By Tanu Jalloh
It was the Minister of Finance and Economic Development, Dr Samura Kamara, who, in 2012, told the Organisation for Economic Cooperation and Development (OECD) that aid was as critical and imperative to Sierra Leone’s current growth aspirations as the autonomy to decide on its efficiency was necessary. That was the kind of resolve it took to initiate his government’s effort at achieving aid effectiveness in the last four years.
In an OECD report titled: ‘Monitoring the Principles for Good International Engagement in Fragile States and Situations: Country Report 5: Sierra Leone,” the expert economist, a former governor of the central bank of Sierra Leone who is said to have had the backing of Sierra Leone's international donors and supporters of the Bretton Woods system, argued that it was mutually good that his government and donor partners (aides) should work together to make aid work as productively as possible. In the words of the government, such resilience reflects Sierra Leone’s commitment to stay the course with its economic and structural reforms geared towards macroeconomic stability.
In essence the minister was saying that aid must not attract conditions that stifle governments from determining what is best for them and their peoples. His temerity may have been informed by recent prospects in the overall economic growth, with self-generated funds for development almost certain in the coming years. The International Monetary Fund has provided the morale in its recent projections probably placing the country’s economy in its healthiest state since the war, twelve years ago. Most sectors – agriculture, mining, the financial sector and small scale business in the private sector - have got a prop up; the legal backing, the congenial corporate environment and trade concessions are all incentives.
As at 2010 aid constituted approximately 20% of the country’s gross domestic product (GDP) alone. However, this government has come under serious attacks from critics, sometimes vile and vain, on how tall a toll aid dependency has taken, is taking and would take on the people if domestic revenue generation were not sanitised. Aid effectiveness starts with how much a government is able to offset or service a good portion of its budget based on prudential management of funds it collects locally. The President, Ernest Bai Koroma, has thrown down the gauntlet and in the process called on all to put shoulders to the wheel to make Sierra Leone an aid benefactor by 2017 and not a perpetual aid beneficiary.
But there has always been a vacuum in the relationship between aides and the aid-recipient countries. This has undermined the ultimate essence of aid to poor countries in the first place. The question is: Who takes responsibility when aid provided by IMF and other donor partners is channeled through frameworks that do not align with extant government priorities? Sometimes this government, like its predecessors, has been forced to undertake activities that it never was prepared for before funds were provided, usually with conditions.
In April 2012 there was a report commissioned by Save the Children, Norway, the Norwegian Church Aid and the Norwegian Forum for Environment and Development to analyse whether aid facilities were living up to expectations of an enhanced focus on poverty reduction and more flexible conditionality, and thereby allowing IMF lending to make a greater contribution to attaining the Millennium Development Goals (MDGs). According to its findings one major criticism levelled against IMF programmes has been that excessively restrictive macroeconomic frameworks seriously constrain the ability of low-income countries to increase spending on essential services such as health and education. Another reproach against past IMF programmes was that they often contained structural reform conditions that were inimical to increasing social sector spending and promotion of the Millennium Development Goals.
The question is: What happens when a donor imposes itself on a poor country? And the answer is: a recipient government shelves other home-developed and well-thought-out agendas for those conditions that are forced down their throat. That is why most developing countries have struggled to account for aid money whose implementation was not mutual. Thus, aid is misdirected with obviously nothing to show for it.
Report has shown that budget support to Sierra Leone has also come laden with conditions, opening up the heart of the government to donor influence. In essence, the government must implement complicated policy reforms and achieve certain results. Conditions have been decided upon by donors who then present their proposal to the government, whose main room for negotiation lies with how ambitious the condition may be, and not with whether the condition is an appropriate priority for the government.
Against this backdrop, the government needs to improve coherence between the different development partners as much as it needs to improve structures for aid coordination, harmonisation and alignment. At least that is what the Sierra Leone Aid Policy has set out to achieve. In line with international agreements on aid effectiveness, the key objective of the said policy would be to assert government’s leadership in aid coordination, harmonisation and alignment to ensure that aid is used effectively: in the pursuit of government priorities, to strengthen the institutions of the state, and in a way that promotes an effective division of labour amongst donors.
