Nigeria: do donors know what they’re spending? (update x2)

by | Mar 19, 2010 | Africa, Economics and development

You see plenty of reports from development agencies castigating development countries for one reason or another, but the boot is much less often on the other foot.

Interesting then to see this 2008 review (huge pdf download) from Nigeria’s National Planning Commission, which sets out to analyse ‘the volume and quality of Official Development Assistance to Nigeria between 1999 and 2007.’

During this time, $6bn of aid has been spent in Nigeria, almost all of it spent by donors themselves, rather than being rooted through the government’s budget. The Planning Commission’s first job, therefore, was to try and work out who had spent what.

So it sent a template to donors asking for information on what they’d spent and where:

Of all the agencies, USAID was the only agency able to provide almost all the requested information with a little delay. EU was also able to meet most of our requirement, only after about three months delay…

CIDA’s [Canada] claimed disbursement did not tally with what they had actually spent…[It] refused to supply more information when asked [to]…

DFID is another donor that could not account for all its activities. When asked to provide information on the sectors and states DFID is operating in, it simply wrote saying ‘we do not require our programme managers to collect expenditure on a state-by-state basis.’…

JICA [Japan]…did not cooperate at all despite our many efforts to get JICA to collaborate with us.

The UN system was also only ‘partially cooperative’. UNICEF did not provide a breakdown of its health spending, for example (nor did DFID or CIDA). “We do not know exactly what [this] money was spent on,” the report notes. The Chinese government was also asked for data – but the review does not tell us what its response was (read into that what you will).

Donors should be much more transparent accountable for their activities, the Planning Commission concludes, while the Nigerian government “needs to offer clearer and more effective leadership to her development partners both in terms of how and where to operate.”

It lauds the example of Kano and Ondo states. They are robust in their response to ‘intruder donors’ who operate outside a framework established by the state government. That allows leaders to set, and be accountable for, their own development priorities.

Update: Of course, Nigeria’s own statistics are often woefully inadequate, whether at national or at state level. Recently, for example, Kano state has just been counting its schools:

An additional 88 senior secondary schools and 174 private  schools had been ‘discovered’, while in some areas schools had disappeared: the Kano municipality had 10 less junior secondary schools than first thought.

Update II: Worth pointing out, too, that the World Bank, DFID, USAID and African Development Bank recently agreed a joint strategy for Nigeria – bringing 80% of Nigeria’s development assistance under a single strategic umbrella. Somewhat oddly though, it cannot easily be found on any of the donors’ websites. There’s a copy here though.

I wonder if the donors will now move towards a single online platform to show what they’re spending, where, and what results it’s achieving… and, also, how effectively their joint approach is proving (the Bank and DFID have had a joint strategy for some years now) at reducing overhead for Nigerian government and non-government partners.

Moody’s – it’s time to stop hiding

by | Mar 18, 2010 | Economics and development, Global system

Michael Lewis, in his highly entertaining new book, The Big Short, has a pop at ratings agencies (amongst a bazillion other targets). All the big Wall Street firms, he writes, were highly effective at manipulating Moody’s and Standard and Poor’s:

Everyone on Wall Street knew that the people who ran the models were ripe for exploitation. ‘Guys who can’t get a job on Wall Street get a job at Moody’s,’ as one Goldman Sachs trader-turned-hedge fund manager put it.

Inside the rating agency there was another hierarchy, even less flattering to the subprime mortgage bond raters. ‘At the rating agencies the corporate credit people at the least bad,’ says a quant who engineered mortgage bonds for Morgan Stanley. “Next are the prime mortgage people. Then you have the asset-backed people [dealing with sub-prime mortgages, for the most part], who are basically like brain dead.

Wall Street bond trading desks, staffed by people making seven figures a year, set out to coax from the brain-dead guys making high five figures the highest possible rating for the worst possible loans. They performed the task with Ivy League thoroughness and efficiency.

Despite their pivotal and disastrous role in the financial crisis, business for the ratings agencies is booming. If anything, their influence, meanwhile, has grown, especially over governments, as they threaten countries with a sovereign debt downgrade.

I was especially intrigued by media coverage for a recent report from Moody’s, which claimed that the US, UK, Germany, France and Spain are all at risk of social unrest as governments struggle to get their finances under control. According to Moody’s Chief International Economic and Financial Policy Analyst, Pierre Cailleteau:

Growth alone will not resolve an increasingly complicated debt equation. Preserving debt affordability at levels consistent with AAA ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.

We are not talking about revolution, but the severity of the crisis will force governments to make painful choices that expose weaknesses in society.

