Cablegate: Decentralization Two Years On: Hopeful Signs
VZCZCXRO7356
PP RUEHMA RUEHPA
DE RUEHFN #0535/01 1840728
ZNR UUUUU ZZH
P 030728Z JUL 06
FM AMEMBASSY FREETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 9980
INFO RUEHZK/ECOWAS COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 0167
RUEKJCS/SECDEF WASHDC
RHEFDIA/DIA WASHDC
RUCNFB/FBI WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
UNCLAS SECTION 01 OF 05 FREETOWN 000535
SIPDIS
SIPDIS
E.O. 12958
TAGS: PGOV KDEM SL
SUBJECT: Decentralization Two Years On: Hopeful Signs
Abound, Significant Challenges Remain
-------
Summary
-------
1. Since May 2004, when Sierra Leone held its first local
elections in 32 years, local government has made
tremendous progress. Devolution of government
responsibility and funding have begun to occur in a real
way, and local communities are starting to see the
benefits. Although there is still much progress to be
made in terms of skills of local government staff,
financial transparency, local revenue collection, and
cooperation with chiefdom authorities, there are hopeful
signs that local government is starting to take root and
will become a positive force for local governance and
development. Over the longer term, strong local
government structures will act to widen the political
playing field and help develop better-equipped
politicians to govern at the national level. End
Summary.
-----------------------------------
Devolution Hurts. Donors Can Help.
-----------------------------------
2. Devolution is a complex process in which local
councils assume some responsibilities for service
delivery previously held by central government
ministries. The ultimate goal is to bring government
closer to the electorate. If successful, devolution
could solve a host of Sierra Leone's post-war problems:
it increases the space for citizens to participate in
politics, can restore citizens' trust in government,
rebuild social capital, and address immediate needs for
recovery. Spreading a culture of inclusion and
accountability will go a long way in improving Sierra
Leone's dismal history of official vice and
mismanagement.
3. In May 2004, Sierra Leone held the first local
elections in 32 years. There are now 19 local councils
in Sierra Leone: five town councils (Makeni, Bo, Kenema,
Bonthe, and Koidu), 13 district councils (Makeni, Bo,
Kenema, Bonthe, Kono, Kailahun, Koinadugu, Pujehun,
Moyamba, Bombali, Port Loko, Tonkolili, and Western Area
(rural)) and one city council (Western Area (urban), the
capital city of Freetown).
4. There are many hurdles to successful devolution, and
among the most fundamental are a clear understanding of
how the process should work, what local service delivery
should look like, and how councils should be held
accountable to their electorate. Since local government
has been defunct for so long (and was not effective even
when it was active), there is no collective memory of how
to govern at the local level. Councilors and citizens
have struggled with these issues since the 2004
elections, and some local councils have clearly done
better than others.
5. The World Bank just granted Sierra Leone another $25
million to support its two-year-old Institutional Reform
and Capacity Building Project. The project focuses on
public sector finance reform and devolution, which World
Bank officials theorize would be the two most effective
entry points to improve governance.
6. Other donors are complementing the World Bank's
efforts with their own devolution support programs.
USAID, for example, is sponsoring a local governance
project for six councils that strengthens the basic unit
of government - the ward committee - and develops
Regional Information and Community Centers, which serve
as repositories of resource material relevant to local
communities as well as centers for local meetings in some
districts. The Japanese Government is funding the GoBifo
project, a two-district pilot project aimed at increasing
community participation in development planning. (Note:
GoBifo is a Krio word for "progress." End Note.)
------------------------
Money Changes Everything
------------------------
FREETOWN 00000535 002 OF 005
7. In FY 2005, the Government Budget started making line
item provisions for spending by local councils. Although
the actual transfer of funds was significantly delayed,
in FY 2006 monies started to flow: approximately $8
million was allocated to local councils for
administrative fees and devolved ministry functions,
including Health, Education, Agriculture, Social Welfare,
Youth and Sports, as well as solid waste management,
water, and fire prevention. Development grants, which
came mostly from the European Union and the World Bank,
totaled over $5 million. This represented approximately
7 percent and 5 percent respectively of the government's
total non-salary recurrent budget and development
expenditures.
8. Local revenue varies from district to district but is
generally based on income taxes, licenses, and market
fees. In diamond mining areas, councils also receive a
portion of the export tax collected through the Diamond
Area Community Development Fund. Over the years,
chiefdom authorities have been the collectors and
beneficiaries of such revenue, but the collection process
was rarely transparent and there was little incentive to
make it so. After the passage of the 2004 Local
Government Act, most districts raised individual income
tax rates from 500 Leones (approximately $0.17) annually
to 5,000 Leones (approximately $1.67) and most agreed
that chiefdom authorities would be entitled to 60 percent
and that the remaining 40 percent would be given to
district and town councils. (Note: This figure does not
include diamond revenues. End Note.) Mechanisms for tax
collection are not standardized, however, and are not
always effective. In sparsely populated Bonthe Disctict,
for example, chiefdom authorities assessed 28,658
taxpayers a total of approximately $46,000 in 2005, but
had only collected 60 percent of it by May 2006. In
Koinadugu District, chiefdom authorities have collected
taxes but have not turned anything over to the District
Council.
