In 2003, Universal Basic Education (UBE) programme was launched to provide free and compulsory education from primary to junior secondary school. More than 15years since the inception of UBE, it remains curious that many cases of out-of-school children (OOSC) are still been attributed to monetary costs. For instance, the National Education Data Surveys (NEDS, 2015) indicate that 26% (23% public school and 49% private school) of children that stopped attending school in 2015 attributed it to monetary costs and this has consistently been the top reason for dropping out of school since 2004 (See Table 1). Similarly, Table 2 shows that 18% of children of school age not enrolled at all alluded it to monetary costs, which is the third highest reason after distance to school and labour needs of households. However, analysis of the reasons for exclusion as we did below suggests element of costs cut across most of these factors.

What are the Costs of Education?

From an economic angle, three types of costs are incurred in the process of schooling. First is the direct costs, such as expenses explicitly incurred on educational activities. These include tuition fees, feeding, uniform, transportation, books among others. Second, there are institutional costs that encompass recurrent costs (salaries, teaching aids, utilities, maintenance and repairs) and capital costs (land, buildings, furniture, equipment). The last category is the indirect costs, which is the opportunity costs of time spent by teachers and students in the process of schooling. The indirect costs is in principle, what would have been earned if not in school. It is, therefore, more relevant in evaluating decision on the cost-effectiveness of schooling.

In the private school setting, the direct and institutional costs are tied together and parents are expected to fully bear the costs. For public schools, how much government pays depends on the education policy in place. In Nigeria, the free education policy as stated in the UBE Acts (2004) only covers institutional costs plus tuition fees and to some extent, feeding and books. It, therefore, means that parents are expected to bear some costs despite education being claimed to be free. In simple terms, what is free under basic education in Nigeria is the costs incurred once a child reaches the door of the school.  It is also important to note that a rational economic agent will invest time or resources in schooling only when the perceived benefit is at least equal to the costs.

Institutional and Direct Costs: How they affect school access

Given that the government does not fully cover the direct costs, parents bear a proportion of the costs of education. Although contributions from parents are expected to be small, this can still present a significant burden depending on households’ income level. Some of the costs reportedly paid by pupils in public schools in Nigeria are shown in Table 3. On average, these costs added up to N25800. For poor households that live below N700 a day, these associated costs amount to a significant burden to sending their children to school. Essentially, the associated costs of education is the monetary cost that parents were alluding to for children dropping out or not attending school at all.

Further dissection of the costs paid in public schools in Nigeria reveals another dynamics at play. Government has not been sufficiently funding the institutional and direct costs components as promised in the UBE Act. Some of the reported expenses are for items supposedly cover under the free education programme. For example, school development levy, school supplies and to some extent textbook and exercise books are part of the institutional and indirect costs promised under the UBE Act. Invariably, school administrators are using various creative means to transfer the shortfall in government funding to parents.

Furthermore, poor funding could explain other reasons given for not attending or dropping out of school. For instance, 23% and 14% of those that dropped out and those enrolled in school respectively is due to poor school quality. An additional 14% and 13% of those that dropped out and those enrolled in school respectively are due to distance from school. The poor school quality and distance to school are emblematic of poor financing for institutional costs.

Indirect costs: How they affect school access?

When a child is sent to school, the household and society loss productive hours that could have been spent on adding to family income and invariably gross domestic product (GDP). However, the wage loss is counted as an investment since households and society benefited more in future through higher income and productive labour force.

However, all this rests on the assumption that households are well informed about the benefits of education. In many instances, this is not the case. The second top reason for children dropping out of school (15%) and for those not enrolling (21%) is due to the early transition to the labour market. According to UNESCO (2014), 24.7% of child labourers aged 7-14years in Nigeria are out of school.

The overall trend suggests that many families consider the indirect costs to be very high, and prefer early entrance into the labour market. For instance, the Nomadic group that accounts for almost half the population of the OOSC in Nigeria- It has been observed that children from this group enter early into the labour market to support family business as herdsmen. In essence, indirect costs is arguably the single largest contributor to OOSC problem in Nigeria.

In general, while there seems a multitude of reasons for OOSC problem, our analysis indicates majority of the factors still boil down to costs of education. If direct, institutional and indirect costs, are not sufficiently catered for, it will translate to more population of OOSC and a future demographic burden to the country.