Back to finance minister Dr. Kamara who says this requirement stems from both international agreements to which Sierra Leone and many of its partners are a signatory such as the Paris Declaration on Aid Effectiveness, the Accra Agenda for Action, the OECD DAC Principles for Good International Engagement in Fragile States, and the Government’s overarching vision for making aid work efficiently for the people of Sierra Leone. It is also consistent with the internal Memorandum of Understanding between the Government of Sierra Leone and its multi donor budget support partners (MDBS). Accordingly, this document sets out the first ever comprehensive aid policy of the Government of Sierra Leone.
Meanwhile, there exist huge challenges to meeting its commitments to standards set by the above instruments. In September 2007 after successful democratic elections, the Koroma-led administration was voted in and shortly afterwards the Ministries of Finance and Development and Economic Planning were merged into a single entity, bringing all aid coordination tasks under a single ministry. Appreciating the opportunity for improving the coherence of aid architecture and systems presented by the merger, the Minister of Finance and Economic Development revived the aid policy process in April 2009. Institutionally, the Ministry of Finance and Economic Development (MOFED) is the key focal point for multilateral and bilateral aid to Sierra Leone. Consistent with international relations protocols, some bilateral aid, including commodity aid, is channeled through the Ministry of Foreign Affairs and International Cooperation, but subsequently integrated into MOFED aid management framework.
The aid policy further outlined the main challenges for effective aid coordination in Sierra Leone as follows:
- The vicious cycle of lack of ownership and alignment. The main challenge to date has been felt in the interlocking areas of ownership and poor alignment. GoSL ownership of aid has been lacking, partly due to capacity constraints, leading to weakened incentives for alignment and the deterioration of local systems. Past absences of clear GoSL leadership and fragmented systems of coordination in aid matters have undermined attempts to achieve a shift of ownership in the Government’s favour. From the donor side, despite much alignment in principle, there is a continued tendency for some donors to pursue their own agendas in practice, often in the absence of clear strategies against which to align. A high number of requirements/perceived “micro-management” of projects contribute to overload and undermining of local systems.
- Lack of aid transparency. Accurate and detailed aid information is critical for effective coordination of aid. Despite a GoSL Development Assistance Database (DAD), donors have been slow to come on board and often underrate the importance of provision of accurate and timely aid information in practice. This is further exacerbated by multiple systems of reporting both by Government and development partners, leading to ‘reporting fatigue’. Consequently, information reported for Official Development Assistance (ODA) is often of low quantity and quality. A lack of coordinated reported information relating to NGOs is a further problem, creating severe constraints for effective aid coordination. In addition, aid reported on budget is currently at a very low percentage (30% in 20075), leading to difficulties for full alignment of aid.
- Lack of aid predictability. A lack of clearly defined multi-year aid commitments has made it hard for the Government to plan effectively in the medium to long-term. There is also a lack of predictability with relation to the disbursement of funds. This is particularly important given the dependence of Sierra Leone on aid, which increases the vulnerability of the economy to fluctuations in aid volumes. While direct support to the budget has been helpful, some donors have however, had cause to withhold committed amounts when GoSL has been unable to meet its commitments against predefined benchmarks, causing fiscal constraints.
- Limited confidence issues between GoSL and partners. The channelling of a large portion of aid through non-Government mechanisms illustrates the need for stronger mutual confidence. In addition, there is limited confidence between implementing partners (primarily NGOs) and local levels of Government.
- Inverted pyramid donor base. Sierra Leone has a relatively small number of major donors. This presents both an opportunity in terms of harmonisation and a challenge in terms of potential dominance by few major donors over both other donors and the Government. In addition, there is a plethora of institutions lending small-scale support across sectors, posing a serious challenge to aid coordination.
- Technical Assistance and Salary top ups: There is questionable value in domestic capacity creation through ‘technical assistance’, often donor-driven, non-transparent and high-cost. Contracting of consultants can occur in an ad-hoc manner without in-depth analysis of existing capacity gaps and how these might be addressed sustainably. Equally, the setting up of Project Implementation Units (PIUs) and salary top ups to complement the functions of the Government has become a distinctive feature of Sierra Leonean aid. PIUs are valuable for enhancing the functions of the state; however, a number of these are not fully integrated into Government systems and have proved to be unsustainable, sometimes even duplicating existing Government systems.
