Budget Trailblazers: John Oluwafemi Olla

Budget Trailblazers: John Oluwafemi Olla

 
Each month, we shine a spotlight on partners who are using budget advocacy to bring transformational change to their communities. This month, we talked with John Oluwafemi Olla, communications officer at the Justice Development and Peace Commission in Nigeria, who recently participated in a learning session with IBP staff and partners to reflect on program learnings from 2021.

 John Oluwafemi Olla, communications officer at the Justice Development and Peace Commission in Nigeria.

Q: What is the Justice Development and Peace Commission and what are your areas of focus?

A: The JDPC is the social branch of the Catholic Church. The Commission is responsible for promoting social justice, which includes addressing issues concerning human rights, democracy, good governance, agricultural assistance, food security, poverty reduction, sustainable development, humanitarian service, and disaster management.

 

Q: What are the main problems you and JDPC are working to address in your communities?

A: Many of the challenges that we encounter stem from issues of exclusion from governance and development, such as poor service delivery in the areas of education, health, water and sanitation, and infrastructure development.

 

Q: How has IBP supported your work? How has the collaboration improved your work and the ways you engage your target audiences?

A: IBP has been incredibly supportive in many areas including data gathering, research, and documentation. This has helped us with citizen engagement concerning primary health care services, effective budget tracking, and advocacy.

 

Q: How are you able to leverage social media to get the government to focus attention on primary health care needs?

A: Social media is a critical device in our toolbox because it allows us to develop effective communication across many sectors of society in a simplified form while corresponding with citizens and government organizations. For example, we are able to connect citizens to the government and share government responses to questions asked. We have also managed to secure the government’s commitment by engaging online through our social media pages. For example, when we share photos of public health facilities on Twitter and Facebook, it gives us an opportunity to engage with duty bearers on the ongoing upgrades of facilities. We evidence-based information and data to back up our posts. We also use Zoom to interact and share feedback with officials.

 

Q: How do you mobilize different community development groups to form a united force to advocate the government on your needs?

A: We have found that mapping stakeholders along with sensitization and political education workshops are an effective tool for mobilizing communities to join together and press the government on their core needs.

 

Q: What specific impact have you achieved in the last two years?

A: Citizens are now included and their voices are heard in new ways during budget deliberations. For example, 15 policies and laws at the legislative arm of government received input from grassroots organizations. We’ve seen the gap reduced in communication between duty bearers and citizens through various town hall meetings at the state and local level. This increase in citizen participation is encouraging.

Large-scale debt swaps can help fight debt, climate change and nature loss together

Large-scale debt swaps can help fight debt, climate change and nature loss together

In the maelstrom of COVID-19, unsustainable debt, climate change and catastrophic biodiversity loss threaten a sustained and sustainable recovery from the impacts of the pandemic. The International Institute for Environment and Development (IIED) has released a new report on a new form of debt swaps that could provide developing countries with an opportunity for a green post-COVID-19 recovery that would also help reduce poverty.

A global pandemic in the midst of a triple crisis

Developing country debt reached over US$8 trillion in 2019. On average developing countries spent over 10 percent of their government revenues on debt repayments in 2018, and for several least developed and middle-income countries the amount rose to 20 percent. Money that is crucial for addressing the climate and biodiversity emergencies that are bearing down on already struggling countries, as well as for providing for improved education, infrastructure, and health.

In “Tackling the triple crisis: using debt swaps to address debt, climate and nature loss post-COVID-19” IIED shows that using large-scale debt swaps as part of post-COVID recovery measures would help address the pressures from crippling debt and the climate and biodiversity crises. COVID-19’s economic fallout means less of the finance needed to address poverty and the impact of climate change and biodiversity loss will be available, pushing millions more women, children, and men into poverty.

Poor Countries and Climate FinanceBy exchanging an existing debt contract for one that writes off debt or reduces the debt’s original value by, for example, having repayments made in the debtor country’s currency or charging lower interest rates, a developing country’s overall external debt could be reduced.