Photo:UNICEF

North-eastern Nigeria, comprising of Borno, Taraba, Adamawa, Yobe, Gombe, and Bauchi states, has become the most uninhabitable region in the country due to series of Boko Haram attacks. Despite counterterrorism strategies of the Government, the Boko Haram insurgency has shown no signs of abating and have widened in its complexity. Additionally, clashes between nomadic Fulani herdsmen and farmers have been on the rise in the region and North-central Nigeria. As a result, millions have been displaced, killed, migrated and living in deplorable conditions. A lot of attention has been placed on Internally Displaced Persons (IDPs) – and rightly so – since they face the brunt of these violent attacks. However, very little attention has been paid to the efforts of and challenges facing humanitarian workers.  This piece delves into the challenges humanitarian workers face in conflict-affected parts of Northern Nigeria and provides key recommendations for addressing these challenges.

The Need for Humanitarian Assistance

The insurgency in North Eastern Nigeria has made many areas in the region listed as unsafe and high-risk zones. For instance,  Download File">eighty percent of Borno state is listed as high or very high-risk zones. Since the start of the Boko Haram conflict in 2009, over Download File">20,000 people have been killed, over Download File">4,000 have been abducted, and millions have been displaced. The 2018 International Organization of Migration (IOM) report estimates that nearly Download PDF">2 million persons are displaced and 7.7 million Download PDF">Nigerians are in need of humanitarian assistance and services in the region. Humanitarian services alongside relief items aids such as food, medical services, shelter, education, water, and sanitation are most needed in the region. Humanitarian workers operate in the front-line and are charged with the responsibility of saving the lives of IDPs, reducing their suffering, and facilitating the effective distribution of aid materials. In Nigeria, there are only 2, 000 indigenous and 500 international aid Download PDF">workers providing humanitarian services in worst-affected states of Borno, Yobe and Adamawa states.

Challenges Facing Humanitarian Workers

Increasing security risks: It is becoming increasingly dangerous to provide humanitarian assistance in Nigeria given the rise in the death of aid workers. Download File">Recorded deaths have increased from one aid worker (between 1997 and 2008) to thirteen aid workers (between 2009 and 2017). In a single Boko Haram attack in Download PDF">March 2018, three humanitarian workers were killed and three sustained injuries, which led to the evacuation of 40 aid workers and the temporary suspension of humanitarian deliveries in Rann, Borno State, after a raid on a camp housing 55,000 IDPs. There are cases of humanitarian workers being kidnapped for ransom. Due to poor security conditions, amid the lack of well-armed military Download File">personnel, humanitarian workers are often deterred from providing needed assistance in many conflict-affected parts of North East Nigeria. On account of security issues, three Local Government Areas (LGAs) have been identified as completely Download File">inaccessible , while 26 LGAs in Adamawa, Borno and Yobe states are identified as partially accessible.

Insufficient Humanitarian Workers: The number of humanitarian workers in Nigeria is low when compared with the over 7.7 million people in need of humanitarian assistance. Only 2,500 aid workers provide humanitarian services in the most-affected states of Borno, Yobe and Adamawa states. The low supply of humanitarian workers means that available aid workers have an overwhelming workload. However, the reward for humanitarian assistance is not reciprocal to the effort and energy exerted by humanitarian workers who risk their lives in insecure regions of the country. A global survey carried out by the United Nations High Commissioner for Refugees (UNCFR) indicates that Download PDF">72 percent of its aid workers lack reciprocity between effort and potential rewards (effort-reward imbalance).

Inadequate Health Care: Due to the dearth of mental health facilities, humanitarian workers in Nigeria do not receive adequate care for their mental health. Generally, there is a considerable Download PDF">neglect of mental health issues in Nigeria and information about mental health is lacking, with only Download PDF">7 mental health facilities in the country. Yet, Download PDF">evidence suggests that humanitarian workers are at risk of mental health issues given the hazard associated with their line of work. Humanitarian workers relative to the general population are more likely to suffer from anxiety, depression, Post-Traumatic Stress Disorder (PTSD), secondary traumatic stress, burnout, and alcohol misuse. This is due to exposure to traumatic events while administering humanitarian assistance amid contact with victims of conflict as well as an effort-reward imbalance. The exposure of humanitarian workers to traumatic events and neglect of mental issues in the country is a problem facing humanitarian workers in Nigeria.

