African governments do not drive the
preparation processes of the G20 summits despite their participation as
observers during those events. Africa remains “on the table” of the G20 instead
of sitting at the table for global agenda-setting and rule-making (Leininger, 2017)[1],
although the AAG is co-chaired by South Africa (with Germany) and the UN
Economic Commission on Africa (with ACET and the OECD) also participates in the
Compact with Africa (CwA). Whether “countries are displaying ownership of the
commitments made, unlike in the case of structural adjustment programmes that
were externally imposed”[2] (Sidiropoulos,
2019)? Doubts are validated by a close look at the CwA policy matrices for each
of the CwA countries.
The guiding principle of CwA policy matrices is:
“Improve framework conditions for private investment (domestic and foreign)”. In
reality, the African CwA partner countries have been subject to a bewildering
array of government actions and specific targets required from them. The table
below refers to the policy matrices of the early implementation phase of the Compact
initiative. They are far from reflecting the comprehensive task load required
from the governments in African countries participating in the Compact
initiative.
Table: Required actions, targets and foreign
institional partners in 1st CwA Policy Matrices
- numbers,
early 2018 -
|
|
Ethiopia
|
Ghana
|
Senegal
|
|
Government actions
|
26
|
22
|
28
|
|
Targets
|
16
|
34
|
28
|
|
Foreign ´partners´*
|
26
|
32
|
23
|
* International and foreign
bilateral development institutions. Multiple entries included.
The table picks three countries: Ethiopia,
Ghana and Senegal. But the problem of bureaucratic overburden and
quasi-colonial interference is general. For all twelve CwA partners combined,
the total number of each required government actions and policy targets as well
as involved foreign partner institutions easily sums up to 300 in early 2018. In
many cases, the number of required actions, targets and partners has been
rising with each update of the country matrix.
The proliferation of policy actions required
from the twelve CwA partners in each of the country policy matrices can be
blamed for the fact that CwA country governments have been confused and thus fail
to own the compact initiative[3].
The CwA iniative is rather owned by multilateral agencies, especially the World
Bank´s IFC. They push their themes and indicators without G20 leaders bothering
about prioritisation nor considering the severely limited government management
capacities of most CwA partners. Multilaterals struggle to obtain mandates. It
is no coincidence that each multilateral organisation tries to push the work
areas and indicators that they ´own´ into the CwA country policy matrices.
Clearly, the intentions and postulates of the 2005 Paris Declaration and Accra
Agenda for Action
have been forgotten and ignored. The old burden imposed by prolific donor
missions and meetings on the administrative elite in Africa has been
resurrected by the Compact. The imposition of government actions and policy
targets may be perceived as benign from a Western perspective; yet they have a
post-colonial taste.
What is listed below is biased toward
quantifiable, monitorable targets in the initial policy matrix for Senegal. The table, far from being comprehensive is annexed here to
provide some flavour. Yet little is discernible in the policy matrix that
would support the need for structural transformation via sectoral, rural-urban
or informal-formal shifts. Finally, it is also noteworthy to point to potential
inconsistencies and policy conflicts.
APPENDIX
Senegal Policy Matrix 28.02.2018
|
|
Government action
|
Targets 2019
|
Indicators 2019
|
|
1. Macro
|
Reduce fiscal
deficit
|
< 3% of GDP in
2019
|
3.0%
|
|
|
Ensure debt
sustainability
Reduce current account
deficit
|
Policy Support
Instrument program with the IMF to support the PSE
|
IMF: “Broadly
satisfacory”
- but (single)
public tender issues,
- two of the
six structural
benchmarks (SBs) set for the PSI 7th review missed: (i) delays in the payment
of taxes via mobile phones; and (ii) limited progress in lower tax
expenditures.
|
|
|
Improved tax
collection
|
Tax ratio >20% by
2020/22
|
20.4%
|
|
|
SEZ law
|
50-year income tax
holiday replaced with a 15 percent tax rate with no exemptions
|
Done. CIT rate of
15%, exemption from the CEL, from import taxes and duties.
|
|
|
Performance of public services
|
- Improve from 10th
to 8th in the Mo Ibrahim Governance rank
- Improve to at
least 50 in all percentile rankings of the WB Governance Indicators
|
- Still 10/54.
Not reached.
Slipping in gov´t effectiveness, inter alia.
|
|
2. Business
|
Investor protection &
disputes resolution
|
- Reduction of trade
dispute resolution timeframe from 680 days to 500 days
- Fully operating
Commercial Court implemented by 2019
- Fully operating
Electronic Register of Guarantees by 2019
|
- n.a.
- Dakar Commercial
Court established.
-n.a.
|
|
|
Project preparation
& use of standard clauses in PPP
|
Double the share of
FDI: from 3% of GDP in 2015 to 6% in 2020
|
Trend FDI/GDP remins
flat. Last observation 2018: 2.6%.
|
|
|
- Simplify land
registration procedures and transfer of ownership
- Simplify and
harmonize taxes and charges levied by local authorities
- Electronic payment
of fees for the administrative acts and taxes
- Strengthen competition
policy and practices in key sectors (telecoms, agribusiness, etc.)
|
- Improve from 142
(2017) to 132 (2019) in the Registering Property indicator in Doing Business
- Improve from 144
(2017) to 134 (2019) in the Enforcing Contracts indicator in Doing Business
- Improve from 174
(2017) to 150 (2019) in the Paying Taxes indicator in Doing Business
- Review of national
competition framework vis a vis UEMOA
- Enhanced
competitive practices in key sectors, opening up markets for private
investment
|
Registering Property:
easier => Rank = 118.
- Flat: Rank = 142.
- Flat: Rank = 171.
- The inability to
meet the PSI ceiling on the share of public procurement using sole source
suggests that procurement could bestrengthened.
|
|
3. Financing
|
Attract
institutional investors
|
Support to the
regional pilot project for market development (in CFAF) for long-term bonds;
adapt regulatory texts by 2019
|
1/7/19: Baobab
Senegal issues bond for a total FCFA 10 billion (€ 15.2 million) subscribed
at 100%, at 7 years, with a coupon of 7.50% per annum.
|
|
|
Create a risk
mitigation fund by issuing bonds
|
Fully functioning
mitigation fund, with a USD *** million initial capital, by end 2018.
|
?
|
|
|
Address structural
issues impeding lending to SMEs
|
Reforms to require data
to be shared with credit bureau (drawing on example in Cote d’Ivoire) and
make collateral easier to recover.
|
?
|
Sources:
https://unctad.org/en/Pages/DIAE/FDI%20Statistics/FDI-Statistics.aspxhttps://www.africanbondmarkets.org/en/country-profiles/west-africa/
https://www.doingbusiness.org/content/dam/doingBusiness/country/s/senegal/SEN.pdf
[1] Jutta Leininger (2017),"On
the table or at the table?" G20 and its cooperation with Africa, in: Global Summitry Vol. 3 (2), pages 193–205.
[2] Elisabeth Sidiropoulos (2019), “South Africa’s Changing Role in Global Development
Structures – Being in Them but Not Always of Them”, DIE/GDI Discussion Paper
No. 4/2019, page 30.
[3] ACET (2019), Independent
Review by The African Center for Economic Transformation, Compact Monitoring
Report, April