The money saved would be used to invest in poverty-reducing climate resilience programs, climate emissions mitigation, or biodiversity protection initiatives.

To date, debt swaps have been limited to a few small-scale projects in which the money has been managed in trust funds by international NGOs. IIED’s “Tackling the triple crisis” shows that by creditors channeling the money direct to developing country governments’ budgets specifically for financing such action as reforestation or researching or planting climate resilient crops, debt swaps can be used on a large scale.

It also means more money will be available for these issues than under earlier project-based versions and be more cost effective. By having the money channeled through governments’ financial systems, it increases their accountability to their citizens and commitment to the environmental programs.

Large-scale debt swaps for climate and nature will also benefit public and private lenders as debt will be invested productively to increase sustainable economic growth and so reduce the need for further debt write-offs. They will also help creditors to meet their pledges to improve environmental and social standards.

Such debt for climate and nature swaps will also help achieve the key objectives of increased biodiversity and climate finance set by next year’s UN biodiversity conference being held in China and the UN climate summit in the United Kingdom.

The report calls on the international community to work with debtors to establish a technical working group, under guidance of an international body such as the World Bank. The working group’s purpose would be to develop a comprehensive and coordinated climate and nature program swaps initiative over the next three years to address the crisis of debt, climate change and biodiversity loss.

See ‘Tackling the triple crisis: using debt swaps to address debt, climate and nature loss post- COVID-19‘ by Paul Steele, IIED chief economist, and Sejal Patel, IIED climate change researcher. The report includes a comprehensive list of the developing countries that will benefit most from this type of debt relief.

The International Institute for Environment and Development held a webinar on this topic on Sept. 9. A recording of the webinar is available here.

Confronting a hidden burden during COVID-19:  lack of debt transparency in government budgets

Confronting a hidden burden during COVID-19: lack of debt transparency in government budgets

Rapid progress toward greater debt transparency in government budgets is sorely needed.

Before the COVID-19 crisis, developing countries were borrowing at historic levels, with shifts toward riskier debt. A lack of transparency and fragmented systems for managing and reporting on government debt has left many lower-income countries over-indebted and ill-prepared to finance necessary pandemic containment and mitigation measures.

We see this challenge in Zambia, which increased non-concessional debt to finance infrastructure projects and expand civil servant pay. Yet, not all loans were reported and publicly disclosed, even as half of Zambia’s tax revenues went to finance debt service payments. As the pandemic hit, the price of copper – Zambia’s main export – collapsed, along with the country’s currency, putting even more strain on debt repayment and potentially limiting access to additional financing to bolster spending during the emergency and response period.

Other developing countries hope to avoid a similar fate as Zambia. As part of the global response, many least-developed countries are being granted temporary debt relief to help focus public spending on addressing the pandemic rather than on debt-service payments. Yet, for debt relief to be effective, governments must be held to account for how they use these funds – not just by their creditors, but also by their citizens.

The challenge for accountability – both before and after this crisis – is that most citizens have minimal access to critical information about government budget decisions, including those on government debt. The most recent assessment of fiscal transparency practices in 117 countries by the Open Budget Survey (OBS), finds that only 31 met the OBS benchmark for budget transparency and score 61 or higher out of a total possible score of 100.

Importantly, the OBS also finds critical disclosure weaknesses in countries with a higher risk of debt distress. Comparing the latest OBS transparency scores with the IMF and World Bank’s debt sustainability analysis (DSA) ratings from the end of 2019, which are available for lower income countries eligible for highly concessional financing, the 13 OBS-assessed countries that are rated as high risk, or in debt distress have an average budget transparency score of 28 (out of 100). In comparison, the 11 countries that are rated as low risk have an average score of 40.

As part of its overall measure of budget transparency, the OBS asks specific questions about the disclosure of debt information in budget documents released throughout each fiscal year. These questions assess government practices against international standards and are scored on a scale of 0 to 100 based on how well a country adheres to good practice. Several questions also ask about the reporting on fiscal risks that is central to understanding whether other government liabilities can lead to higher debt levels or are counter-balanced by government assets.