Way forward

The government needs to do more to establish its presence in conflict-affected regions of North-Eastern Nigerian, in order to provide more support for displaced persons and humanitarian workers in the area. As such, we recommend:

Federal Government: The Federal Government particularly needs to improve its military presence. Download File">Over 50 percent of the security provided in displacement camps in the region are self-organized, signifying a lack of military presence. Humanitarian workers require military protection in the course of rendering assistance to reduce the life-threatening risks. Pending normalcy, the Federal Government should also increase its financial commitment and provide incentives for private funding. The Federal Government of Nigeria should increase humanitarian funding commitment in the region, beyond the Download File">0.8 percent of the needed fund it currently provides. This will help bridge the supply-demand gap in financial aids. The government should hence, increase the humanitarian aid in its budgetary allocation to be better equipped in responding to crisis and other disasters. Amid fiscal constraints, the government can also encourage private sector participation by providing incentives, such as short-term tax deductions, for the private sector to provide humanitarian assistance in affected areas. Also, there is a need to raise public awareness of the needs of displaced persons and the need for more aid workers.

State and Local Governments: States and local government are seen as first responders and immediate providers of assistance due to proximity. In order to reduce causalities, there is a need for state and local governments to respond quickly to crisis situations. To achieve this, local authorities should develop an effective information and communication sharing system between internal security agencies and displacement camps.

Role of Non-Governmental Organizations: The magnitude and duration of the crisis warranted the intervention of international and civil society organizations (CSOs). International Non-Governmental Organizations (INGOs) and local CSOs have provided various forms of humanitarian assistance over the years and are urged to continue to respond to call for emergency assistance in Nigeria. It is important for INGOs to collaborate with local partners in order to provide on-ground and security support as oppose to working in silos. INGOs also need to strengthen their institutional capacity by making preparation and debriefing mandatory for their staff who work in conflict areas. This is due to the exposure to violence and the associated mental risk facing aid workers. After debriefing aid workers should have access to good and affordable mental facilities to rehabilitate. Giving the link between effort-reward imbalance and mental health, INGOs and CSOs should pay humanitarian workers incommensurate with their invaluable assistance, so as to improve job satisfaction and reduce mental risk.

Regional Level: There is a need to promote regional cooperation and better coordination across borders. Governments, NGOs, and CSOs at the regional level should build a network among each other to share information and best practices, so as to learn from each other’s experiences and assist one another in capacity building. Regional institutions like AfDB, AU, ECOWAS can use their platforms to stress the importance of and challenges facing humanitarian workers.

The Sustainable Development Goal 4 (SDG4) is very ambitious. It seeks to ensure inclusive and equitable quality education for children across the world by the year 2030. Achieving this target is particularly significant in Nigeria where the state of education is daunting. In 2017, the World Economic Forum ranked Nigeria 120th out of 136 countries with regards to the quality of primary education. Similarly, over 10 million Nigerian children of primary school age were not enrolled in school in 2019. This is the highest number of out-of-school children globally.

In Nigeria, certain groups are more affected by the education crisis than others. For example, children in rural areas are worse off than their counterparts in urban areas, those in the Northern region in comparison to those in the Southern part, and girls in relation to boys. The overall state of education and the inequalities stemming from education access have severe implications on living standards, access to jobs, and economic growth.

Despite the efforts of the government, the private sector, and international donors towards addressing the challenges facing education in Nigeria, key obstacles continue to hinder its implementation.

What is obstructing the implementation of SDG4 in Nigeria?

Perhaps the most significant challenge that stands in the way of achieving SDG4 in Nigeria is funding. Although the government plays a dominant role in financing the SDGs, public funds remain inadequate. They are not sufficient to support the implementation. An estimate by UNESCO in 2015 puts the financial requirement to achieve SDG4 in Nigeria at about USD 34 billion per annum between 2015 and 2030.

To put the figure into perspective, Nigeria’s total federal budget for 2018 is USD 29.9 billion, with education accounting for only 7% of this amount. Sub-national governments have even smaller resources at their disposal to fund their budgets. This implies that if public resources are solely relied upon for implementing quality education goals, then Nigeria already faces an annual financing gap of over USD 32 billion.

Another factor that hinders the proper implementation of the global agenda is the limited alignment of crucial aspects of SDG4 to existing national policies. SDG4 relates to education objectives set in the Economic Recovery and Growth Plan (ERGP), Nigeria’s medium-term development plan, and the Universal Basic Education (UBE) Act, which is the main legal framework for primary education. But there are essential omissions in the national policies particularly relating to education quality and learning needs of internally displaced children.

Data on enrollment and other indicators on the access to education and educational resources are available. However, gaps remain in gathering useful metrics that capture learning outcomes at a disaggregated level. This is needed to track SDG 4 successfully. Even in the limited cases where data is available, it lacks sufficient periodicity. That fact makes it less useful for well-timed tracking of progress on SDG4.

