2008 Highlights

African countries have made significant progress in improving governance practices, but considerable challenges remain. The advances made by Africa are real, albeit fragile and vulnerable, in the contex of an increa singly volatile international context. The need to strengthen the institutions of governanceremains a pressing issue for some RMCs and the Bank actively supportsits member countries in this endeavor. Public sector reforms help to build a more conducive environment for domestic and foreign investment and for private sector development, since they promote efficiency, accountability, and transparency in public finances and in procurement practices. The Bank Group actively supports the emergence of an African agenda for good financial governance. Good financial governance provides the foundations upon which to build effective, capable, and accountable states, able to deliver basic services to the poor. It is also critical to expand the fiscal space to respond effectively to exogenous shocks and volatile global markets, via more efficient domestic resource mobilization and more effective public expenditure.

The Bank Group has reaffirmed governance as one of its core strategic pillars. In May 2008, the Bank approved the Governance Strategic Directions and Action Plan for 2008–2012 (GAP), which defines the basis for greater selectivity in the Bank’s support to governance reforms in Africa. The GAP embodies a number of earlier Bank policies and recommendations, including:

  • a policy on governance;
  • a review of governance activities in 2006; and
  • the recommendations emerging from the ADF Deputies’ Report of 2008 and the Report of the High Level Panel (HLP).

In line with the Paris Declaration on Aid Effectiveness (2005) and the Accra Agenda for Action (2008) on the use and strengthening of country systems, the Bank aimsto help RMCs to:

  • improve economic and financial governance through increased support to revenue, budgeting and auditing systems and standards;
  • reduce corruption risk through the strengthening of public procurement systems;
  • enhance transparency and accountability in the management of natural resources by acceding to the Extractive Industries Transparency International (EITI); and
  • support parliamentary committees and NGOs working to enhance efficiency, transparency and integrity in the management of public finances.

The Bank Group supports economic and financial governance reforms through a combination of instruments, including policy based lending, budget support, investment projects, special initiatives, nonlending activities, and upstream analytical and advisory work. These instruments are deployed at the country, sectoral, and regional levels. In 2008, the Bank financed 17 governancerelated operations amounting to UA 682.0 million, which represents 21.5 percent of total Bank Group loan and grant approvals for the year.

At the sectoral level, the Bank continued to concentrate on improving governance and promoting integrity, particularly in high-risk sectors such as infrastructure, by supporting initiatives such as:

  • The Investment Climate Facility for  Africa (ICF), which aims to strengthen the enabling environment for the development of the private sector and the investment climate in areas such as property rights, taxation and customs, and business registration;
  • The Extractive Industries Transparency Initiative (EITI), which aims to improve transparency and accountability in the extractives sector. To date, the Bank has contributed to the achievement of EITI candidacy status of 3 countries – Liberia, Madagascar, and the Central African Republic – while Botswana’s candidacy is expected in early 2009.
  • The Making Finance Work for Africa (MFW4A) partnership to support the efforts of African countries to strengthen their financial sectors as a means of accelerating economic growth and reducing poverty.

The Bank also lends its support to regional and subregional institutions, initiatives and networks that promote practices, standards and codes of sound economic and financial governance. The Bank support targets, in particular, improvements in the following areas:

  • enhancing country peer review processes and strengthening the review mechanism through the Africa Peer Review Mechanism;
  • domestic revenue mobilization through support to reforms in tax and customs policy and administration, notably through its endorsement of the African Tax Administrators Forum (ATAF);
  • country budget practices and standards through, inter alia, support to the Collaborative African Budget Reform Initiative (CABRI);
  •  country public procurement systems and  standards, notably through the harmonization of those standards by RECs (UEMOA, COMESA); and
  • country systems in government auditing and financial oversight, notably through continued support to the African Organization of Supreme Audit Institutions (AFROSAI).

Submit your feedback