A clear pattern emerges: the higher the risk of debt distress for a country, the lower the scoring on debt transparency and fiscal risks. Fiscal risk reporting is a general weakness for developing countries, and not even one country at high risk of debt distress, or in debt distress, presents information on quasi-fiscal activities or the long-term sustainability of their finances.

The lack of transparency in these countries is telling. Far too few governments have been informing their citizens and opening public debate on whether new debt is wise or wasteful. Far too many governments have now entered this pandemic and global economic slowdown with debt burdens that hinder their response.

International efforts pushing for greater debt transparency are gaining momentum. Prior to this crisis, the World Bank and IMF agreed to support countries in improving how they record, monitor and report on their debt for the databases managed by these institutions. During the crisis response, countries participating in the G-20 Debt Service Suspension Initiative (DSSI), have now committed to disclosing all public sector financial commitments, including debt, by September 1, 2020, and to use the resources gained through debt relief toward social, health, and economic spending. These international reporting systems, however, only disclose debt that has already been incurred and bypass the primary accountability system for a country’s public finance decisions: the government’s budget.

Faster progress toward greater debt transparency in government budgets is needed. Going forward, international and national actors should unite around a common agenda to ensure full transparency on public debt:

  • In every country, oversight actors including civil society, legislatures, and supreme audit institutions, should call on their governments to improve disclosure practices and public engagement on debt decisions during budget discussions.
  • International organizations providing emergency lending, debt relief, and technical assistance for debt management, should support governments in strengthening debt reporting in national budgets.
  • External creditors should commit to disclosing all loans in a public registry of loan and debt data, as proposed by the Jubilee Debt Campaign.
Using data for social good: transparency of public finances is vital

Using data for social good: transparency of public finances is vital

This post also appears on Publish What You Fund’s website.

When it comes to government finances, we, taxpayers and donors alike, want to know what’s happening with our money. How much is there, where is it going, where is it coming from and is it serving its intended purpose for the wider public good? As governments rush to respond to the pandemic, the need for transparency, inclusion and oversight of budget decisions and the money flows are critical.

Yet, according to the latest Open Budget Survey (OBS), 86 out of 117 countries assessed (roughly 74%) fail to publish sufficient information on how public resources are generated, allocated, spent and, ultimately, what results are achieved.

What about information on donor assistance, in particular? Data on sources of both financial and in-kind aid is also difficult to find in government budget reports. Twenty-six surveyed countries (~25% of those receiving any aid) provide no information on aid in their Executive’s Budget Proposal – the blueprint for how the government will raise and spend funds to meet its economic and social policy goals – or in any other supporting documentation. The paucity of information provided may be exacerbated by the difficulties in predicting donor flows and the complex reporting requirements placed on recipients of aid.

Further, OBS findings on health and education budgets show that countries are lagging when it comes to publishing detailed information needed to assess service delivery, including data on actual spending, and information linking sector policies, budgets and performance. Data on the extent and use of donor financing for sectors is scarce, too. Only four of the 24 countries receiving aid and reviewed closely for this information in the survey provided information on how much funding each donor contributes to their country and how much goes to specific sector budgets.

The lack of transparency of governments’ revenues, spending and results limits opportunities for public engagement and effective oversight by the legislature and national audit offices. The OBS global average score for public participation in the budget process is just 14 out of 100. Where mechanisms, such as public hearings, do exist, they are rarely open to vulnerable and underrepresented communities, those who may be most in need of public services.

Civil society puts the data it can find to good use

In countries where aid is flowing in, civic organizations and communities are calling for information and opportunities to ensure public policies and programs serve those most in need.

In one example, civil society organization Integrity Watch Afghanistan engages communities in the monitoring of the quality of health services in more than 50 hospitals and 1000 health centers. They capture data on a real-time basis, including on the level of available resources and compliance with guidelines, through a newly developed COVID App. The data generated can be used to prioritize funds based on the needs identified through these surveys. As the government plans to amend the budget in response to COVID-19, this more timely, detailed information on the budget and contracts can help build trust and direct spending towards communities in need.