What is the next course of action?

Given the highlighted implementation challenges, more proactive measures are required to meet the ambitious target set under SDG 4. Through our findings at the Centre for the Study of the Economies of Africa (CSEA), within Southern Voice’s “State of the SDGs” project, we have come up with suggestions. We recommend the following interventions to:

The Nigerian Government

The crucial step in improving education financing is to ensure an increase in budgetary allocation to the sector. However, this will require a rise in domestic resource mobilization to expand fiscal space. It also means earmarking a significant proportion of the revenue accruing to the education sector. On the policy side, existing policies should be reviewed to integrate SDG4 into all national development plans. Its implementation should be institutionalized at state and local levels.

The Private Sector

The Addis Ababa Action Agenda highlights the importance of the private sector in the development agenda. Private sector partners should engage with the government to achieve SDG4. They can do so by internalising sustainable business practices and implementing more strategic corporate social responsibility programmes in education. The private sector is the primary source of innovation. It is therefore instrumental in bringing creative solutions and new technology to solve access and quality issues in education, particularly in hard-to-reach areas.

Investments from the private sector will also be vital in filling the funding gap. The growth of institutional investors in Nigeria, particularly pension funds and insurers, is mobilising capital that could be channelled to SDG4-related investment. Besides, public-private partnership initiatives de-risk investment in the social sector and ensure that private sector contribution is measured, not only in terms of profitability but also in terms of social impact. This will spur the private investment allocation to education.

The International Donor community

International donors are important actors in financing the global agenda given that domestic resources are inadequate in meeting the SDG financing needs. A large number of educationally disenfranchised children live in middle-income countries like Nigeria. That is why education programmes should be prioritised in the development assistance portfolio. It is also crucial to assist the government in capacity development to mobilize domestic resources. Donors can also provide a platform for developing countries to share, exchange and scale up development solutions.

With this multi-stakeholder approach and strategy, Nigeria will be better positioned to achieve SDG4 by 2030. This will contribute significantly to building an inclusive and sustainable society where every child has access to equitable and quality education.

About the SVSS project

The Southern Voice “State of the SDGs” initiative provides evidence-based analysis and recommendations to improve the delivery of the Sustainable Development Goals (SDGs). As a collaborative initiative, the program compiles a broad range of perspectives that are usually missing from international debates. This report aims to fill an existing knowledge gap. Southern Voice is confident that it will enrich the discussions on the SDGs and level the playfield with new voices from the Global South.

This blog was first published on  SouthernVoice

The presence/extent of political will is a key determinant of the success or failure of policies. It is captured by the capability of political actors to achieve the implementation of policies which they prescribed or supported. Political will can be verbally expressed, observed through institutional changes, or demonstrated by budgetary commitments by state actors (Shiffman, 2007; Fox, Goldberg, Gore & Barnighausen, 2011).+ Importantly, the application of political will in achieving policy change usually involves other stakeholders, beyond state actors. Thus, the success in policymaking really depends on a complex interplay of varying degrees of interests, motivations, and beliefs; competencies and skills; coordination abilities and strategic decision-making; among many others.

In societies with huge governance and institutional deficits, political will can play an active role in navigating the challenges to achieve the desirable policy goal/change. However, political will has been generally weak in most societies in Africa, where several constraining factors limit the ability to genuinely move for policy change. In the absence of strong political will, the influence of non-state actors in providing policy support for social and political change becomes critical. In particular, Civil Society Organisations (CSOs) and Trade Associations have been the driving force behind some of the policy decisions in Africa. These non-state actors are generally abreast of the issues the general public faces, and therefore they can mobilise action around issues that protect the interest of citizens.

So while the state bears the ultimate responsibility for effecting policy change, non-state actors may trigger political will, or support an existing one. The likelihood of political will effecting policy change(s) can well depend on the role played by these non-state actors. Following some tenets of Brinkerhoff and Kulibaba’s (1999) conceptual framework for political will for anti-corruption reforms, this piece highlights two indicators of political will: the locus of the initiative and the mobilisation of stakeholders. + It throws light on two separate instances where the influence of non-state actors can drive the build-up of political will for policy change – in tobacco taxes, and trade policies in Nigeria.

