'Development depends on good governance. That is the ingredient that has been missing in too many places for far too long' according to President Obama.
For Kofi Annan, former UN Secretary General, 'good governance is perhaps the single most important factor in eradicating poverty and promoting development. However, in pursuit of these goals Africa, unfortunately, suffers from a leadership deficit.'
Mo Ibrahim, the Sudanese-born cellphone magnate, who sponsors the annual Ibrahim Index of African Governance in delivering recent findings said that 'the main problem impeding our (African) development is governance - or rather the lack of it. All good things start from good governance; all bad things start from bad governance.'
And for former UK Prime Minister Tony Blair ' the evidence is clear: Africa needs better governance. None of the other issues it faces will be overcome without it.'
Leading your country and being responsible for the future well-being and prospects of all of your people is surely the greatest honour that can be bestowed on any man or woman. And any person rising to this heavy position of responsibility should be determined not to let his/her people down.
Anyone assuming the mantle of leadership could consider heeding the advice of Sir David Brailsford, currently leader of Team Sky and former performance director of British Cycling, who put British cycling on top of the world. Writing in The Times he gave his opinion on successful leadership. 'Is it fit for purpose? Have we got the right people in the right places who have the knowledge, skills and expertise to lead? Leadership is about having a long-term perspective, dealing with change, inspiring others with a vision, asking why and why not, and not just how. It's about having values and beliefs and setting standards of behaviour and influencing and empowering everyone to live them on a day-to-day basis.'
In seeking to find this leadership a wise head of government should firstly look for 'AID'. But not the kind of aid given by rich countries, which so many poverty campaigners insist is vital for development, for this AID is far more important. Taking advantage of real and effective AID comes through appointing men and women with Ability, Integrity and Drive to head up the various departments of government/civil service. And merit should be the continuing determinant in all further appointments including the civil service: nepotism, where family and friends are favoured, should be avoided at all cost. All government ministers should then be required, under oath, to make a declaration of total assets held when appointed. At the same time government ministers and civil servants should all be well paid with the proviso that anyone found to be involved in any form of financial irregularity will be immediately dismissed and pursued for compensation.
Within days of being elected, with a strong team in place, the president/prime minister will be keen to get down to the business of trying to improve people's lives by giving them the tools to help themselves. For in the words of US President Ronald Reagan 'the greatest leader is not necessarily the one who does the greatest things; he is the one who gets the people to do the greatest things.'
And with this in mind a good place to start, particularly in Africa, would be to grant people title to their own land. African lives would be energised and potentially change overnight if they were allowed to own their fields and farms which would allow them to borrow money to make improvements. Currently most land on the continent is vested in local chiefs which means that it can't be used as security leaving people little chance to borrow money to forge advances.
Consideration should also be given to encouraging families to amalgamate their small plots into local co-operatives. This would have several advantages including being able to purchase machinery to do the hard work, larger fields, freeing up kids to go to school whilst also securing a future for families where the breadwinner is incapable of work.
In Africa where 75% of the population is engaged in subsistence farming food security remains elusive with many farmers barely able to provide enough food for their own families never mind having any left over to sell. Yet Africa's farmers, who are mainly women working on tiny plots, could grow about three times more food if they had government support in gaining access to essential inputs: fertilisers, pesticides, irrigation and access to local agricultural expertise. Currently African countries only allocate 4% of their national budgets to agriculture which is holding back progress and has resulted in Africa's annual food import bill reaching US$35bn. Doubling the amount spent would see massive gains.
Corporate Africa could be energised too if the bureaucracy involved in setting up and registering a business was minimal. In his book The Mystery of Capital Hernando de Soto relates to this kind of problem from his experience in trying to set-up a small garment workshop in Peru. Getting a group of his students together, they set to work to find and complete all the necessary documents that were needed to set up a small business on the edge of Lima. After 9 months of painstaking work and bus journeys to numerous government departments, they finally managed to register the business as a legal entity. And the cost of establishing this one man operation - over US$1,200 (£980) or about 30 times the average monthly wage. Is it any surprise then that most businessmen/women in developing countries find it too time consuming and expensive to register thus losing the advantages of becoming a legal entity which include being able to borrow money to expand. Setting up businesses is vital for jobs which in turn will grow the economy whilst bureaucracy like this which is found all over Africa is ludicrous and needs to be overhauled.
At the same time state monopolies should be broken up to bring in competition. And research and development encouraged.
