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Covid-19 Emergency Financing: What can the Fund do to help put CSOs in a position to effectively assist governments monitor and verify compliance with the governance conditions on Covid-19 emergency financing?

Jul 14, 2020 | CBlog, From Our Founder | 0 comments

A presentation by CSAAE Founder, Rev. Fr. Dr. Godswill Agbagwa, at a half-day seminar organized by the IMF on:

Promoting Effective Use of COVID-19 Finance in Africa: An IMF Discussion with African CSOs

Ladies and Gentlemen:

To help countries address the economic effects of covid-19, the IMF has provided emergency financial assistance to quite a number of its member countries.

To promote transparency and accountability and ensure that funds are used for their intended purpose, the IMF has asked member countries requesting emergency assistance to commit to:

  • Making public their intent to use emergency assistance for the very urgent purpose of resolving the current crisis and notdiverted for other purposes 
  • Enhanced reporting of crisis-related spending
  • Undertaking and publishing independent ex-post audits of crisis-related spending
  • Ensuring procurement transparency by, for example, publishing procurement contracts
  • Preventing conflicts of interest and corruption by publishing the beneficial ownership information of firms awarded procurement contracts
  • Ensuring that emergency resources are subject to the IMF “Safeguards Assessment” policy

(See https://www.imf.org/en/About/Factsheets/Sheets/2020/04/30/how-imf-covid19-financial-help-is-used)

This is a welcome development and would have been sufficient if governments will not only keep to these promises but do so honestly as it appears that the IMF will just have to take them by their words. Sadly, governments are not always honest and some of those that have already made these commitments to the IMF are notorious for corruption. To ensure that governments, especially those notorious for corruption, are honestly keeping to these commitments, there is need for close monitoring and verification of government claims.

An effective way to achieve this goal may be for the IMF to train and make resources available to CSOs to monitor these commitments and verify government claims related to the use of the emergency financing. Below are some guidelines on how CSOs can monitor and verify some of the anti-corruption and transparency commitments:

  • What to use the emergency financing for: Some corrupt governments do not involve the citizens in decision making. Deciding where, how and when to invest the emergency financing can make or mar the good idea behind the financing. In corrupt countries like Nigeria where nepotism, ethnicism, bigotry and self-interest are common in government, it may be helpful for the government to share plans on where, how and when to invest the funds with the citizens for input. Projects cannot be focused in certain geographic areas to the detriment of other geographic areas. CSOs can help mobilize and facilitate citizen engagement with the government on where, how and when to invest the emergency financing. But the government must let the CSOs to get involved and the CSOs need resources to facilitate citizens engagement with the government. 
  • Monitoring Procurement Process: Calling for bids and publishing names of selected contractors are the easiest things for governments notorious for corruption to do. Just as some companies decide who gets the job before calling for applications, corrupt governments decide who get the contract before publishing bids. Sometimes, these contracts end up in the hands of relatives, friends and cronies of government agents whether or not they are qualified to do the contracts. Of course, these government agents get a percentage of the contract amount. That is why such contracts are hardly well-done because the contractors may: (a) not be qualified for the contract (b); not have enough resources to do the contract due to the percentage taken by the government agent; (c) not be held accountable for not executing or completing the contract because the government to hold contractor accountable was part of the reason why contract was not completed.

To reduce this form of corruption, select CSOs can sit on the procurement panels as independent observers. As observers, they would have the right to inspect bids, contract applications and follow selection process. As observers, they can run independent background checks on shortlisted contractors and submit reports to the government. They should be able to safely blow the whistle should they notice that the contract may end up in the hands of unqualified contractors. Monitoring the procurement process is very important because whether or not the emergency financing does what it is intended to do depends on the contractors. Because the judicial system is also weak and corrupt in some of these countries, ensuring that the right contractors get the contracts is the surest way to use the resources for their intended purposes as corrupt contractors often bribe their ways through the legal system. The IMF can make resources available to select CSO leaders to enable them follow closely the procurement process 

  • Grass Root Monitoring of Contracts: In Nigeria, for instance, grassroot monitoring of contracts can be very challenging. This is because many CSOs willing to do this do not have the resources to do so. Additionally, accessing government award letters and contractor manifests can also be very challenging. More so, the desire to monitor is dwindling as often there are no consequences arising from the reports. The IMF can open up a channel for the select CSOs to share with them reports of grassroot monitoring. The IMF can in-turn engage governments on this. This does not have to happen at the end of the financing term at which time it may be too late to make a change. Occasional meetings between the IMF and these CSOs to discuss progress of the projects may be helpful in providing the IMF insights on how governments are doing with the financial assistance. This would also provide the Fund with something to compare reports and claims from governments. 
  • Verifying Government Claims: Corrupt governments often believe that their claims will not be verified by the IMF, so they can easily submit false claims. If the IMF supports CSOs to follow the process of procurement and follow contractors to the grassroot, then it will be easy for them to confirm or deny whatever claims governments make about the use of the emergency financing. 

Rev. Fr. Dr. Godswill Agbagwa

Founder, CSAAE



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