Tax increase on tobacco products

Tobacco use has been long proven to be hazardous to the health of both primary and secondary consumers. Governments across the world have made several efforts to curb the use of tobacco through measures such as taxation, publicising the dangers of tobacco smoking, banning use in public spaces, among others. While measures such as these are typically government-driven, non-state actors can play notable roles in shaping their design, implementation, and evaluation. Usually, the loci of initiative of tobacco control measures are government ministries, particularly the Health and Finance ones (see Danishevski et al., 2008; Tam and Walbeek, 2014; and Hoe et al., 2016).+ However, in Nigeria, the recent tobacco control legislation was mainly driven by CSOs, particularly the Nigerian Tobacco Control Alliance (NTCA) – the umbrella organisation dedicated to tobacco control in Nigeria.

NTCA consists of domestic civil society groups, research organisations, Community-Based Organisations (CBOs), Faith-Based Organisations (FBOs), international organisations and professionals, and their activities are mostly donor funded – by Bloomberg Philanthropies and Campaign for Tobacco Free Kids (CTFK). The Alliance mobilised diverse stakeholders and was able to effect the tobacco policy change by harnessing the respective competencies of the members – mostly through evidence-based research, advocacy, and awareness creation. This section provides chronological narrative of the key activities/events that led to the tobacco tax policy change.

As the targeted policy change was to increase excise taxes, evidence-based research became critical in the tobacco control campaign of the Alliance. A report by the Nigerian Tobacco Research Group (NTRG) revealed the tobacco industry was targeting children with promotions, advertisements and the sale of tobacco products around schools as part of their marketing strategy. With such evidence, and the increasing momentum towards tobacco control across the globe, the Alliance became more motivated to explore ways to discourage both tobacco consumption and initiation of use. This coincided with a period when the Nigerian government, particularly the Ministry of Finance, was exploring alternative sources of non-oil revenue. Taxation, which has been proven to be the most effective control measure, became the focus. The Alliance then reached out to the Centre for the Study of the Economies of Africa (CSEA), which had conducted a study on tobacco tax simulations, to join the group in order to provide the much-needed evidence to inform their advocacy efforts.

The Alliance was notably vibrant in their advocacy for the tax increment, and were able to achieve buy-ins from the relevant stakeholders and the public. Reports, articles, and press releases highlighting the growing dominance of the tobacco industry in Nigeria, as well as their marketing strategies were released to the public. In addition, the Alliance educated the public in general and young people in particular on the dangers associated with tobacco use and second-hand smoking. It was revealed that tobacco use kills more than 7 million people globally each year, and developing countries like Nigeria will contribute 80 percent of these deaths by 2030 (World Bank, 2019).+ Furthermore, the potential impacts of substantial increments in tobacco tax on public health and the government revenue base were made known to the wider public.

As the momentum for reduced tobacco consumption and higher government revenue was building, a workshop of the Technical Working Group on Tobacco Control became the critical platform for the push for an increase in excise taxes on tobacco products. The workshop gathered policymakers and tobacco taxation experts from relevant government ministries and agencies including the Ministry of Health, Ministry of Finance, Ministry of Budget and Planning, and the Federal Inland Revenue Service; as well as from ECOWAS, CSOs, research institutes, and the media. The group noted that there were huge shortfalls in the tax rate at the time when compared to the WHO-recommended excise tax burden of 70 percent, and stressed the need for stronger tobacco control laws. They deliberated on the appropriate excise tax that would reduce tobacco consumption on one hand, and increase government revenue on the other (Win-Win), using evidence from tobacco tax simulations presented by research organisations.

Four months after the workshop, the Nigerian government announced a new tax policy for tobacco products and alcohol beverages. While the new policy maintains the current 20 percent ad valorem-based excise duty rate on tobacco products, it introduces an additional N58 (US$ 0.19) specific tax on a pack of cigarettes which will be implemented over three years (N20 in 2018; N20 in 2019; and N18 in 2020). Although the increment puts the excise tax burden at 16.4 percent, which is still way below the WHO-recommended excise tax burden of 70 percent, it signifies a major milestone in the campaign against tobacco use – a notable success.

Opting out of the EU-West Africa EPA

In April 2014, the Nigerian government opted out of the EU-West Africa Economic Partnership Agreement (EPA) which comprises of the 15 ECOWAS states and Mauritania. The EU-West Africa EPA aims to facilitate free trade, greater regional integration, and economic development while, protecting infant industries in West Africa. The economic anchor of the Agreement is the immediate removal of 100 percent of the custom duties for West African goods entering into European Union member states, and the gradual removal of up to 75 percent of tariff lines for products from EU into West Africa. It is noteworthy to mention that most West African countries including Nigeria participated in the trade negotiations for about ten years, but Nigeria opted out after the negotiations had been finalised.

