Office of the Special Adviser on Africa - public spending

Fighting inefficiencies in public spending: Africa’s next battle?

Rado Ratovonarivo — Mon, 16 Jan 2023 18:00:00 +0000

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Newly installed solar panels at a health clinic in Sierra Leone

UNOPS

Aerial view of newly installed solar panels at a health clinic in Sierra Leone. © �山��Office for Project Services (UNOPS)

By Liwaaddine Fliss

A number of African countries continue to face challenges while working toward the realization of the Sustainable Development Goals (SDGs). A lack of financial resources is contributing to their struggles, compounded by inadequate spending patterns depriving the continent of the resources it needs for its development. Now more than ever, African countries need to urgently rein in wasteful public spending and focus on boosting activities to tackle a tepid COVID-19 recovery and to put the SDGs back on track.

A powerful enemy carrying out a multi-pronged assault on the continent

In addition to illicit financial flows that deprive Africa of more than 3.7 per cent of Gross Domestic Product (GDP) per year and inefficient tax incentives that take away 2.5 per cent of GDP, Africa is registering an average loss of more than 2.5 per cent of its GDP per year to inefficiency in public spending. This inefficiency took hold because of multiple factors.

First is the government procurement system, which has been facing challenges ranging from lack of transparency and accountability to corruption. In the health sector alone, corruption is causing an annual loss of nearly US $9.5 billion in Africa, reducing people’s ability to access basic health services.

Rigidities in wages and entitlements in countries where these financial commitments make up a significant portion of government expenditures, as well as deficiencies in public institution processes, are also playing a role. According to the International Monetary Fund (IMF), the quality of public institutions significantly influences the efficiency of public spending and resource mobilization.

As a result, public spending inefficiency in Africa is high compared to other regions and is present across multiple sectors. In education and infrastructure, data between 2000 and 2017 show that this inefficiency contributed to a loss of more than US $40 billion per year. In health, an annual loss of US $28 billion was registered, which lowered life expectancy in Sub-Saharan Africa by more than ten years.

Combating inefficient spending is as important as generating revenues

Overall, regarding the efficiency of public spending, African countries have a lower average score [From 0 (least efficient) to 1 (most efficient). The methodology of calculating the score is detailed in the publication "In Search of Fiscal Space in Africa: The Role of the Quality of Government Spending"] of 0.585 compared to 0.825 for other developing countries. This suggests that if public spending is more efficient, African countries could achieve the same output with 41 to 48 per cent fewer resources and double their performance.

To turn the tide, African countries have been trying to boost domestic resources, focusing their efforts on revenue collection, including through tax increase measures. This approach has been leveraging initiatives to increase tax rates and widen the tax base, shifting to Value Added Tax (VAT) and strengthening the capacity of tax revenue authorities.

This domestic resource mobilization strategy is, so far, falling short, contributing only to a modest increase in tax revenues of a little over 16.5 per cent of the GDP in 2019. African countries must explore other alternatives, including improving public expenditure management.

Since it goes beyond the process of allocating funds, tackling inefficiencies in public spending requires a well-drawn-out battle plan that looks at the multi-dimensional aspect of the challenge.

Marshalling the impetus to fight and developing the strategies to win

African countries should look at strengthening governance across public institutions. With IMF research suggesting such initiatives could reduce inefficiency in public spending, African countries could mitigate losses, potentially recovering the equivalent of more than 50 per cent of their returns on investments for infrastructure.

Strengthening the governance of public expenditure management while aligning it with other frameworks and systems, such as those for debt management and investment promotion, is also vital. This is particularly important to avoid a vicious debt cycle when borrowed funds invested in infrastructure projects are not properly managed.

Africa should also leverage e-Procurement services to increase transparency and accountability, curb corruption, promote competition, lower costs and reduce transaction time for public procurement activities.

Addressing rigidities in wages and entitlements should be part of the solution as well. These initiatives could identify potential savings to be re-purposed for development activities, such as increasing social protection for vulnerable groups, while reducing budget-hungry spending, like cross-cutting energy subsidies.

Africa is at a crossroads where it needs to be decisive to stop a haemorrhage of resources from depleting its capacity. A sensible approach African countries could take is to adopt strategies that prioritize efficiency by trimming superfluous public expenditures. This will increase the countries’ budget portfolio, boosting their capacity to invest resources toward improving the quality of life of their people.

This next battle is one that Africa should fight. It is a battle Africa can win.

The author is a Programme Management Officer in the policy analysis and coordination team of the Office of the Special Adviser on Africa at the United Nations.

