Sub-Saharan Africa Reveals Lessons for Governance

IMF News, June 23, 2022

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Countries in the region have made important strides in tackling corruption, with some outperforming emerging market and even advanced economies.
New IMF book Good Governance in Sub-Saharan Africa highlights Botswana, Rwanda and Seychelles as leaders in improving governance.
Virtual launch included a panel moderated by Deputy Managing Director Antoinette Sayeh.
Publication date: June 23, 2022.

"The need for good governance has become more urgent. It’s about more than wasting money; good governance enables growth." — Deputy Managing Director Antoinette Sayeh

High level of political commitment to good governance and transparency, indicated by:
- How a country’s budget is formulated and presented.
- Degree of independence of the central bank.
- Commitment to declaring the assets of key public officials and publishing audits.
Respect for the rule of law and property rights.
Ensuring efficiency, transparency, and public oversight of investments, especially public procurement oversight to control project costs.
Access to information.
Innovation and technology to help governments deliver on priorities.

Poor governance and corruption have a negative impact on economic growth, distort public spending, and undermine domestic revenue mobilization—an estimated tax revenue losses globally of US$1 trillion.
The Fund has been working with countries on governance for over 20 years.
The need for good governance is more urgent amid multiple crises: the COVID-19 pandemic, the war in Ukraine, and climate change.
IMF efforts focus on reducing vulnerabilities to corruption by strengthening governance in six core state functions:
- central bank governance,
- financial sector governance,
- fiscal governance,
- market regulation,
- rule of law,
- anti-money laundering.
The IMF works with countries and development partners to develop and implement comprehensive governance reform strategies, coordinated in part by the IMF’s network of 17 capacity development centers around the world, six of which are in Africa.

Make more information available to the public to facilitate accountability.
Ensure the tax burden is distributed equitably and public spending targets the sustainable development goals: reducing poverty, increasing access to health and education, and protecting the environment.
Political leaders should set examples by publishing their assets and creating incentives to fight corruption via anti-corruption agencies and the court system, generating a governance dividend: higher and more inclusive growth through stronger and more transparent institutions.

E-government services are expanding in Sub-Saharan Africa but the region still lags others; the trend accelerated during the COVID-19 pandemic.
Examples of digital use during the pandemic:
- (i) South Africa’s Western Cape online platform for remote teaching;
- (ii) online applications in Sierra Leone to track quarantine periods and deliver services like food delivery;
- (iii) robots and drones deployed in Rwanda to reduce health workers’ exposure to potentially positive COVID-19 patients;
- (iv) South Africa’s chatbots to reduce the spread of false information about the virus.
Digitalization can reduce the perception of corruption and improve institutional quality, but digital reforms must be sequenced and prioritize education to ensure broad benefits.

Additional controls are needed to ensure emergency funds are well spent.
Public Financial Management (PFM) processes need to be clearly defined; when funds fall outside the regular PFM process, develop and publish standard operating procedures covering proposal submissions, reporting requirements, and well-defined roles and responsibilities. Ghana is cited as including elements of sound PFM into their COVID-19 fund operations.
Agility of checks and balances is critical; rapidly identifying issues can help fix problems during emergency responses. Supreme audit institutions (SAIs) can produce “real-time” audits. SAI reports from Kenya, Sierra Leone and South Africa are highlighted as early examples.

Source: IMF African Department, "Sub-Saharan Africa Reveals Lessons for Governance", June 23, 2022.