The Nigerian government opted out of signing the EPA for the principal reason that the CSOs, particularly trade unions, were not in support of the EPA. At the 2016 Plenary of the European Union Parliament in Strasbourg, France, President Buhari stated that “…the Manufacturers Association of Nigeria (MAN) and Associated Trade Unions, raised concerns over the negative impact of the EPAs on Nigeria’s industrialisation programme”. + The concerns centred around the potential negative impact of the EPA on the country’s revenue base and balance of payment position, noting that the influx of goods into the Nigerian market at a significantly reduced tariff would lead to losses in government revenue and increased imports. The Manufacturers Association of Nigeria (MAN) which represents about 2,000 private and public companies, as well as the National Association of Nigerian Traders (NANTS), built the momentum against the Agreement by effectively mobilising stakeholders to provide evidence-based analyses, lobby key interest parties, and organise various media campaigns.

The core of the analyses is that on one hand, Nigeria will not benefit from the EPA, as the majority (95 percent) of its exports to the EU is oil and gas which is not subject to import duty; and that local manufacturers have limited capacity to produce and export industrial goods to the EU. On the other hand, EU countries will import cheaper finished products thereby rendering the existing manufacturing industries uncompetitive, and hindering the country’s ongoing industrialisation programme. As a result, Nigeria will continue to be an importer of processed goods, an exporter of unprocessed raw materials, and will suffer revenue losses. The coalition of organised private sector groups led by MAN, estimated that the revenue losses due to the tariff removal will amount to US$1.3 trillion.

In an attempt to legitimise their stance, MAN enlisted the support of prominent national and international figures and provided them the platform to engage with other stakeholders. At the 2015 general meeting of MAN, Thabo Mbeki, South Africa’s former president, highlighted that signing the EPA had negative implications on the economies of African countries. Similarly, at the 2017 general meeting of MAN, Benjamin Mkapa, Tanzania’s former president stated that the Agreement is counterproductive. Nigeria’s former Minister of State for Finance, Ambassador Bashir Yuguda, in a discussion with MAN advised the government to reconsider its position towards the EPA.

The position of Nigeria’s organised private sector as well as the views of the prominent individuals were repeatedly published in major newspapers including The Guardian, Punch, Leadership and Thisday.  Particularly, NANTS ran a periodic publication on EPA-related issues in its Regional Trade Advocacy Series in one of Nigeria’s major newspapers – the Vanguard. Interviews with CSO groups were also aired on leading TV channels and radio stations such as the Nigerian Television Authority (NTA), African Independent Television (AIT), and Cool FM.

These aforementioned activities of MAN and NANTS resulted in a general disapproval of the EPA among industrialists and the working class. With the use of evidence-based studies, support from prominent individuals, and widespread dissemination activities, the civil society provided a clear and extensive review of the implications of signing the EPA, and narrowed the government’s options towards rejecting the Agreement.

Tying the two instances together

The two instances presents some notable parallels that can explain how political will for policy change can be built, as well as the critical role of CSOs. In both cases, the composition of the Alliance or coalition was a key determinant of the successful outcome. The size and diversity of the Alliance improved the collective capacity of the group in making their claims, exerting influence, and achieving their overall aim. The inclusion of a wide array of actors such as CSOs, research organisations, and international partners in the NTCA brought together champions that could spearhead the group’s agenda; experts to provide evidence-based analyses, and donors to fund the group’s activities. Similarly, the large size of MAN (over 2,000 members) provided clout for the favourable results.

Despite the fact that both groups possessed a strong drive towards a specific policy stance, their motives seemed to have differed considerably. While the position of NTCA seemed to be driven by genuine disapproval for incessant tobacco use and the negative health implications, the agitation from MAN and NANTS was largely driven by their fear of competition from imported goods if the EPA was signed. Thus the NTCA were mostly anti-tobacco advocates aiming for a tobacco-free society, while MAN and NANTS were essentially trying to protect themselves from potentially harmful competition.

