AEC PLENARY SESSION 1: The financing of long-term development trajectory for developing countries.
Roger Myerson, Nobel Laureate and American economist, says African governments need to devolve power and responsibility to local councils, to spur economic competition and development.
Myerson was speaking on the role institutional and political frameworks play in Africa’s capacity to leverage its resources to finance its development at the 2021 African Economic Conference (AEC) in Cabo Verde. He said the lack of decentralisation of political and economic responsibilities is an impediment to the developmental aspirations of some countries on the continent.
He said Africa needs to evolve into a system where responsibility is devolved to local councils, and where there is a balance of power between national governments and sub-nationals. Citing his study on Cameroon’s decentralisation law, the Nobel Laureate said some national African governments operate a closed system where power is concentrated at the centre, allowing for corruption and cronyism.
The Nobel Laureate said successful countries devolve between 20 and 30% of their national budgets to local councils.
‘’A lack of decentralisation is worse than a lack of democracy; a lack of decentralised systems can be most detrimental to development than a lack of democracy,’’ Myerson said, adding that ‘’if you are not giving 20% of the national budget to sub-nationals, you are not serious about decentralisation’’.
The economist said there is a need for clarity with regards to responsibility across all levels of government. He said when power is localised it will spur leaders with proven abilities at the grassroots level to serve the public.
He added that there is a need to remove the barrier to entry to public service which a rigid and centralised system creates. He said the number of people who can compete at the national level is few, and that the decentralisation of power will offer citizens in the localities the opportunity to decide their own fate.
Beyond the need for human capital development, Myerson said, ‘’there is the need for public political capital, people with the capacity and integrity to manage public budgets’’.
He explained that local councils are more accountable to the people on the ground, and that they ensure a more equitable distribution of public goods, adding that the lack of decentralisation is the missing piece to the African discourse.
The session ended with questions from delegates, notably on tax administration in a decentralised system. Myerson answered that tax administration is a responsibility that should be shared among national and sub-national governments in a federal system.
Ahunna Eziakonwa, Assistant Administrator and Director of the UNDP Regional Africa Bureau, who moderated the session, said Africa’s leadership journey must begin, not from the top down, but from the grassroots level.
The 2021 African Economic Conference began on Thursday, December 2 in Cabo Verde. The theme this year is ‘Financing Africa’s Post COVID-19 Development’.
By Fredrick Nwabufo