Strong stuff. And interesting too. One of the key questions for the next few years is whether the fallout from the financial crisis will be toxic enough to damage, or even break, some societies.

So I thought I’d read Mr Cailleteau’s report, rather than just relying on the Telegraph’s summary. I wondered how strong his analysis was. Was he a smart guy or one of those dubbed in Lewis’s book as the ‘brain dead’?

But then I hit the buffers. Go to Moody’s website and there’s no content at all available unless you register (which includes pretending to read a 6103 word user agreement – the site knows if you haven’t at least scrolled through it).

Once I’d gone through all this rigmarole and logged in, I was told that access to Cailleteau’s report “is not part of your current service”. (I was allowed to read the report’s press release. Big deal. I struggle to think of another organisation that requires registration for that.) Nor could I find a biography for Cailleteau. Only one of his reports was freely available to subscribers (a research note on methodologies). And even the link to pricing information for his ‘social unrest’ report was not working.

So I am left none the wiser about Cailleteau’s argument or credentials. All I do know is that he dismissed talk of a systemic global banking crisis in August 2007, a year before [corrected] Lehman’s nearly brought down the world’s economy.

Of course, anyone can make a mistake (though that one’s a doozy) – but surely it is no longer acceptable for the ratings agencies to hype their work to the press and lord it over the world’s economies, without letting us see the evidence on which they base their diagnosis and prescriptions.

More transparency please. Either on a voluntary basis. Or enforced through regulation.

The UN, EU and civilian peace ops

by | Mar 18, 2010 | Conflict and security, Cooperation and coherence, Europe and Central Asia, Global Dashboard

Yesterday, Ban Ki-moon announced the formation of a Senior Advisory Group for the Review of International Civilian Capacities (which will hopefully not be known as SAGRICC).  “Another UN panel,” I hear you cry, “whoopy-ruddy-doo!”  But this is a serious panel dealing with a serious problem: the shortage of decent police, justice experts and other civilian specalists to deploy to post-conflict countries.  Many UN missions have only 60-70% of their planned civilian staff, leaving them overstretched and unable to deal with day-to-day political issues, human rights and so on.

The new advisory group (involving former UN peacekeeping chief Jean-Marie Guéhenno and my boss, Bruce Jones) will oversee a review “to improve the international response in the aftermath of conflict by strengthening the availability, deployment and appropriateness of civilian capacities for peacebuilding.” My colleague Rahul Chandran is leading the team conducting this review.  I think they’re the right team for the job.

I also think that this would be a good moment for the EU to learn a lesson from the UN.  As Daniel and I pointed out in a tough paper for ECFR last year (with a foreword by Jean-Marie Guéhenno…) the EU’s own civilian peacekeeping efforts have big problems.  EU missions suffer from staff short-falls almost as bad as the UN’s.  In part, that’s because demand (for UN and EU ops alike) outstrips supply – which also creates technical headaches, as we pointed out in Internationale Politik:

Since the European Council sent a police mission to Bosnia in 2003, the European Union has deployed fifteen civilian operations worldwide—compared to just six military operations. These have ranged from small police reform missions in Congo to a 3,000-strong mission in Kosovo, launched in 2008, that handles not only policing issues but judicial reform, war crimes investigations, and customs.

The Union’s ability to deploy so many missions—even sending personnel as far away as Aceh, Indonesia—was one of the great successes of Javier Solana, the European Union’s foreign policy chief from 1999 to 2009. Working with a relatively small group of officials, Solana used personal diplomacy and sheer persistence to get each mission on the ground.

The EU’s bureaucratic systems have often struggled to keep up. Financing has been a particular headache: when the first personnel arrived in Aceh, they had to use their personal credit cards to fund the mission start-up. European officials also admit that they have been lucky. Although EU civilian personnel have come under attack in the Balkans and Afghanistan, they have yet to suffer any fatalities. Had a European mission suffered significant casualties—as the United Nations suffered in Iraq in 2003 and in Haiti —EU governments might have recoiled from approving missions at such a high rate.

So I’d argue that the EU should match the UN’s review with a formal self-analysis of its civilian operations (in fairness, the Swedish EU presidency made some progress in this direction by asking member-states to review their national civilian capacities).

Actually, I’d go further. Ten years ago, the UN published the highly influential Brahimi Report – an in-depth study of all aspects of peacekeeping. Succeeding reform initiatives, including this new review, all build on this extremely strong basis. The EU doesn’t have any equivalent ur-text for its operations. The Union should put together a team of wise persons to start drafting one, the sooner the better.