Fledgling businesses/entrepreneurs/farmers/ordinary people need access to loans which often can be difficult to find. To this end banks and microcredit institutions should be encouraged to expand throughout the country.
Inward foreign investment would be encouraged by the setting up of an economic development agency which can fast track investors through the various procedures needed to start up a company. Here, however, to maximise opportunities those who control foreign businesses will first need to be convinced that property rights are secure, contracts can be enforced and sound economic policies are in place. For no matter how attractive labour costs might be, very little foreign direct investment (FDI) will arrive if international companies sense unpredictable government. However, with the boom in natural resource prices sub-Saharan Africa, with 12% of the world's population, accounted for 10% of global FDI in 2015 amounting to US$71.3bn down from US$88.5bn in 2014. Egypt with US$14.5bn, Nigeria with US$8.6bn and Mozambique with 5.1bn were the three largest beneficiaries. France with US$18bn was the largest investor followed incredibly by Greece with US$10bn. However, with the recent slowdown in China and commodity prices under pressure, 2014 was likely to be an annus mirabilis for investment in Africa.
By setting up in poor countries foreign firms bring in new technology, provide extra jobs and implement training and education programmes for their workers. And in time ancillary industries will spring up producing more jobs. And whatever goods are being produced will help the trade balance either by producing substitute goods for domestic use or through exporting them abroad.
To many poverty campaigners though foreign companies may seem to pay low wages but to workers in the developing world they pay well in relative terms. However, international labour standards in the number of hours worked, child labour and working conditions, should be always be adhered to.
particularly youth unemployment, in most African countries is unacceptably
high and steering energies into entrepreneurship
and economic activities must be a priority. However,
for this to happen educating the young is vital and plans should be drawn
up to ensure that ALL children will soon have access to at least free
primary school education. In African countries where numerous tongues
are spoken, English or French, perhaps depending on history, should be
taught in schools as a second language whilst all pupils should have a
solid grounding in grammar, mathematics, science and computing. In time
the aim should also be for universal secondary education with the more
able pupils going on to college or to university. The training of the
young to high standards is essential in our globally competitive world.
Infrastructure, too, should be upgraded so that good transport and communications can be established which would allow food supplies to be easily moved around the country in emergencies. Power shortages should also be tackled.
Whilst all this is happening the president/prime minister will also be keen to ensure that the institutions of the country are progressing under his/her government. This will involve, amongst other things, seeking to uphold the rule of law, building up the legislature, maintaining the independence of the judiciary/ central bank and protecting human rights. At the same time, devolved powers should be given to regional and district authorities so that local people can engage and have their voices heard.
For the old, the sick and the unemployed, there is in the West, a welfare system. Pensions for the old, incapacity benefit for the sick and unemployment benefit/jobseekers allowance for the out of work are now accepted as vital support there for those in need.
But what is wrong, particularly in rich countries, for the unemployed not doing some kind of 'voluntary' work e.g. tidying up cities/towns/villages or rivers/shores, support for the old and frail or even charity work in return for benefits? Taking the UK as an example those on jobseekers allowance, which currently stands at £72.40 per week, and with the living wage there currently set at around £8 per hour, why shouldn't able-bodied claimants not be expected to do voluntary work for just 9 hours a week? (£72.40 /£8.00) Now what would this pragmatic approach to unemployment do? It would not only give a face-lift to local communities, it would get the jobless out of their homes, motivate them, help them keep fit and active, and give them pride. Those seeking work should not be denied just because they can't find a permanent job whilst those of a lazy bent should not be permitted to sit at home and contribute nothing in return for taxpayer support. The bottom line should be the expectation that all able hands should contribute something towards their communities.
(In other parts of the world, particularly in east Asia, family support plays the vital role in supporting family members who have fallen on hard times.)
To pay for all of the spending any government undertakes taxation will need to be levied. And here left and right of the political spectrum often have differing views on how best to do this. However, both sides should be able to agree of the need to keep the tax system simple and easy to understand. (In the UK this is not the case and complexity seems to grow year on year in a tax manual that has increased from 11,500 pages in 2007 to 21,000 pages in 2015. As a result the UK tax manual is now the longest in the world and is 10 times longer than the Bible. Meantime Hong Kong gets by with just 300 pages.) Any taxation system needs firstly to encourage the work ethic whilst, at the same time, it should be progressive. To this end those at the bottom earning the basic living wage should be exempted from paying tax. Thereafter, as pay increases, a progressive system of taxation should employed with rates which could range, in 10% bands, from 10% to 40%. Once earned income is taxed at rates higher than 40% history shows that little extra revenue is raised as people seek ways to avoid or evade paying it and therefore higher rates of tax are counterproductive. Taxes should also be levied on unearned income at marginal rates. This means that for someone who pays income tax at 40% all interest and dividend payments received from his/her assets would also be taxed at 40%.
