African Development Bank’s new economic governance strategy advocates bold public finance reforms

The strategy proposes bold reforms in the management of public finances to eliminate revenue ‘leakages’ and ensure an efficient, productive, and transparent use of scarce resources

By NLM Writer

The African Development Bank on July 2, 2021 launched its Strategy for Economic Governance in Africa (SEGA), aimed at fostering transparent and accountable governments and institutions to secure inclusive, sustainable development.

Amid the ongoing Covid-19 pandemic, which has  exposed African countries’ weak public financial management and service delivery and vulnerability to exogenous shocks, the strategy proposes bold reforms in the management of public finances to eliminate revenue ‘leakages’ and ensure an efficient, productive, and transparent use of scarce resources.

“It is difficult for Africa to take off without transparent and accountable governments and strong institutions capable of driving a prompt, sustainable and inclusive recovery and ensuring economic resilience,” said Angola’s Minister of Finance, Vera Esperança dos Santos Daves, at the virtual launch of the strategy, attended by government ministers, and representatives of the private sector, academia and international institutions.

“We are very delighted that it will contribute to promoting public sector effectiveness at national and subnational level, thus stimulating structural transformation in our throughout the continent, and ensuring that our people participate in public sector governance,” the minister said.

SEGA proposes tougher anti-corruption measures in the public and private sectors. This includes the establishment of systems to monitor and hold governments accountable for the delivery of public service and the elimination of corrupt practices.

“The African Development Bank is uniquely positioned to implement this new strategy, building on its unparalleled knowledge and understanding of the African context, and also our credentials in good governance. The quality of life of our citizens depends on it. The future of our continent depends on it,” said Swazi Tshabalala, AfDB’s Acting Senior Vice President.

This event comes at a crucial time as African countries look to recover from the crisis caused by the Covid-19 pandemic

The strategy document also outlines interventions to strengthen African governments’ domestic mobilisation of resources, and urges governments will embrace the reforms recommended in SEGA at a critical time the African economy is gearing itself to build back better and greener.

SEGA was developed through consultation with governments and non-state actors across Africa. It replaces the Bank’s Governance Strategic Framework and Action Plan (GAP-II), which covered the 2014-2020 period.

Approximately a fifth of the Bank’s loan portfolio covers governance projects, including macroeconomic and public financial management, sector governance, and enhancing the business climate. In the last three years, the Bank has approved 80 governance projects worth $7.85 billion.