Across Cameroon, The Gambia, Kenya, Liberia, Malawi, Nigeria and Zimbabwe, Follow The Money is tracking government spending and international aid in rural grassroots communities. The group monitors announcements of grants and donations for communities with limited means, and contacts the government, agency, or individual responsible for the grant to provide a breakdown of how they plan to spend the money leveraging the access to information law (FOIA). They also visit communities to check if they have received any funding or medicines based on the information received from the donors. Results are published and discussed on social media using #FollowCOVID19Money and radio stations and addressed with responsible authorities.

These activists join the myriad of organizations around the world who are advocating for transparency in response funds, more inclusive government responses, expanded and properly targeted support and more progressive systems. As detailed financial data are often lacking in the public domain, they use various channels, including community feedback and official media reports, to track responses and inform policies and programs. This important work of ensuring the effective use of public funds and building trust can be greatly enhanced by providing timely, comprehensive information and opportunities for meaningful public engagement.

How can we move forward?

While there have been gains in transparency over the last fifteen years, we still have a long way to go. Current levels of accessible information are too low and the pace of improvement too slow to help us ensure we’re on target to attain the Sustainable Development Goals and to live up to the Paris Climate Accord, let alone the pandemic response and recovery.

This is why a broad collective of actors, across social movements, think tanks and international organizations (including Publish What You Fund), are calling on governments to:

  1. Publish information on how public resources are generated, allocated and spent – in a timely manner that is accessible to all. This means relevant and useful information that people need, such as information on service delivery and debt burdens.
  2. Create opportunities for all people, particularly those from marginalized communities, to provide input into the budget process. We want meaningful and inclusive public participation, at least one practice in each of the executive, legislature, and supreme audit institution.
  3. Strengthen monitoring and oversight of budget execution through independent institutions. With careful documentation of expenditures, we need strong external audit functions and government follow-up.
  4. Sustain improvements achieved on open budgeting, protecting them from political shifts. Gains can be sustained through institutionalizations in law and regulations and strengthened coordination and capacities.

These targets are ambitious, but achievable over the next five years. Most countries have the technical skills, the data to share – and the champions to inspire change. Tools, such as the OBS and Aid Transparency Index, promote these goals and measure progress.

This agenda is one that can unite actors across sectors and countries. While speed is of the essence in these challenging times, so is an informed, inclusive approach to ensure funds deliver as needed in the coronavirus era and beyond.

The Vaccine against COVID-risk: Open Budgets, Open Response, Open Recovery

The Vaccine against COVID-risk: Open Budgets, Open Response, Open Recovery

This post also appears on the Open Government Partnership website.

There’s a damaging rumor doing the rounds in Kibera, Nairobi’s massive informal settlement: that COVID-19 is a fabrication invented by the country’s elite to raise money from the World Bank and the World Health Organization (WHO) to pay off the elite’s debts. It is dangerously wrong, but its origins understandable when you consider – based on their experience, these citizens have little confidence that money for their government will flow into health or humanitarian services where they live.

The good news is that there’s a vaccine to protect against the risk of such rumors, and the financial mismanagement they arise from: openness, which enables journalists, civil society, and citizens to “follow the money.” Openness promotes government financial accountability, improves service delivery and rebuilds civic trust.

To that end, the Open Budget Survey (OBS), launched just over a week ago, provides both a warning and a call to action. It highlights how only 31 of the 117 surveyed countries have sufficient levels of budget transparency according to the basic minimum standards set in accordance with international norms. This means that three-quarters of surveyed countries do not. Governments often fail to publish key budget documents, which should clearly explain budget policies, decisions and outcomes. Governments release more information during the formulation and approval stage of their budget process than they do on implementation, which undermines government accountability for spending the budget.

A closer look at the health and education budgets in 28 of the countries surveyed finds that they lack the kinds of information needed to monitor service delivery. Global debt levels are spiraling, but budgets are missing details on the levels, risks, and sustainability of public debt. Many organizations are now focused on tax equity and increasing revenues, but few countries provide detailed reporting on tax expenditures – the revenue lost from breaks or exemptions given to business or individuals.

