Supporting Decentralization in Sierra Leone: Reflections After the First Two Years of IRCBP Implementation Yongmei Zhou,

1. Supporting Decentralization in Sierra Leone: Reflections After the First Two Years of IRCBP ImplementationYongmei Zhou, AFTPR

2. Reflections two years after Board Date Q: Supporting devolution as entry point for governance reform: was it the right choice? A: Absolutely. Q: What pressure has devolution generated for other reforms? A: Budget reform: program budgeting Public service human resource management reform: pay reform and civil service/local government service linkage

3. Reflections two years after Board Date (2) Q: What worked well? • Using the Rapid Results Approach to jump start the devolution process: energize LGs, allow them to show results and establish credibility, use results to expand constituency for devolution. • Actively promote peer learning and competition among local councils. • Invest in MoF and support fiscal decentralization and LG FM capacity building. • Continuously monitor, evaluate, learn, adjust

4. Reflections two years after Board Date (3) Q: What hypotheses were confirmed by experience? • Given an opportunities and support, LGs can perform and develop capacity. • Temptation and pressure for corruption is high. Both central government monitoring (“roaming internal audit”) and citizen monitoring are needed. Q: What hypotheses were challenged by experience? • Service delivery improvement and transparency will automatically translate into voluntary tax compliance and civic participation in local governance.

5. Reflections two years after Board Date (3) Q: What were our blind spots? • Role of traditional authority and how it would relate to the newly elected local council. Q: What would we have done or will we do differently? • Recruit qualified (or qualifying) professionals with adequate pay (and subsidies for professional qualifications) rather than train unqualified civil servants • Early investment in building institutionalized capacity to build LGs capacity • Communicate, communicate, communicate

6. Causes of conflict • Post-independence deterioration in governance • Military government dissolved local councils in 1972 • Centralization of power, resources and corruption in Freetown • Rural population deprived of economic opportunities, education, political participation • Marginalization of youth from decision-making Civil war (1991-2002) displaced half of population (2 m), caused 20,000 death, and destroyed infrastructure and social capital

7. Extreme poverty • Bottom in UN HDI ranking • Infant mortality: 166 out of 1000; SSA average: 101; world average 57. • Under-5 mortality: 284 out of 1000; SSA average: 171; world average 86. • Life expectancy 37; SSA average: 46; world average: 67. • Child immunization rate (measle): 73% of children between 12-23 months old; SSA average: 61%; world average 77%. • Adult literacy: 36%; SSA average: 71%; world average 80%. • 70% population below national poverty line (just under $1): 15% in Freetown, 79% rest of country

9. Many rural communities are isolated

10. Good Governance has many entry points Citizens/Firms • Political Accountability • Political competition, broad-based political parties • Transparency & regulation of party financing • Disclosure of parliamentary votes • Effective Public Sector Management • Ethical leadership: asset declaration, conflict of interest rules • Cross-cutting public management systems: meritocracy, public finance, procurement • Service delivery and regulatory agencies in sectors • Civil Society & Media • Freedom of press, FOI • Civil society watchdogs • Report cards, client surveys • Formal Oversight Institutions • Independent, effective judiciary • Legislative oversight (PACs, PECs) • Independent oversight institutions (SAI) • Global initiatives: UN, OECD Convention, anti-money laundering • Private Sector Interface • Streamlined regulation • Public-private dialogue • Extractive Industry Transparency • Corporate governance • Collective business associations Citizens/Firms Citizens/Firms • Decentralization and Local Participation • Decentralization with accountability • Community Driven Development (CDD) • Oversight by parent-teacher associations & user groups • Beneficiary participation in projects Citizens/Firms

11. Choice #1: Scope of IRCBP • Focus on supporting devolution and empowerment, and public financial management reform and NOT civil service reform and legal and judicial reform. • Why? • Political will and public support • Tackles post-conflict governance reform priorities • Political sustainability • MoF frustration with low effectiveness of spending and willing to support devolution

12. Devolution and empowerment tackles post-conflict governance reform priorities • Reducing conflict by opening up space for political participation and improving democratic accountability of the state to citizenry • Restore trust in government • Rebuild social capital in communities • Address issues of social exclusion • Address urgent needs for recovery and reconstruction

13. Devolution will sustain and deepen wider governance reform • Empowered local politicians will sustain devolution process • Local political markets allow for meaningful alternatives to emerge for future national elections • Spread culture of transparency and accountability from bottom up • Fiscal decentralization forces restructuring of ministries

14. MoF frustration with low effectiveness of public spending -- education • PETS 2001: only 55% school-subsidy grants accounted for by schools. Grants payment was later outsourced to KPMG (10% commission). PETS 2002 showed 97% accounted for. • PETS 2002: 72% teaching and learning materials reached the intended schools from District Edu Offices, arriving 170 days later than contracted. • PETS 2003: 60% school furniture reached the intended schools. • IRCBP baseline household survey Mar 2005: 58% of people feel that LCs, not the central government, should run the school system.

