Rampant corruption hinders resource mobilisation in Africa

COVID- 19 unmasked deficiencies and vulnerabilities in public financial management systems

Corruption and illicit financial flows ( IFF) are among challenges that continue to hamper effective resource mobilisation in the Southern African Development Community ( SADC) and Africa in general. According to Gamal Ibrahim, Chief of Section, Economic Governance and Public Finance Section, Macroeconomic Policy Division United Nations Economic Commission for Africa ( UNECA), if such leakages are not persistently addressed, they will continue to undermine the achievement of development gains and outcomes, short- changing aspirations for the inclusive development of Africa. He told a Consultative forum with civic organisations that while there are improvements in specific countries, Africa generally remains home to countries whose levels of corruption remain rampant.

“Allow me to recognise the SADC Parliamentary Forum as a trailblazer in the development of

Model Laws, with four similar standards already under its belt, namely on HIV and AIDS, Eradicating Child Marriage, Elections and Gender Based Violence. The development of the SADC Model Law on Public Financial Management is specifically intended to ensure a robust financial accountability framework for the region, which adheres to the highest standard of good governance, integrity and transparency. The development of the Model Law is expected to contribute to improved efficiencies of state entities that are charged with the task of collecting, managing and spending tax revenues, and to combat fraud, corruption and mismanagement of public resources in the region. This regional standard will, therefore, foster accountability, transparency, independence and modernity,” said Ibrahim. He revealed that for several years, ECA has been instrumental in efforts to improve Public Financial Management in Africa through providing technical advice, policy tools, guidelines, model legislation and generating the necessary policy recommendations to support countries in formulating the right PFM systems to improve the overall economic governance trajectory. These efforts, Ibrahim said are driven by the overarching goal of boosting domestic resource mobilisation among countries. According to Ibrahim, the consultative meeting is timely, coming at a time where COVID- 19 has unmasked deficiencies and vulnerabilities in “our public financial management systems, threatening development gains made over the last decade.” He added that this has emphasized the need to reinforce collaboration between the government and civil society in strengthening PFM systems. “Despite these efforts, PFM systems remain undermined by the phenomenon of IFFs, mostly at upstream end of resource mobilisation. IFFs facilitate the misuse of the public finances and erode public spending efficiency, through loopholes in public procurement and contracting motivated by anonymous company ownership and undeclared financial accounts. The AU- ECA High- Level Panel on IFFs from Africa led by former President of South Africa, Thabo Mbeki, found, a staggering $ 1 trillion flows illegally out of developing countries annually due to crime, corruption and tax evasion close to ten times the amount of foreign aid flowing into these same economies,” he told the meeting. He pointed out that PFM is an important tool for domestic resource mobilisation, a major focus of their work and driven by global and regional development Agendas- the 2015 Addis Ababa Action Agenda, Agenda 2030 for Sustainable Development and the African Union’s Agenda 2063. Ibrahim further stated that the success of these Agendas greatly depends on the ability of countries to generate and mobilize sufficient, predictable and timely financial resources. Development experience underscores that reliance on domestic resources enhances Africa’s ownership of public policy, strengthens accountability and reduces volatilities associated with external funding. Uncertainty around external finance coupled with Covid- 19 pandemic have refocused efforts at inward resource mobilisation, he said.