Domestic Resource Mobilisation, Debt and Citizen Participation: Navigating Sustainable Development in Africa

By Mwaniki Maina

The United Nations Declaration on the Right to Development states that development is a process made up of political, social, economic and cultural dimensions.[1] Successful realisation of the process of development includes active, free and meaningful participation by the citizens and that this participation is based on reasonable opportunity to be involved.[2] The terms active, free, meaningful and reasonable address the role of the citizens in development that is participation in all stages of infrastructural, economic, political and socio-cultural development. Thus, the Declaration provides a blueprint suggesting that development ought to be multi-sectoral and it ought to encompass all members of society.

The requirement of active, free, meaningful and reasonable participation are key elements to the realisation of the principles of transparency, accountability and responsibility, which make up the ideology of fiscal legitimacy. The principles of fiscal legitimacy also include justice, fairness, effectiveness and efficiency. Thus, understanding that development is a process, allows the analysis of its justice and fairness, questioning whether this development facilitates transparency, accountability and responsibility and finally, assessing the process’ effectiveness and efficiency.[3]

Sustainable development is premised on the Leave-No-One-Behind principle, which provides that all members of society ought to be involved in development.[4] This includes vulnerable groups such as women, children, the youth, the elderly and disabled persons and persons who have been marginalised and excluded from decision making.[5] The principles of justice and fairness in fiscal legitimacy inform the realisation of sustainable development in that, they call for equitable distribution of development and further, where resources are collected for the purpose of development, this contribution should only occasion minor discomfort to the citizens.[6]

What sustainable development and fiscal legitimacy thus suggest is that the citizens ought to be actively involved in the process of development. The decisions made in regard to development ought to have the approval of the members of society. The process of development involves multiple stages such as the proposal for development, financing of the intended development, to the actual implementation of development. In all these stages, the citizens ought to be afforded active, free and meaningful participation. This is in pursuance of justice and fairness in development distribution and it is based on transparency, accountability and responsibility, with the goal being efficient and effective development.

Critical to development is financing. For most governments, financing comes in the form of taxes, loans and grants as well as government businesses.[7] Following the onset of the COVID 19 pandemic, many developing countries were faced with the real need to increase their domestic resource mobilisation.[8] That is, increasing their revenue collection from their tax bases. Loans and grants were not as freely available during the pandemic as they were earlier, this was seen as a result of donor countries focusing their resources on cushioning their own economies first.[9] Thus, financing development as countries recover from the COVID-19 pandemic which witnessed many African countries go into recessions, contracting their economies by 2%,[10] should take into account the need for domestic resources and debt sustainability.

Citizen involvement is even more necessary in the development process during this period of pandemic recovery for most economies in the developing world. The principles of fiscal legitimacy and the ideology of sustainable development demand that financing of development be done in a manner that occasions the least burden to the citizenry, that all members of society be involved in decision making and that these initiatives be sustainable.

The Organisation for Economic Co-operation and Development (OECD) has been involved in the financing African economies discussion and hosted the Summit on Financing African Economies in May of 2021. The position of the OECD is that, overall growth requires the development of infrastructure and that infrastructural development is only possible, where it is adequately financed. The OECD states that financing infrastructural development requires an improvement in the bankability of these projects, noting that often times, there is a financing gap between the resources available to developing countries and their development needs. The suggestions available include the reliance on public debt, an increase in domestic resource mobilisation which would see increased revenue collection and finally, the involvement of the private sector through public-private partnerships. These are all sentiments that were raised by parties present in a technical meeting by the OECD in partnership with AUDA-NEPAD and ACET.[11]

Public debt, domestic resource mobilisation and public-private partnerships all need to be addressed using the principles of fiscal legitimacy. As countries take up debt, there is a need to address debt sustainability. The principles of justice and fairness suggest that the citizens ought to be subjected to minimal burden and discomfort where the collection of public resources is concerned. With regard to debt sustainability, countries taking on debt to finance their infrastructural development should not impose heavy tax burdens as a means to collect funds to repay these debts. Governments in developing countries are encouraged to set debt ceilings that would limit the amount of borrowing as well as taking up loans on concessional terms as opposed to commercial terms.[12]

The citizens have a right to access information on the government’s debt portfolio and as such, the governments ought to make this information publicly available, in line with the principles of transparency, responsibility and accountability. Citizen involvement ought to be based on a reasonable opportunity to engage and participate. Thus, the channels through which this information is disbursed, as well as the language used, should be citizen-friendly and accessible to the most vulnerable. Nazir and Yiega state that access to information on the government’s borrowing is necessary to combat illicit financial flows.[13]

Effectiveness and efficiency in development are hinged on the citizens’ ability to participate in the development, financing of these projects, actual construction of development projects as well as their maintenance. The citizens are central to the development and as such, should be afforded access to information on their governments’ borrowing and expenditure as well as the resources collected from the public. Using tools such as participatory budgeting, the citizens have a seat at the table. From formulation, approval, implementation to evaluation and audit, the citizens ought to be involved in the financing of development. Public participation fora as well as the reliance on tools such as the media, present opportunities for the citizens to be actively and meaningfully involved.

Development is a multi-sectoral, multi-stakeholder process. It is continuous and thus should involve all the members of the community. Funding development projects should be done in a manner that is sustainable for the present and future generations, as well as following a set of rules that allow scrutiny by the public thus transparent and accountable. Development cannot be single-faceted and infrastructural development should go hand in hand with socio-cultural development as well as economic growth. This would facilitate sustainable and equitable development.

References


[1] United Nations, Declaration on the Right to Development 1986.

[2] Flávia Piovesan, ‘Active, Free and Meaningful Participation in Development’, Realizing the Right to Development (eBook, United Nations 2013).

[3] Attiya Waris, ‘TOWARDS AN AFRICAN AND KENYAN PHILOSOPHY OF FISCAL LEGITIMACY’ (2019) 1 Journal on Financing for Development.

[4] United Nations, ‘Leave No One Behind’ (UNSDG).

[5] United Nations Development Programme, ‘What Does It Mean to Leave No One Behind’ (2018).

[6] Waris (n 3).

[7] Attiya Waris, Financing Africa (Langaa RPCIG 2019).

[8] OECD, ‘The Impact of the Coronavirus (COVID-19) Crisis on Development Finance’ (OECD Policy Responses to Coronavirus (COVID 19), 2020) <https://www.oecd.org/coronavirus/policy-responses/the-impact-of-the-coronavirus-covid-19-crisis-on-development-finance-9de00b3b/> accessed 5 May 2021.

[9] Stephen Brown, ‘The Impact of COVID-19 on Foreign Aid’ (DEVPOLICY BLOG, 2021) <https://devpolicy.org/the-impact-of-covid-19-on-foreign-aid-20210401-2/> accessed 6 May 2021.

[10] Aby Toure and Daniella Von Leggelo Padilla, ‘Amid Recession, Sub-Saharan Africa Poised for Recovery’ (World Bank, 2021) <https://www.worldbank.org/en/news/press-release/2021/03/31/amid-recession-sub-saharan-africa-poised-for-recovery> accessed 30 April 2021.

[11] Technical Meeting held on 15th April by the OECD, AUDA-NEPAD and ACET ahead of the Summit on Financing African Economies

[12] Waris (n 7).

[13] Afshin Nazir and Vallarie Yiega, ‘DEBT, ACCESS TO INFORMATION AND ILLICIT FINANCIAL FLOWS: AN ANALYSIS BASED ON THE MOZAMBIQUE HIDDEN LOANS CASE’ (2020) 1 Financing for Development 237.