15. MoF frustration with low effectiveness of public spending -- health • PETS 2002: less than 10% of all essential drugs could be accounted for by District Medical Officers; less than 5% of all essential drugs were accounted for by periphery health units. • PETS 2003: • 97% transfer from CMS to MOs • 70% transfer CMS to DMOs can be accounted for • 20% PHUs had zero receipt of drugs

16. MoF frustration with low effectiveness of public spending -- food security In 2003 • 2.67 billion leons used for procurement of 66,226 bushels of seed rice by MAFFS. • Contract awarded to: OSKA Agencies, MARIKA Enterprises, MARTINVEST Trading Ltd. • Estimated total receipt by all Farmers’ Associations nationwide = 72.6% MAFFS transfer • Receipt of seed rice: 8% before planting season; 35% during planting season; 57% after planting season

17. Fiscal decentralization to improve effectiveness of public spending • Give resources to those accountable to local communities for service delivery • How to make sure students receive the number of books according to national policy, and on time? • How to make sure drugs allocated for PHUs reach PHUs? • How to motivate and empower teachers/nurses/extension workers to provide quality services the citizens? • Allow LCs autonomy in deciding local priorities: • Which drugs do PHUs need for their population group? • Which schools need furniture? • When do schools need teaching and learning materials? How much do they need? • Which farmer groups need extension services?

18. Legal framework for decentralization: key features of Local Government Act 2004 • Partisan election of local councils; 20% of Paramount Chiefs in each locality will be un-elected councilors • Devolution of responsibilities (primary edu, primary health, agric extension, feeder roads maintenance, etc) and revenue authorities to local councils during 2004-2008 • Local councils have autonomy in HRM and FM under guidelines • Inter-governmental transfers based on transparent formulae and principle of equity Require transparency and accountability in council operation • Ward Development Committees as sub-district structures • Transition arrangements

19. Sequencing of devolution program • Jun-Dec04: grace period for implementing functional devolution • Build basic LG capacity to make collective decisions and utilize resources • Announce phases of functional devolution • Design fiscal decentralization strategy and sectoral devolution plans • Jan05-May08: transition period for implementing functional devolution • Gradual transfer of service delivery responsibilities • Building LG capacity • Intensive M&E to identify improvement in policy and implementation • Jun08 & beyond: sustainability phase

20. Conditions for effective local governance Central government enabling conditions (allowing fiscal and administrative autonomy, adequate and predictable transfers, refrain from political interference) Local government authority, autonomy, capacity Citizen engagement in local government affairs, open and accountable local political process Community collective action

21. IRCBP contribution towards inclusive, effective and accountable local governance Project development objective: by 2008, out of 19 elected local councils • All 19 LCs should be able to make development plans that respond to local priorities through a participatory process. • At least 14 LCs should be able to make budget consistent with Section 67 of Local Government Act 2004. • At least 14 should be able to meet the transparency and the financial management accountability requirement as per Local Government Act 2004 (Section 107, 81, 105) • At least 14 LCs should be able to complete the projects submitted in previous year's work plan • All 19 LCs should be able to maintain coverage and quality of services devolved to them at the levels of the year before devolution. If we were to start over again, we would add: • Education level of elected councilors as a proxy of interest among competent citizens to participate in local governance. • Name recognition of elected councilor by his/her constituents as a proxy for citizen interest in local government and councilors reach to citizens.

22. Complex work streams to achieve successful devolution: where does one start? Strengthen GoSL capacity to design/implement decentralization, incl. fiscal and administrative decentralization Invest in local government offices, equipment, furniture Project Components Strengthen LG capacity in participatory planning revenue mobilization financial management project management M&E M&E of decentralization Future June ‘04 Inclusive, effective, accountable local governance

23. Start the devolution process with local council Rapid Results Initiatives • Immediately after LC elections, central government challenged and supported each LC to identify, design, and implement one Rapid Result Initiative that was • Urgent and compelling • Visible – people will notice the difference • Can be translated into real impact in 100 days • MLGCD Decentralization Secretariat provided coaches • MoF disbursed Local Government Development Grant four months after elections

24. Using RRIs to start a virtuous cycle of improving local governance

25. And preventing a vicious cycle of deteriorating local governance

26. LCs did not disappoint • LCs RRIs tackled diverse development issues: water, sanitation, feeder roads, bridges, traffic, rice production, post-harvest loss. Examples of results: • Travel time between Sewafe and Peya of Nimiyama Chiefdom of Kono District reduced from 1hr to 15 minutes and transportation cost reduced from Le 5,000 ($1.75) to Le 2,000 (70 cents). • Increase the availability of high-yield quick-harvest Inner Valley Swamp Rice seeds in Pujehun Districtby 4,000 bushels within 90 days • Ensure the availability of safe and portable drinking water in the mains and laterals and 25 public taps in the Moyamba township within 90 days. • Total volume of Garbage in two lorry parks and two markets in Kenema Township reduced by 90% within 95 days. • Cheaper and faster than ministry projects

27. Are purse-holders aware of LG achievement?

28. Communication for expanding support for devolution • Talking Drum video on RRIs: President called MLGCD • Bintumani Devolution Workshop (Jun 2005): RRIs success strengthened LCs bargaining power in devolution negotiations with ministries • Moyamba visit triggered discussion with SALWACO about rural water project • DfID and EU: $25m trust fund to IDA to top up IRCBP, incl. block grant for LGs