(If tax rates over 40% are counterproductive then any government would be wise to accept this situation and look for a pragmatic alternative. And the answer is simple: encourage wealthy people to become philanthropists and to support good causes close to their hearts. Perhaps Americans are best at this. For example, Bill Gates, founder of Microsoft, through the Bill and Melinda Gates Foundation has invested heavily in, amongst other things, helping combat HIV/Aids in Africa and together with Warren Buffet, chair of Berkshire Hathaway, has promised to give away the bulk of his wealth in his lifetime mainly to help tackle suffering in the developing world. Gates and Buffet have also, as part of the Giving Pledge, signed up 115 other American billionaires to do likewise. In the US philanthropy seems to be celebrated as part of the nation's culture with an estimated 98% of top taxpayers giving, on average, 7.4% of their income to charity. For Andrew Carnegie, the Scot who made his fortune investing in the American railroads, and the richest man of his day, there was no debate about this. For him 'the man who dies rich, dies disgraced' and Carnegie certainly put his money where his mouth was by, amongst other things, building libraries in towns and cities throughout the UK. He also believed that he would be doing his children no favours by leaving them wealthy.)
VAT could also be charged on goods and services but only on items that are not basics for the poor and on products like cigarettes, sugar drinks and alcohol that are known to be detrimental to health. An annual progressive county/district property tax could also be introduced to raise funds locally. And here for people who are house rich but cash poor a slice of their property could be taken in lieu of tax by the local authority and then sold to an in-house finance company. Inheritance tax should be levied on those with huge assets for in almost all poor countries extraordinary wealth is still concentrated in the hands of the few.
Corporation tax should be kept minimal so that companies can invest in future expansion helping to create even more jobs. Employment is vital in Africa as the earnings from every job created helps feed another nine mouths.
(There is widespread concern voiced by international NGO's and poverty campaigners in the West about what they see as tax avoidance by multilateral corporations (MLC's) as they seek to minimise taxes. As most African countries currently levy high corporation tax rates most MLC's invested in African economies try to minimise the amount of profits they have to pay there. This is mainly achieved through the setting up of subsidiary companies in countries with low taxes and then to move the paperwork regarding shipping costs, insurance charges, management fees etc., for the goods/agricultural products produced in Africa, through these in-house companies as the exports make their way for sale in the West. Thus, through the use of tax havens, most profits on these exports are taxed at a very low rate of corporation tax in a third country. And this poverty campaigners see as MLC's not playing by the book and denying poor countries valuable taxation which could be used in social services. MLC's are perhaps being unethical in doing this though they are strictly speaking not breaking any rules. The answer then has to be for poor countries to levy low rates of corporation tax and then all activity associated with exports could be moved to the country of origin thus creating many more jobs and reducing unemployment which will lead to higher tax revenues. Transfer pricing, though, needs to be seriously addressed whereby exports from developing countries are priced below their true value to reduce profits in a country with high taxes.)
comes to corruption, examples of this are not just found in the developing
world as the recent case involving FIFA, football's governing body, showed
with unexplained payments and allegations of flawed bidding in the award
to Russia of the 2018 World Cup and to Qatar in 2022. At the same time
there seems to be a certain regularity in the number of times funds seem
to go missing from the EU budget. However, corruption is more prevalent
in developing countries where the opportunities are greater. There corruption
comes in many guises including favouring friends for government contracts,
police using protection rackets, stealing from employers, etc. And it
usually has a devastating effect on economic life. In order to remove
this blight the president/prime minister should set an example by setting
up an independent body with power to investigate anyone at any time including
himself/ herself and all government ministers/civil servants. This will
reassure the people and any would be international investors that the
government is working earnestly for the good of the country. A free press,
too, would further help expose corrupt practices whilst helping to keep
the government on its toes.
