African states remain at the mercy of their elites

Finance ministers the world over are given a hard time when they try to make cuts. But there cannot be too many countries where balancing the books is considered a prisonable offence. That is the case, though, in Liberia, where Amara Konneh, the finance minister, is being threatened with incarceration by outraged lawmakers who say he has overridden their constitutional authority to decide tax and spending. One does not need to be a cynic to wonder if the true cause of their anger lies closer to home: Mr Konneh wants to cut their pay.

It all began with a letter in which Mr Konneh’s office pointed out to senators that spending could not go on as before. The reasons were obvious. Liberia’s economy had been hit by twin shocks. First, in 2014, there had been a calamitous outbreak of Ebola, now thankfully over, which had killed nearly 5,000 people and brought foreign investment to a halt. Then the price of iron ore and rubber, the country’s main exports, collapsed. As a result, there was expected to be a revenue shortfall of about $70m in the $622m budget. And so Mr Konneh was asking the legislature to trim its own budget by about 10 per cent, part of across-the-board cuts he was imposing on all but non-essential items. That is when senators ordered his arrest on charges of contempt. His case is pending following a stay by the Supreme Court.


Behind the almost comical posturing lies a serious issue, one that resonates across Africa and beyond. Liberia, one of the world’s poorest states with average income per capita of $469, pays its lawmakers $13,000 a month, not counting generous allowances for housing, petrol and so on. The running costs of Liberia’s legislature soak up more than 10 per cent of government revenue.

Liberia’s lawmakers are mostly unrepentant. Senator Alphonso Gaye says compensation is modest compared with places such as Nigeria and Kenya. When he visits his rural constituency, he says, he is inundated with requests for money. One will say the village hand-pump is broken, another that he needs help with school fees or medical costs or money for his roof, he says. “These are the things they demand of lawmakers. You need some cash. Your respect in this country depends on your capacity to respond to people’s demands.”

Mr Gaye’s defence has the ring of truth. In much of Africa, elected politicians and public “servants” more generally are not expected to govern for the greater good. Rather, their duty is to help family, friends and supporters. Richard Dowden, executive director of the Royal African Society, says the pull of the extended family is gravitational. Once one member of the clan lands a good job, of which a well-paid government position is about the best, it is almost impossible to resist the clamour of those demanding assistance. That is one reason tax revenue is so low in most of Africa. Why would people pay tax if much of the money is simply stolen or distributed to others, and provision of public goods is so inadequate?

A study of public sector wage bills by the World Bank found that countries in sub-Saharan Africa spend almost 30 per cent of government revenue on public sector wages, nearly double the average in higher-income states. Yet public services, including schools and hospitals, are mostly dire. The findings support the view that poor countries suffer from what economists Daron Acemoglu and James Robinson call “extractive” institutions, which are poor at providing public goods but adept at enabling governing elites to extract income.

It can be unhelpful to blame everything on the legacy of colonialism, but it is true that African leaders inherited states whose main purpose was to extract wealth and resources. In too many cases, white colonialists have simply been replaced by black elites. (Liberia, founded by freed American slaves, is a slightly different case.)

Jared Diamond, an academic and author, says that before the rise of the first states in about 3,400BC, human societies were tribes or chiefdoms without complex institutions of government. “A long history of government doesn’t guarantee good institutions, but at least it permits them; a short history makes them very unlikely,” he writes.

Back in Liberia, Prince Johnson, once one of the country’s most notorious warlords, is in his second nine-year senatorial term. He too said legislators were not overpaid. Some, he observed, went practically bankrupt dishing out money to hangers-on. “The first law of nature is self-preservation. I have to survive before I can help someone else. I cannot be a senator in this country and live in a zinc shack,” he said, gesturing around his large compound. “I’m a big man. I’ve got to live big.”


David Pilling


Fonte: FT