29. Country portfolio adjustment to support decentralization since 2004 • IRCBP: design of a new inter-governmental fiscal system, partial financing of the Local Government Development Grant, nation-wide LG capacity building • GoBifo (CDD project, effective after LG election): experimenting village-level participatory decision-making, civic engagement in local governance, LG block grants to villages • NaCSA (CDD project, effective before LG election): the feeder road component has been adjusted to provide direct financing to LGs and strengthen LGs capacity to manage public works projects

30. Country portfolio adjustment to support decentralization since 2004 (cont.) • Education, Health (effective before LG election): mid-term review adopts changes to give LGs explicit roles in contract management, strengthens support to build LG capacity for service delivery • HIV projects (effective before LG election): considering decentralized HIV prevention and treatment program • Rural water and solid waste management project (effective election of LGs): ongoing negotiation for potential restructuring.

31. RRA process forces integration among work streams and adds urgency Strengthen GoSL capacity to design/implement decentralization, incl. fiscal decentralization Invest in local government offices, equipment, communications Project Components Strengthen LG capacity in participatory planning revenue mobilization financial management project management M&E M&E of decentralization Future June ‘04 Ensure access to safe drinking water in Moyamba Township in 100 days Inclusive, effective, accountable local governance Goal of Moyamba RRI Team

32. Financing of RRIs Tested Inter-Governmental Transfer System • Local Government Development Grant, as part of inter-government transfer system, provides block grants to LGs for discretionary (not necessarily investment) projects • LGDG allocation formula based on equity principle: infrastructure needs, other financing available • Minimum conditions for access: transparency and accountability requirements of LG Act 2004 • All LCs have bank accounts now, although some far from banks • Poor communications infrastructure posing problems • LGDG as a credible GoSL transfer system for other financiers to use in future

33. LGDG eligibility gives urgency to LG financial management capacity building • MoF PFM Reform Unit and Local Government Finance Department provide training, hands-on support to new FM staff in LGs: basic bookkeeping and accounting, budgeting, procurement, revenue mobilization, computer literacy • Uniform Chart of Accounts applied to all levels of government

34. RRIs laying foundation for a results-based LG management system • LCs: multiple RRIs in the context of newly prepared Local Council Development Plans. • RRA as a management tool to strengthen performance accountability between local politicians (Committees as Strategic Leader) and administrative/technical staff (line functionaries as Team Leader) upon devolution of responsibilities.

35. 2nd Round of RRIs • RRI Workshop provided cross-learning opportunities and created competition among LGs. • 2nd round of RRIs financed by LGDG continues to tackle diverse development issues: water, sanitation, feeder roads, raft, culvert, bridges, market, lorry park, rice production, post-harvest loss, community park, vocational skills training center, school furniture. • Financial management malpractice was found in two LGs. LGDG suspended till corrective actions are taken.

36. Sector RRIs to give credibility to sector devolution • Newly devolved sector staff performing functions related to primary health, crops/forestry/livestock, DEC schools received orientation of the Rapid Results Approach. • RRIs developed by sector teams, e.g., increasing Animal Health Services from 10% to 40% within Moyamba District in 70 days. • Local council sector committees would monitor the progress of the sector RRIs: accountability and partnership between politicians and professionals. • Each RRI team would include members from beneficiary communities

37. Is delivery and transparency enough? Moyamba water projects value for money • RRI in 2004 ($26,750): Rehabilitation of pipe borne water system and 25 stand pipes • RRI in 2005 ($33,997): Extend water system and add 33 new stand pipes. But why are people not paying water charges?

38. Do citizens know what LGs are doing? And does consent translate into voluntary tax compliance and civic activism?

40. Revenue performance varies across LCs

42. Communication objective: Increase trust and confidence of communities in LCs (to use taxes to improve service delivery)

43. Performance comparison, peer learning, and political competition • Comparative performance data as • Feedback • Stimulant for peer learning • Trigger for competition • Need good communication programs to disseminate comparative info to create political competition and civic activism

44. Compare local revenue performance and learn from peersData source: MoF (Mar 2006)

45. Compare procurement results

46. Comparing financial management capacity

47. Local Government Development Grant • Provide block grant to LGs for financing development projects, as part of IGT • Access rules focus on transparency and accountability requirements of LG Act 2004 • Encourage transparent and accountable governance culture from the very start! • Address fiduciary concerns of IDA • Give incentive to develop management skills • Allocation of LGDG among LGs based on equity criteria, infrastructure needs, other financing available

48. Evaluating Impact of Devolution and Empowerment Program • Is devolution bringing state closer to people? And to whom first? • Does devolution improve access to and quality of services? • Does improvement in public services increase citizens’ trust in state and improvement in tax compliance? • What are determinants of reelection of local councilors? • Do communities that experience with more inclusive, transparent, and accountable intra-community governance hold their local governments to similar standards?

49. Access to primary schools: starting point

50. Access to primary health care : starting point