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Tackling spending and inequalities to promote STEM education in Africa

Rado Ratovonarivo — Thu, 22 Dec 2022 20:00:00 +0000

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Prof. Amivi Kafui Tete-Benissan teaches cell biology and biochemistry at the University of Lomé

Stephan Gladieu/World Bank

Professor Amivi Kafui Tete-Benissan (left) teaches cell biology and biochemistry at the University of Lomé, in the capital of Togo. She encourages girls to pursue science as a career path, and as head of the association for Togolese women in science, she has started a mentoring programme for female students to help them thrive in STEM fields. © Stephan Gladieu/World Bank

By Rumbidzai Adebayo

Africa needs to boost education in Science, Technology, Education, and Mathematics (STEM) to develop its human capital and accelerate progress toward the 2030 Agenda for the Sustainable Development Goals and the African Union’s Agenda 2063. African countries have subsequently been taking measures to strengthen access to STEM education, establishing initiatives such as the Continental Education Strategy for Africa 2016-2025 (CESA 16-25) and the Science, Technology, and Innovation Strategies for Africa (STISA-2024).

African countries also decided to invest at least 1 per cent of GDP towards the development of Science, Technology, and Innovation (STI) while creating the political impetus for the implementation of policies on STEM education at the highest level of decision-making. This resulted in the creation of a committee of ten heads of state and government to champion education, science and technology on the continent. African countries subsequently developed policies and mechanisms to mainstream STEM education in the national development framework.

However, challenges remain, undermining these African initiatives to promote STEM education.

Public spending inefficiencies

The inefficiency of public spending for education is a key challenge, as highlighted in the 2022 Report of the �山��Secretary-General on the New Partnership for Africa’s Development (NEPAD). This inefficiency costs Africa US $12 billion. This is a particularly considerable number, considering it is not always clear how much of the resources African governments are investing in education get allocated to STEM education.

There is also the issue of governance and accountability mechanisms – such as policy development, support structures for budgeting, monitoring and evaluation, etc. – which often are not adequate to allow for the reliable implementation of STEM education initiatives. Therefore, investments, including those required to establish STEM-friendly schools, increase the number of STEM-trained teachers, and close the STEM gender gap, do not consistently deliver the expected results.

Inequalities in education

Another challenge is the inequalities between urban and rural areas, which limit the promotion of STEM education. Schools in wealthier urban areas attract the lion’s share of investment at the expense of schools in underprivileged, rural areas. The result is a disparity in access to infrastructure and qualified teachers, a “teacher gap” that is creating a vicious cycle that further accentuates the urban-rural divide.

To tackle the issue, several African countries have been boosting access to universal primary education, particularly in underprivileged communities, leveraging social protection programmes, such as school feeding initiatives organized with the UN’s World Food Programme (WFP) and other partners to increase student enrollment. While the number of underprivileged children who have access to STEM education has subsequently increased, the result has not been enough. Urban-rural inequalities continue to persist and are compounded by other factors such as gender equality, disability, etc.

The way forward

What can African governments and their partners do to address these challenges?

Investment in education should go hand in hand with capacity-building initiatives to boost governance and accountability. Governments could leverage resources such as the International Monetary Fund’s (IMF) Guidelines for Public Expenditure Management to develop their capacity for budget preparation, budget execution, and cash planning or the World Bank’s Public Expenditure Management Handbook to acquire more knowledge about public expenditure management and its impact on budgetary outcomes.

Collaboration with development partners supporting investment in STEM infrastructure should be strengthened. This could contribute to bridging the urban-rural divide by making resources critical for the delivery of quality STEM education more accessible, such as classrooms, laboratories, pedagogical supplies, Internet connectivity, etc. This collaboration could also be essential for the maintenance of social protection programmes, such as school feeding initiatives, where needed.

The “teacher gap” should be reduced by prioritizing training for current and future teachers, especially in STEM education. Specialized institutions providing these training services should be supported, such as the Centre for Mathematics, Science and Technology Education in Africa (CEMASTEA), the African Institute for Mathematical Sciences (AIMS), and the International Institute for Capacity Building in Africa (IICBA) of the �山��Educational, Scientific and Cultural Organization (UNESCO).

A significant, sustained investment in infrastructure should be made to provide students and teachers in Africa with a modern learning environment where they can thrive and engage with a global, interconnected world. Digital technology should be made accessible to all. The playing field between urban and rural areas should be levelled by expanding power and water grids, as well as road networks and Internet infrastructure to underprivileged, rural areas.

Tackling these inefficiencies and inequalities is therefore crucial to the establishment of a robust STEM culture and a dynamic STEM ecosystem in Africa. This would create an environment where the promotion and growth of STEM education become an integral part of the African narrative as the continent mobilizes to accelerate progress toward the Sustainable Development Goals and the realization of the promises of Agenda 2063.

The author is a Programme Management Officer in the policy analysis and coordination team of the Office of the Special Adviser on Africa at the United Nations. She acknowledges the contribution of Dr. Beatrice Khamati Njenga, Deputy Vice Chancellor, Institutional Advancement, International Leadership University Kenya and former Head of the Education Division in the African Union Commission), who provided technical guidance during the preparation of this product. Dr. Njenga is a member of the Africa Knowledge Network.

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