their teeth were so big, or their bodies so heavy, that they could not adapt to changing circumstances and they died out.

I am convinced that, in the history of the human race, imperialists and racialists will also become extinct. They are now very powerful. But they are a very primitive animal. The only difference between them and these other extinct creatures is that their teeth and claws are more elaborate and cause much greater harm - we can see this even now in the terrible use of napalm in Vietnam. But failure to co-operate together is a mark of bestiality; it is not a characteristic of humanity.

Imperialists and racialists will go. Vorster, and all like him, will come to an end. Every racialist in the world is an animal of some kind or the other, and all are kinds that have no future. Eventually they will become extinct.

Africa must refuse to be humiliated, exploited, and pushed around. And with the same determination we must refuse to humiliate, exploit, or push others around. We must act, not just say words. (Nyerere 1973, 371).

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