As an experienced campaigner I’m a little worried to quote some of the OBS findings – for fear they’ll be abused by the callous to justify inaction on funding the COVID-19 fight. Nativist populists will use any data they can about wastage overseas to stop funding the global fight against poverty and disease. But when we don’t honestly discuss these risks, we are ourselves increasing the long-term risk and erosion of precious public trust. I’ve found, in campaign after campaign, that when it’s time to push for a major global financing mechanism, campaigners do not press the point about the importance of open budgets, contracts and government for fear it will scare away funds. We must move past that fear and focus on both getting the necessary funds and ensuring they’re used accountably. In truth we have made strong progress on transparency and accountability as part of campaigns for debt relief, aid and increased domestic taxation to fund sustainable development. But this Open Budget Survey shows we have much further to go.

A New DATA Deal

How fiscal transparency and accountability practices should be embedded in all COVID-19-related public finance activities, including raising and managing debt, is well covered here by the International Budget Partnership’s most recent blog, “A Call to Action on Open Budgets during the COVID-19 Response,” and the details of how the openness of response and recovery plans builds trust and improves results is well addressed in the Open Government Partnership’s report “Open Response, Open Recovery: Building Trust as the Antidote to COVID-19.”

If I may crudely summarize these arguments: we need a new sustainable development finance deal, one which may sound superficially familiar to older campaigners: to Drop the Debt payments, increase Assistance, increase progressive Taxation – and in a parallel two-step partnership campaign for increased Democracy, Accountability and Transparency. Citizens within developing countries must be able to scrutinize financing through open processes. If they can’t, financing can’t flow in confidence, corruption grows, trust ebbs.

The key thing about this partnership deal is that the partnership conditions are not imposed by policy makers in D.C. or London on the rest of the world. These conditions are demanded by the citizens of developing and emerging economies, themselves, upon their governments and upon global financing mechanisms and development partners. These issues aren’t just in Africa or the developing world. Citizens within OECD societies and traditional donor nations must be more vigilant at home for this deal – and fight for open accountable financing and government domestically, too. Globally, we will all need to scrutinize, through open budgets, to see where COVID-19 funds are coming from, how far they come at the expense of cutting other lifesaving accounts, and how often they truly arrive where needed. This is where the 78 member countries of the OGP – which span all regions and income levels – can lead by example.

The latest technologies can help us digitally deliver this partnership. Affordable mobile phones and airtime, connectivity, and the latest statistical survey tools, are driving new forms of local accountability, ground truthing at the grassroots the findings of satellite and big data analytics. And it’s key not just to beating COVID-19, but to leaving no one behind and achieving all the SDGs by 2030.

For example, the recently formed #FollowtheCOVID19Money network, formed by youth ground truth networks across Africa, should be scaled and strengthened to scrutinize both COVID-19 and wider health and sustainable development funds. 150 civil society groups across Africa recently met virtually demanding civic space to help scrutinize these emergency resource flows. It has been inspiring to partner with these fast-moving movements.

So let’s campaign like crazy for all the cash we can find, for the COVID-19 vaccine diagnostics therapies and frontline health-workers who must deliver these; let’s fight like heck for the humanitarian and economic response plans’ full financing, and ensure all these funds are additional and not carved from other essential life-saving programs; but let’s equally, at the same time, fight to ensure these funds flow through open contracts, open budget and open government through to the “last mile” of service delivery. If we do this, we won’t just beat COVID-19 – we will build the global social capital and effective networks needed to achieve all the Sustainable Development Goals by 2030.

Let’s apply that greatest vaccine of all: openness, to build up our strongest immune response: trust, and all the solidarity that comes with it.

Ring the alarm: governments unlikely to meet SDGs without renewed commitments to spend allocated funds

Ring the alarm: governments unlikely to meet SDGs without renewed commitments to spend allocated funds

How optimistic should we be about government commitments to invest the funds necessary to realize the Sustainable Development Goals (SDGs)?