In an age when boundaries are virtually guaranteed, is there any need for poor nations to spend billions of dollars accumulating sophisticated arms? For procuring expensive weapons surely is a waste of valuable foreign currency and is a major area for gross corruption. Most governments in the West now say they no longer supply arms to the poorest countries. We have to take their word for that but rich countries should go further and extend this ban to include all developing countries. Internal security should be the responsibility of the police backed by an army of appropriate size and border disputes should always be settled by continental organisations like the African Union, or the UN. War should be avoided at all costs for it destroy in days what has taken years to build. A good leader should never forget this.
in Central America, abolished its army in 1949 and now, sitting at 44
out of 195 in our own *World Governance League Table, the country has
never looked back. Meanwhile near neighbours Nicaragua, Guatemala and
Honduras languish below 110.)
So there should be no walking away when the going gets tough - governments need to stay focussed. And when their policies start to show results the economy will move forward rapidly, poverty indicators will decline, flight capital will start to return from abroad and even educated nationals who have been living abroad may consider returning. For at the end of the day there is no real debate: good government is the real 'wealth of nations'.
You would think, then, that good governance would be the first priority of the United Nations (UN). But you would be wrong. Even though ALL UN members have signed up to the UN Declaration of Human Rights, too many leaders are still unable or unwilling to lay the foundations for social justice and economic advancement preferring, instead, to run their countries as their own private fiefdoms. And, all too often, there is no challenge from any authority anywhere no matter how repressive a regime.
At the very least, though, when it comes to the giving of overseas aid, surely the rich developed nations of the world would seek to give their taxpayers money to governments in the developing world which are progressive so as to encourage good practice. Alas, here again you would be mistaken for due to a combination of political posturing, security intelligence, the need to secure vital supplies of natural resources, historical connections or the fear of being superseded by China, it means that for most OECD countries the quality of governance is not a priority.
The continuing losers in all this, of course, are the ordinary people of Africa who continue to eke out an existence from the land as they have done since biblical time.
In 2016, more than 70 years on from the setting up of the United Nations, this seems totally incomprehensible and surely those far-thinking political leaders who helped create the UN in 1945 never envisaged that there would still be no minimum standards of governance after all this time. But sadly that is the reality - and it is set to continue. For in the new UN Sustainable Development Goals comprising 17 goals (and 169 targets) which replaced the Millennium Development Goals, under pressure from African leaders, good governance does not feature as one of the goals. Definitely an own goal by the UN!
So today, the quality of governance throughout much of the developing world is the ELEPHANT IN THE ROOM: everyone knows it is a fundamental problem in too many developing nations but no western government, no multilateral organisation, no international NGO, few media organisations, no church and certainly no pop group appear prepared to confront it. And all of us should feel ashamed.
*FOR OUR UP TO DATE LEAGUE TABLE ON GOVERNANCE THROUGHOUT THE WORLD see 'News/Comments' and click on 'world governance league table'.
There is an acceptance in our modern age that democracy is the gateway to good government or as Sir Winston Churchill once put it 'democracy is the least worst form of government'. And remarkably this form of government was first attempted in Iceland as long ago as AD 930 with the setting up of the 'Althing' - the world's first parliament.
is the only political system that guarantees free expression whilst helping
to protect the people from economic and political catastrophes. This form
of government where the people are allowed periodically to freely choose
their own leaders encourages positive renewal as defeated political parties
need to keep reshaping their policies in order to make themselves electable
at the next poll. Today, according to Freedom House, it is estimated that
real democracy, where free and fair elections are held regularly, is now
found in 86 countries representing 55% of the population of the world.
Of the other countries in the world, some are pseudo democracies where,
although there are periodic elections, the ruling party is singularly
adept at retaining power and where, if the worst comes to the worst, in
the words of ex-Soviet leader Jo Stalin, "it's not who votes that
counts, it's who counts the votes." In yet other countries autocratic
regimes and military dictatorships range from the semi-tolerant e.g. China,
Cuba to the reprehensible e.g. North Korea, Syria.
And that can be seen today as according to Freedom House, in 2015, only 9 countries in sub-Saharan Africa were considered to be democratic - Benin, Cape Verde, Ghana, Lesotho, Mauritius, Namibia, Sao Tome & Principe, Senegal and South Africa. At the other end of the scale the rule of despots backed by the military still dogs too many nations even after 50 years of independence - Angola, Burundi, Cameroon, Central African Rep., Chad, Congo Republic, Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Mauritania, Rwanda, Somalia, South Sudan, Sudan, Swaziland, Uganda and Zimbabwe.