Promoting and Sustaining Good Governance
In 2000, the Bank adopted the Good Governance Policy to support Regional Member Countries’ governance reform in a more pro-active and purposeful manner. AfDB has reaffirmed the strategic priority it gives to governance, as one of its core strategic pillars and established a dedicated department in charge of governance – the Governance, Economic and Financial Reforms Department (OSGE) in the Operations Sector Vice-presidency (OSVP), as the anchor and catalyst for the AfDB’s work on governance.
The Bank’s Governance Strategic Directions and Action Plan will strengthen the implementation of its governance work by providing the basis for greater strategic selectivity, defining guiding principles for delivering results and achieving impact.
The operations include, inter alia, the enabling environment for private sector development, economic competitiveness, debt management, public expenditure management (budget preparation, execution and control, aggregate fiscal discipline, aggregate expenditure), revenue reforms, public procurement, audit and financial control, anti-corruption reforms, intergovernmental fiscal relations, fiscal decentralization and legislative budget oversight.
AfDB approaches include:
- Strengthening African Tax Systems African tax systems are generally characterized by low tax/GDP ratios. Despite intensive efforts so far undertaken by our partner countries with the help of bilateral and multilateral institutions, there is still room for reforms in tax policy and more pressingly in tax administrations.
- Establishing Transparent and Comprehensive Budgeting Procedures Positive economic developments in Africa are also based on national budgets that reflect a government’s political priorities. AfDB supports African countries in their efforts to develop concepts for transparent and reliable budget management.
- Promoting Accountability, Transparency and Enhancing Budgetary Control The credibility and reliability of governments of partner countries in managing their public finances depend upon regular auditing to ensure both the legality and efficiency of public expenditure. This requires an effective and independent system of financial control.
- Governance throughout the AfDB Governance is an issue that affects many Bank activities and nearly every department or unit within the Bank does some work on this critical issue.
- Supporting Fiscal Decentralization The AfDB supports African countries in their efforts to establish legally concise and sustainable intra-governmental fiscal transfer and tax-sharing systems that adhere to principles of fairness and accountability.
- Enhancing Capacities for Governance in Fragile States and Situations In fragile states, democratic legitimacy is often limited and government structures at all levels are fragmented and lack sufficient capacity to plan, manage and implement policies. These are particular demands on governance.