According to Public Expenditure and Financial Accountability (PEFA) data recently submitted to the United Nations, we should be worried. Government underspending of budgets is a global challenge that may impede the realization of the SDGs.

SDG indicator 16.6.1 measures whether government spending is in line with the country’s approved budget. This is an important overall measure of government commitment to sustainable development, but it is also critical to the achievement of most of the other SDGs: key goals in health, education, or water and sanitation cannot be achieved if government budgets are not executed. The data on SDG 16.6.1 is thus a leading indicator of whether or not governments are likely to meet their overall SDG commitments.

The new PEFA data show that, globally, countries tend to underspend their budgets. On average, the 108 countries in the dataset underspent their budgets by 2% over the period 2004-2017. That might sound like a modest underspend, but lack of budget credibility is a particular challenge in low income countries, which underspend their budgets by an average of 5%.

This data is consistent with a recent IBP analysis using the World Bank’s BOOST data, which also found widespread underspending of overall budgets globally. In a smaller sample of 35 countries, average underspending over 2009-2017 in low income countries was 14%.

One thing that is clearly missing from the data provided to the UN, though, is information about what happens to sector spending. Even if a country’s budget is spent in the aggregate as planned, there may be major shifts between different types of spending. This is known as “compositional credibility.”

Our analysis found that on average, economic affairs budgets tend to be underspent, even as defense spending tends to rise beyond the budget during budget execution. Within economic affairs, one-sixth of agriculture budgets were not spent in our sample, with underspending of irrigation projects being especially prevalent in many countries.

While the data provided to the UN does not assess compositional credibility across countries, we are able to add other existing PEFA data on compositional credibility for 75 of the countries in their sample. When we do this, we can see that several countries with high overall budget credibility have low compositional credibility. Under the 2016 framework, of the 34 countries that would receive an A on overall budget credibility, half of them would receive a C or D on compositional credibility.

For example, Papua New Guinea received an A on indicator PI-1 in its 2015 PEFA report, as the overall budget deviated by less than 5% in all three years. Yet, it received a D on compositional credibility, as its compositional variance was greater than 15%. Relative to the overall budget, several administrative units related to education and health were consistently and often substantially underspent. For example, in 2011, the Department of Health and the National AIDS Council were underspent significantly⁠ — by 16% and 44%, respectively ⁠— even as the overall budget was spent. The Department of Education was also underspent by 18%. In contrast, the Department of Police was overspent by almost 30%.

Some deviations in planned budgets are inevitable, and when they happen, governments should explain why. However, other IBP research shows that governments typically provide only generic reasons. To enhance budget credibility, governments should instead provide specific reasons for at least the most important deviations in each sector and discuss the impact that they are likely to have on other priorities in the budget.

In addition to providing adequate reasons for budget deviations when they happen, governments should strive to develop more realistic revenue and spending plans in the first place. Governments should empower and hold to account those agencies responsible for collecting revenues and spending on areas that have historically suffered from budget deviations, such as certain health and education programs and infrastructure projects.

Civil society, of course, also plays a role in effecting good practices. Civil society organizations should shine a spotlight on government budget programs that suffer from lack of credibility, and engage formal budget oversight bodies, including legislatures and supreme audit institutions, in demanding that governments act on the budget credibility issues that they have identified.

We all need to focus not just on overall budget credibility, but also the composition of actual spending against the budget. Otherwise, we may find that even governments who appear to have credible budgets have nothing to show when it comes to achieving the other SDGs.

By prioritizing budget credibility, including providing meaningful explanations for budget deviations, leaders and government agencies can build trust among citizens, donors, and the private sector. Now is the time to act, as more and more attention is being paid to this issue, a fact illustrated by budget credibility’s inclusion as an indicator in the SDGs. The UN and its members should draw appropriate lessons from and take corrective actions based on the budget credibility indicator to ensure that budgets for programs that are meant to support the achievement of the SDGs are fully used and thereby achieve their intended objectives.