9. Most international development funds for local
councils were given through the World Bank's Rapid
Results Initiative (RRI), which gave local councils an
opportunity to identify, fund, and complete local
development projects (e.g., feeder roads, bridges, grain
drying floors, slaughter houses, water pumps, etc.). The
RRI started in 2004 and gave each local council small
grants of approximately $30,000 to complete projects
within 100 days. The initiative was meant to build new
councilors' capacity and to introduce, according to the
World Bank, "a culture of performance, accountability,
and results." The biggest success with the initiative so
far, World Bank officials say, is Bombali District, which
took advantage of a high level of community participation
to complete nine bridges and 14 box culverts for one
fifth the price it would have cost to use an outside
contractor.
10. The rapid infusion of World Bank funds have given
local councils important practice in handling money, even
more so because the systems for central government
payments and local revenue generation are still being
developed. Although the Accountant General has committed
to streamlining the process for handing over central
government money to local councils, the process currently
reflects the current GoSL's current dysfunction. Each
check written to a local council requires 237 signatures
in Freetown before it can be released. Once the checks
are released, accounting procedures at the councils are
not yet sufficient. Only eight councils have properly
accounted for the expenditure of the first tranche of
government money and therefore qualify for the second
tranche.
11. World Bank assistance will continue through a
transition period, which will last until at least 2008.
As World Bank RRI funds wind down, local revenue
collection will take on a much more important role. This
will be difficult, since local revenue generation is
still far behind in development. At present, only two
local councils are collecting enough revenue to sustain
themselves: Koidu and Bo Town councils. In the diamond
mining area of Kono District, the Koidu Town Council has
been most successful in collecting local taxes: 5,000
FREETOWN 00000535 003 OF 005
leones per person per year. In the northern area of Port
Loko, however, the District Council is only collecting 32
leones (approximately $0.01) per person per year.
-----------------------------
Councilors, Citizens Practice
New Skills: Results Vary
-----------------------------
12. Community participation in local government
activities is generally poor throughout the country and
occurs for a number of reasons. NGO monitors found that
sometimes meetings among ward committees, local
councilors, and members of the public simply do not
occur. When they do occur, community members are
sometimes kept out or are not allowed to speak when
allowed in. Also, community members who believe their
representatives are corrupt have demonstrated no interest
in attending local meetings. Many councilors do not live
in their wards and therefore are out of touch with their
constituents. A survey of residents in Bonthe District
revealed that over 80 percent of them knew the names of
their paramount chiefs, but only 44 percent of them knew
the names of their local councilors. The survey also
revealed that just over 20 percent of Bonthe residents
have ever seen their local councilor. (Note: Of course,
the same survey revealed that less than 10 percent had
ever seen a Member of Parliament, but still. End Note.)
13. Revenue collection is still difficult. In most
districts, chiefdom authorities are responsible for
collecting local income taxes. While there is often an
agreement that chiefs turn over 40 percent of their
revenue to the council, this does not always happen. NGO
monitors reported that there were many cases where there
is no accountability - among either unwilling taxpayers
or chiefdom authorities who do not account for the money
collected. People who have a family or friend connection
with local authorities often refuse to pay tax, as do
people who do not trust that tax money will be spent
responsibly. World Bank officials have calculated that
Freetown City Council, which has collected 1.4 billion
leones (approximately $470,000) in local revenue, could
be collecting at least 4.4 billion (nearly $1.5 million).
(Note: We hear that they are starting to solicit the
assistance of international NGOs to begin withholding
local tax from employees' paychecks, but it is still a
work in progress. End Note.)
14. Strained relations between councilors and chiefs,
administrative staff, and ward committees hindered the
performance of a number of local councils. In fact, a
recent National Accountability Group (NAG) report cited
generally cordial relations among all stakeholders in
only seven councils. In the remaining councils,
observers reported on absentee councilors, frustrated
ward committees, dictatorial council chairmen, hostile
chiefs, and even conflicts between overlapping town and
district councils. One of the most contentious rivalries
are between council chairmen and chief administrators,
who are currently civil servants seconded by central
ministries. Francis Johnston, Chief of Party for USAID's
decentralization project, noted that most local chairman
view chief administrators as government hacks who refuse
to cooperate with them because they are doing the bidding
of the central government. This situation should
improve, Johnston said, when administrative mechanisms
are put in place for councils to recruit their own
administrators.
