Capacity building: Is the carrot and stick model the option?

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“We are looking at a new model that’s based not just on aid and assistance, but on trade and partnership. Increasingly, what we want to do is use whatever monies that we’re providing to build capacity . . . Ultimately, the goal here is for Africa to build Africa for Africans”, so said United States President Barack Obama, speaking in Tanzania, as quoted by South Africa’s Financial Mail, on the final leg of his recent African tour.

Report by Tapiwa Nyandoro

Does the statement signify a change of direction from the likes of regime change agenda and the perennial humanitarian aid?

What can Africans contribute to the formulation of the “new model” in the way aid is channelled to Africa?

From his statement and actions in his own country, the US President would like to see a more formalised strategic approach with a defined exit point as opposed to the current situation of drifting from “crisis to crisis”.

Egypt is a case in point. For years it has received military aid. What good has this ever done to the two countries?

Zimbabwe needs aid going forward. Organic growth is too slow for most people living in abject poverty.

Many go to bed hungry literally every night. A lot of aid, therefore, comes unsolicited for humanitarian reasons.

To get out of this abominable situation the goal for “Africa to build Africa for Africans” must be attained. A dispassionate look at Africa shows that something is wrong with its people and its institutions, in particular political parties.

Resource endowments have manifested themselves as resource curses instead of blessing. To remedy the situation capacity to do the right thing has to be built up. The question is how?

Do you start with the legislatures as United Nations Development Programme is trying to do in South Africa and Zimbabwe and possibly among other African countries?

What good does that do when the legislators are all focused on short term issues, eyes glued on the next election?

Or do you start with the Judiciary and law enforcement agencies, focusing on values and ethics, and if so, how?

The World Bank and the International Monetary Fund (IMF) like focusing on the Executive arm of government which then usually takes the back seat. Both mentor and the mentored then try to run away from accountability when things do not go according to plan.

A closer look at the Southern African situations shows that the politics of patronage and corruption may be the problem to a large extent.

If that is the case, then the cure to improving institutional and administrative capacity should have a political benefit to it. Borrowing from Mike Heseltine’s suggestion to the British Treasury, as regards growing the economy of the de-industrialised British North, the International Co-operating Partners and donors could pool all the money they intend to spend on a aid recipient country, then call for local government, groups of local politicians and businesses, government ministries and departments, State institutions such as the Judiciary, Parliament, prisons, police, public utilities, and even private companies to bid for a share.

The share may be disbursed as a loan, equity, grant or a combination of any of the three as applicable, to deserving bids.

Bid evaluation criteria would include the improvement in the quality of governance, a project’s merit, sustainability issues and the quantum of benefit to the broader society.

Overtime voters are likely to notice who amongst them is utilising aid correctly and most likely reward them at the polls.

The same strategy could be applied at continental level with countries being the bidders. The Global Fund for Aids, Tuberculosis and Malaria seems to use a similar system.

Governments would have to sign onto the programme, with serious international censure/ repercussions for any politician, regardless of status, who may be found by an independent tribunal, as acting unlawfully and, or in bad faith, detrimental to the interests of the poor.

The second option for building capacity in poor countries intending to build their economies, so as to get out of the permanent donor recipient status, is to encourage the proper use of a country’s loans and other resources.

Countries need to focus on productive investments and less on prestige non productive investments.

This is more so if they are borrowing in foreign hard currencies.

The dormant IMF proposal for a Sovereign Debt Re-structuring Mechanism (SDRM) ought to be adopted and adapted to serve as a bankruptcy system for governments, and given some teeth so that the ruling elite are to some degree held accountable, as what happens to company executives and directors faced with bankruptcy
The SDRM would allow governments and, or their benefactors to call for a “standstill” preemptively on their bond payments before entering the costly downward spiral of borrowing at ever higher rates in effort to avoid default.

And there should be consequences for senior politicians from the party in government as well as its Cabinet members held responsible for misuse of resources or application of policies detrimental to the national economic well being.

The relevant Judiciary, law enforcement and political leadership would then be barred from holding public office going forward.

This collective responsibility and collective punishment could help focus minds, curb irrational political promises and provide opposition at the highest levels of government to corruption, the scourge that keeps Africa from rapid economic growth, giving credence to the illusion that capacity is the problem.