Lessons in good governance practice are clearly relevant for all, and not just a ‘preserve’ of the emerging democracies, as has been claimed. As a crusader against corruption and poor governance, the World Bank will have to spend some time repairing its reputation and taking stock of its leadership role in this regard.

by Peter Kimemia, Bonginkosi Masiwa and Pemy Gasela

THE international community has been treated over the past few months to a rather bizarre circus over corruption allegations at the heart of the World Bank, involving none other than Bank President Paul Wolfowitz.

Following his appointment to lead the bank in 2005, Wolfowitz seconded his partner, Shaha Reza, to work in the State Department, ostensibly to avoid any conflict of interests. However, it appears that in doing so, he neglected to apply the set principles of good governance which the bank espouses and demands, especially from poor, third world countries.

Wolfowitz allegedly ensured that Reza’s salary rose quickly to about $193 000, more than the $186 000 annual earnings of US Secretary of State, Condoleezza Rice. However, being caught up in such a blatant act of nepotism and cronyism was only one part of the problem. The bigger problem was that, following the revelations of the outrageous manoeuvre, Wolfowitz resisted calls for his resignation and even managed to marshall support from the US government. And while he did finally resign, he did so only after the stakes were upped on an international level, when Germany declared him unwanted on its shores.

A new World Bank President has now been proposed, with his appointment due to be confirmed later this month. However, what the Wolfowitz episode has done is to turn a mirror on the war against corruption. Wolfowitz’s attempts to hang on to his job, and the US government’s damaging backing of him under the circumstances, helped to shine a new light onto the hypocrisy that accompanies the West’s crusade against corruption in Africa.

At a local level, governance-related challenges continue to bedevil our municipalities, of which corruption remains the most serious. Recent surveys conducted by Afesis-corplan have revealed worrying levels of perceptions of corruption, especially in the form of nepotism. For instance, while Nkangala District Municipality scored fairly highly on most of the other indicators of good governance, perceptions of corruption remain high.

At Buffalo City Municipality, the council has recently had to swing into action to investigate corruption claims involving bribes for jobs. Refreshingly, more and more municipalities are showing willingness to subject themselves to elaborate monitoring of their governance practice. To this end, Afesis-corplan, in partnership with other NGOs and the GTZ, are preparing to roll out further pilot good governance surveys in Cacadu District Municipality in the Eastern Cape, and Ehlanzeni District Municipality in Mpumalanga.  There are also indications that DPLG is taking a lot of interest in these studies, with a real possibility of there being a national rollout after the upcoming pilot surveys.

The road towards good local governance within South African municipalities has proved to be rocky and difficult. There is a growing gap between the rhetoric of policy intentions and citizens’ day-to-day experiences of municipal governance. While government and agencies like the national Treasury have made an effort to legislate and suggest a route to ensure accountability and transparency in the governance of municipal finances, there is a growing perception within civil society that financial reporting and accounting conventions are either ignored or manipulated to withhold key information from public scrutiny. Municipalities in the Eastern Cape, for example, have received damning adverse opinions from the Auditor-General for dismal financial management. Consequently, some of these municipalities have become a breeding ground for financial fraud.

Citizens need to regain a sense of real control over the manner in which municipal finances are expended and reported. For this reason, Closing the Gap, a joint project between PCRD and Afesis-corplan, emerged as a means to provide community groupings with the skills and knowledge to monitor financial management and reporting practices in their municipality. A project of this nature will therefore, with endorsement from local communities, re-establish the principles of good corporate governance, partnership and a local contract of governance between civil society and local government.

Civil society in the Eastern Cape, represented by Afesis-corplan and its partner organisations, together with Buffalo City Municipality, are currently carrying out capacity building workshops for community leaders in the area. These induction workshops, which are well attended by ward committee members, are aimed at empowering communities in order for them to be able to ask the relevant questions when it comes to demanding municipal accountability. Ward committees, being rooted in civil society and being the crucial link between the municipality and the communities, are the best structures in which to sow the seeds of municipal accountability.

These workshops are also aimed at helping ward committee members better understand their various roles and responsibilities, one of which is ensuring the public’s participation in issues that govern them. It is generally understood that capacitating ward committees is the first important step towards improving the structure’s ability to impact positively on issues of accountability and service delivery.

The Local Government Transformer Vol. 13 No. 3 Jun/Jul 2007

ABOUT... THE WORLD BANK
The International Bank for Reconstruction and Development, commonly known as the World Bank, is a United Nations affiliate body set up to finance projects that further the economic development of its member nations. Its foundations were laid at the UN monetary and financial conference at Bretton Woods in 1944, with the initial aim of facilitating the reconstruction of Europe after World War 2. By the 1950s its operational emphasis had shifted away from Europe towards developing countries in Africa, Asia, the Middle East and Latin America.

In 2000, the World Bank issued loans totalling close to $16bn to its client countries. It invests in projects which it thinks will further “stable, sustainable and equitable growth”. Specifically, its lending criteria favours countries that are “open to international trade, are diversified, attract foreign direct investment and adhere to free market economic policies”. Consequently, the bulk of the World Bank’s money goes towards projects which are seen to strengthen banks and capital markets, or which aim to create “more efficient, less corrupt public institutions”.

The bank has been criticised for attaching too many strings to its loans. For example, in return for debt relief to Benin, the poverty-stricken African country was forced to liberalise its cotton sector, while Zambia was forced to privatise its copper mines in return for relief, which led to 60 000 job losses in the sector.


ABOUT... THE WARD COMMITTEE SYSTEM
The ward committee system was introduced by DPLG in 2000 to provide the structures through which communities could participate in the decision-making process on local issues that govern them. Ward committees are intended to be a platform for citizens to actively take part in and determine important development-oriented municipal processes, such as Integrated Development Planning (IDP), municipal budgeting and performance management systems. 


ABOUT... CLOSING THE GAP
Closing the Gap is a joint project between the Project for Conflict Resolution and Development (PCRD) based in Port Elizabeth and Afesis-corplan in East London. It will help citizens and community groups to better understand how public money is managed and spent at municipal level. The technical name for the project, which is supported through donor funding, is “Building community-based capacity for monitoring local government financial accountability”.

This project aims to give specially convened community groups the skills and knowledge to monitor financial management and reporting practices in their municipality. It demonstrates how existing laws can be used to improve municipal financial accountability to the public, and the actions ordinary citizens might take when municipalities fail to meet their legal obligations in this regard.

Ndlambe and Kouga have been chosen as case studies for the purpose of the Closing the Gap project. Ndlambe, a case in point, has experienced a number of disturbing trends related to alleged cases of impropriety. For example, rates are not effectively levied or collected, despite the fact that Ndlambe’s real estate has appreciated greatly in value.