In both cases, the use of credible evidence that was able to demonstrate the magnitude of improvement in public health in the case of tobacco taxation, and the public revenue losses in the case of the EPA, played a critical role as a tool to drive the advocacy efforts. CSEA, a partner of the NTCA, conducted a study on tobacco tax simulations which showed that increments in line with the WHO-recommended tobacco tax rate would result in substantial improvements in public health and government revenue. Likewise, research by the MAN-led coalition concluded that the revenue losses to the government as a result of signing the EPA would be significant. However, the robustness of both evidence differs slightly. While the tobacco tax simulation model was detailed and robust, and has been applied in several countries, the limited information on how MAN arrived at the size of revenue losses makes the quality of the evidence debatable.+

The advocacy and outreach mechanisms in both cases were similar. The choice of media channels was strategic, and dissemination activities were persistent. Leading newspapers, TV stations and radio channels were utilised on a regular basis to share pertinent information. The ability to use diverse media outlets to push their agenda and share the progress was instrumental in capturing the interest and the support of the public as well as highly-placed individuals. In addition, organising round table discussions were instrumental in keeping members of the alliance informed on recent events and future activities.

In sum, although there is no silver bullet in the approaches to building political will for policy change, these two instances have highlighted the importance of CSOs in building a strong and competent coalition, leveraging on evidence-based analyses, and undertaking rigorous dissemination activities in achieving successful outcomes.

concerns about an impending debt crisis in Africa are rising alongside the region’s growing debt levels. As of 2017, 19 African countries have exceeded the 60 percent debt-to-GDP threshold set by the African Monetary Co-operation Program (AMCP) for developing economies, while 24 countries have surpassed the 55 percent debt-to-GDP ratio suggested by the International Monetary Fund. Surpassing this threshold means that these countries are highly vulnerable to economic changes and their governments have a reduced ability to provide support to the economy in the event of a recession.

While debt is a global issue, Africa’s past debt crises have been devastating, creating the need to cautiously monitor this recent debt buildup. There are parallels between the present rising debt in Africa  and the Heavily Indebted Poor Countries (HIPC) initiative period that proffer solutions for prevent another crisis.

Figure 1: Government debt as a percent of GDP for African countries, 2017

Source: IMF, 2018. Regional Economic Outlook

 The events that led to HIPC and the Multilateral Debt Relief Initiative (MDRI) started in the 1960s from a public spending spree by recently independent countries to stimulate their economies through rapid investment in industry and infrastructure projects (Figure 2). Commodity booms and heavy use of external debt supported this spending as policy leaders relied on future export earnings and economic growth to improve the capacity to service the debt. Notably, those countries did not reduce expenditures during negative commodity shocks and instead took on more loans.Three key factors drove the subsequent debt crisis—the 1980s global recession, the rise in interest rates in developed countries, and a decline in real net capital inflows, which was largely due to the real negative interest rate in many countries.

As a result, the external debt-to-gross national income (GNI) ratio for the continent rose from 49 percent in 1980 to 104 percent in 1987. The World Bank’s Structural Adjustment Program attempted to tackle the problems by reducing fiscal deficits through expenditure cuts, but these austerity measures had severe, adverse impacts on social spending (and thus on livelihoods), and resulted in large current account deficits, astronomical inflation, and depressed currencies. This situation led the World Bank and the IMF to establish the HIPC initiative in 1996 to provide debt relief and reduce debt service payments of up to 80 percent for eligible countries.

Figure 2. Description of events leading to Africa’s indebtedness in the 1970s and early 1980s

In addition, in 2005 the IMF initiated the MDRI, which provided full debt relief on eligible debt. Under HIPC and MDRI, 36 countries, including 30 African ones, reached the completion point (the phase at which total debt relief is received) resulting in debt relief of $99 billion by the end of 2017. Between 1999 and 2008 alone, HIPC and MDRI reduced the external debt-to-GNI ratio for the region from 119 percent to 45 percent.

IS AFRICA HEADING BACK TO THE HIPC ERA?

Not quite…but the present composition of debt is worrisome.

The drivers of the present rising debt situation are similar to, but not the same as, that of the HIPC era (see Figure 3). In the wake of the 2007-2008 global financial crisis, governments deployed countercyclical spending to compensate for depressed private sector spending.

Another key driver was the huge rise in public expenditure on infrastructure—an effort to close the huge infrastructure gap (Africa needs to spend $93 billion annually from 2009 to 2020 to close its infrastructure gap).Of greatest magnitude was the 2014 negative commodity price shock, which dramatically reduced government revenues.

Figure 3. Description of events leading to the present debt situation

The aforementioned factors led to a decline in primary balance  from 3.9 percent of GDP between 2006 and 2008 to -6.9 percent of GDP by 2015 with countries borrowing excessively to meet public expenditure. The commodity price shock caused a depreciation in the exchange rate for several countries. Following the depreciation, foreign currency- denominated debt increased significantly.