15. Service delivery will be the most important component
of decentralization, because other functions (community
participation, revenue collection) will depend on it.
While some councils (Bo) are assuming their devolved
responsibilities more quickly than others (Port Loko),
all have had the opportunity to get their feet wet in
development work with the World Bank-funded Rapid Results
Initiative projects. Generally speaking, experience with
the RRI has shown that local councils can implement
development projects cheaper and faster than central
government ministries. Each council has multiple
projects underway, and community members have a concrete
way to evaluate their performance. The NAG report
identified major problems in only six councils (Freetown
FREETOWN 00000535 004 OF 005
City, Makeni, Kambia, Koinadugu, Bonthe, and Pujehun
Districts).
---------------------------------
A Glass Half-Full? The Makeni
Town Council Embezzlement Scandal
---------------------------------
16. In 2005, the Makeni Town Council received nearly 165
million leones (approximately $59,000) in the second wave
of World Bank RRI money for three development projects
(construction of culverts, dustbins, and mechanized swamp
rice cultivation). Makeni residents, however, were
suspicious about the way the contracts for the projects
were awarded. As a result, a group of civil society
representatives raised the red flag, and a joint
government/donor/civil society investigation conducted.
The investigation revealed that the Town Council Chairman
and other councilors had misappropriated 88 million
leones (approximately $31,400).
17. The discovery of corruption made national headlines
and gained the attention of opposition All People's
Congress (APC) Party Leader Ernest Bai Koroma, who called
for the Chairman to step down from his post. (Note:
Makeni is an APC stronghold, and the entire Town Council
consists of APC representatives. End Note.) Makeni
residents also organized a series of protests using civil
society groups, radio, stay-at-home and market strikes,
and civil disobedience to force the Chairman and his
Deputy to resign, which they finally did in February
2006. (Note: Koroma acted only after being pressured
privately by the NAG founder Zaynab Bangura, who reminded
him that his anti-corruption credibility was on the line
ahead of next year's presidential election. End Note.)
18. Although the incident put a damper on taxpayers'
willingness to pay their local taxes, the protests and
involvement from civil society were a sign that Sierra
Leoneans can, when confronted with hard evidence of
wrongdoing on the part of their elected officials, get
involved in local politics and get rid of them peacefully
and effectively.
----------------
Making It Better
----------------
19. Community involvement is a key element in improving
local governance and service delivery, but the
involvement requires the commitment of both community
members and their local representatives. Ward committees
need to meet with their fellow citizens to learn about
their concerns, and councilors need to meet with ward
committees to represent their constituents at Council
meetings. Results of meetings, decisions about local
projects, and budget information should be available and
posted publicly. Outreach by councilors in the form of
notice boards, radio, and open meetings can go a long way
in improving community access and communication.
Community radio, a relatively new phenomenon in Sierra
Leone, will be a valuable tool in helping representatives
communicate with constituents.
20. To increase their stake in revenue collection, local
councils need to become more involved in revenue
collection, whether it comes as a division of labor
between chiefs, councils, and ward committees, side-by-
side collection, privatizing collection activities, or
increased oversight. While this may be a difficult
negotiation with traditional chiefdom authorities who are
seeing a dwindling of authority, it is necessary. Also,
taxpayers need to pay their taxes in order to see public
benefit. This will only come with trust that their
elected and traditional representatives will do the right
thing with tax money, which starts with transparent
accounting procedures.
21. Lines of responsibility and authority remain unclear
among councilors and administrative staff as well as
councils and chiefs. Clearing up these grey areas will
go a long way toward improving stakeholder relations and
increasing performance.
FREETOWN 00000535 005 OF 005
-------
Comment
-------
22. Decentralization is still a work in progress. The
World Bank-funded Rapid Results Approach gave an
opportunity for local councils to get their feet wet with
development projects, but much of the devolution of
responsibilities from the Central Government remains to
be done. There are a number of hopeful signs that
decentralization is serving its intended purpose: for the
most part, interested citizens now have nearby elected
representatives to complain to about the inevitably
imperfect process of public administration. In some
cases, citizens have confronted, opposed, and sometimes
reversed blatant corruption by public officials and
contractors. The next round of local government
elections, set for 2008, will present an opportunity for
voters and prospective candidates alike to make more
informed choices about who should be a local government
representative. Experience so far has shown the task to
be more challenging and less lucrative than previously
thought, and hopefully increased devolution of
responsibilities and improved revenue collection
mechanisms will coincide with a more informed and engaged
public who will elect better-qualified candidates to
office.
23. Over the longer term, local councils will open the
political system, which has been mainly the purview of
traditional paramount chiefs and their relatives in
senior positions in the central government, judiciary,
and parliament. Politics will become less exclusive,
with more opportunity for political mobility, especially
in the urban councils, which should translate to even
brighter prospects for presidential and parliamentary
elections in 2012.
HULL