New Hurdles in Economic Reform

by Jaindi Kisero for The Nation (Nairobi)

Unless you keep tabs on trends in economic reforms in Africa, an episode in Ghana last week might have escaped your attention. A bench of supreme court judges declared the country's so-called "first track courts" as unconstitutional.

You will remember that these were special courts, which, on the advise of the International Monetary Fund (IMF), were introduced by the authorities in Accra to hasten the hearing of corruption cases.

The courts made a name in Accra and were hearing cases involving cronies of powerful politicians and senior civil servants. In one fell swoop, the judiciary has dealt a fatal blow to Ghana's anti-corruption reform programme.

The upshot is that the authorities must now decide what to do with cases which were still before the special courts.

It was almost a replay of what happened in Kenya a few years ago, when in the middle of hearing high-profile cases, the Kenya Anti-Corruption Authority (Kaca), was declared unconstitutional.

To appease the IMF, we pledged that we would put in place a special anti-corruption police force to take over cases which were investigated by Kaca and that we would take these cases to court.

However, the latest we have heard is that the authorities are reluctant to prosecute two high-profile cases involving a High Court judge and a senior official of the Office of the Attorney General, both of which were investigated by Kaca.

It is also noteworthy that, three years after we made a commitment to the IMF to introduce a code of ethics Bill, we have yet to make any major movement on this score. Neither have we succeeded in passing an economic crimes Bill.

Important lessons emerge from the trends we are observing in both Kenya and Ghana.

First, economic reform is doomed when governments are forced to introduce measures which prevent leading figures and cronies of powerful people from seeking economic rents.

Secondly, powerful individuals bent on reaping state-generated largesse will always resist structural reform or distort them in a manner they can exploit.

This is why the recently-established Public Procurement Appeals Board is creating much anxiety within the Government.

Inaugurated only a few months ago, it has been cancelling one irregular multi-million contract after another - and in the process jeopardising the interests of powerful rent seekers and well-connected businessmen.

Indeed, if the Government does not move quickly to introduce laws to grant independence and autonomy to this nascent institution, it might face a predicament similar to Kaca's or Ghana's anti corruption courts.

Lately, astute African leaders have been leaving it to the judiciary and to the National Assembly to torpedo reforms which threaten to block them and their cronies from irregularly clinching inflated government contracts.

In the case of the Procurement Appeals Board, there are reports that powerful people at the Treasury have been pressurising its secretariat to rescind some of the tender cancellation which it effected recently.

Clearly, for the new public procurement reform programme to work, we will need to introduce security of tenure for both members of the board and members of its secretariat.

We will also need to spell out the qualifications and experience of people who will sit on this important board.

Only a secretariat which will not bend to the whims of ministers, permanent secretaries and the Attorney General will be able to prevent corruption in public procurement.

What has happened in Kenya and Ghana should jolt the IMF into rethinking its role in promoting the so-called governance reforms. The trend we see is one where the Fund has performed better when it stuck to its traditional role of promoting macro economic reforms.

It has scored impressively when dealing with the exchange rate, price controls, interest rates controls, liberalisation of trade and budgetary reform.

Multilerteral and bilerteral donors, who have long-term relationships with African governments, have proved more successful in dealing with governance issues.

Part of it has to do with the fact that the Fund is not perceived very well by most African politicians and policymakers. It has proved woefully deficient in negotiating skills needed to guide African governments into successfully introducing deep institutional reforms, and especially those that require introduction of new anti-corruption authorities and "first track" corruption courts.

Many African governments are also experiencing difficulties in getting parliaments to pass new anti-corruption laws. In most cases, parliaments have almost impulsively argued against passing the new laws, citing sovereignty. They have also resisted having to discuss laws drafted by foreigners.

Implementation of far-reaching institutional changes - involving introduction of new laws and new institutions - require a much longer time. It cannot, therefore, be successfully handled within the short time-frames of most IMF programmes.

Thus, as the Fund continues to re-engineer itself, it should consider keeping off the governance area.

When it comes to introducing new institutions and laws in Africa, there will be no short-cuts to progress. The road to public sector reforms will be long and tortuous. In Kenya, we have a situation where the regimes of both President Kenyatta and President Moi treated the civil service as personal property.

They filled its ranks with political appointees and selected top administrators on the basis of personal loyalties. In turn, these public officials treated their work as personal service based on duty and respect for their patrons.

The result is that the bureaucratic virtues of hierarchical authority and efficiency have over the years been eroded.

Distribution of state jobs by political patrons to followers came with severe negative consequences. It fostered unpredictability in the civil service and demoralised honest public servants.

The civil service reform programme which the Government has been implementing in the past few years is a good starting point to restoring meritocracy in the civil service.