A distinctive feature of the ongoing rising debt problem is the composition of debt. Countries are tilting away from official multilateral creditors who come with stringent conditions and toward non-concessional debt with relatively higher interest rates and lower maturities. This trend raises concerns around debt sustainability given the possibility of higher refinancing risks—particularly for commodity-backed loans in the event of a commodity price shock—and foreign exchange risks.

Furthermore, private non-guaranteed debt has grown: Between 2006 and 2017, private sector external loans tripled from $35 billion to $110 billion. This growth could result in a balance of payment problems as the private sector competes with the public sector for foreign exchange. Also, it may increase the government’s exposure to risks associated with contingent liabilities in the event of a default.

Another noteworthy trend is that countries witnessing a deepening of their financial markets are increasingly borrowing from their domestic debt market. South Africa, Kenya, and Nigeria, among others, have been issuing long-term bonds for large capital projects such as roads and hospitals. While tapping into the domestic debt market provides a sound alternative and does not expose the country to foreign exchange risk, it has the potential to crowd out private sector borrowing, thus hampering investment and output growth.

WHAT CAN BE DONE?

The rising debt burden across the continent is clearly a concern for borrowers, lenders, and the broader international community. Nevertheless, it is important to note that the present debt level is far below that of the HIPC era: In 2017, public debt as a percent of GDP in sub-Saharan Africa was 45.9 percent relative to the 117 percent external debt-to- GNI ratio of 1995. Also noteworthy is that sovereign debt financing is inevitable given that African countries budgetary resources are insufficient to finance their vast development agenda. Thus, in ensuring that all stakeholders become more prudent, we recommend the following:

1.   Better debt management

 Despite the spike in sovereign borrowing, sub-Saharan Africa’s performance in debt management has consistently declined from 3.34 in 2014 to 3.08 in 2017 (on a rating scale from 1 to 6). For those without, authorities need to design and implement formal and legal frameworks for debt management that stipulate borrowing targets and preferences for borrowing sources. Countries can tap into the support programs provided by the IMF and the World Bank. Also, establishing systems and processes to ensure up-to-date debt recording and timely debt service payments is necessary for maintaining accountability,

transparency, and sustainable debt levels. With the characteristics of debt changing significantly (e.g., the rise of nontraditional lenders, growth in domestic debt, an increase in private nonguaranteed debt), debt management authorities must utilize more sophisticated means to better analyze the costs and risks of these changes. Overall, these sound debt management practices should be extended to the subnational level and state-owned enterprises to ensure more comprehensive management.

2.   The issuance of “debt-management” financial instruments

Local authorities should issue debt instruments that can better manage the debt level. For instance, the issuance of the sukuk bond— Islamic bonds that allow investors to generate returns by having a share in the ownership of the asset linked to the investment rather than earning interest from the bond—that is tied to capital projects in Nigeria curtail the improper use of debt. Also, they should consider a state-contingent debt instrument that links debt service to predefined macroeconomic variables, such as GDP growth and changes in commodity prices. Thus, shocks that negatively impact fiscal space, such as economic recession, will not increase the debt service burden of the issuing country.

3.   More responsible lending

A debt crisis poses risks to borrowers and lenders alike. For this reason, lenders should focus on making more responsible lending decisions following due process in authorizing loans and possibly stipulating limits. Presently, the codes of conduct that address irresponsible lending such as the G-20’s Operational Guidelines for Sustainable Financing (2017) and the OECD’s Recommendation on Sustainable Lending Practices and Officially Supported Exports Credits (2018) are only binding on traditional creditors. A first step should be the development of new codes or a revision of existing ones to adjust to nontraditional actors. In addition, these codes should be enshrined in law so that participating countries adhere to them. Better coordination, more engagement, and increased information-sharing between traditional and nontraditional lenders is also crucial.

4.   Streamlining procedures 

The World Bank and IMF impose numerous, stringent, and time-consuming conditions on developing countries in order to access development finance, many of which advocate for controversial reforms such as privatization and trade liberalization policies that are not in accordance with the will of the developing country. Streamlining the lending process to reduce the number and scope of conditions to respect national sovereignty and reduce the burden associated with accessing loans is of the utmost importance. The World Bank could also increase the lending program to middle-income countries that still face development challenges like inequality, unplanned urbanization, and a weak private sector. Better engagement with these countries will enable them to consolidate their development gains and make substantial economic and social progress.

This article was first published on Brookings Institute Website