In Liberia, World Bank Support for Governance Helps a Nation Rebuild

February 16, 2010

  • Liberia is focused on growing its economy away from extractive industries
  • The IDA-supported Economic Governance and Institution Reform Project is helping the country focus on rebuilding institutions and building transparency and accountability
  • Building capacity and accounting for resources are two governance initiatives under-way

MONROVIA, February 16, 2010 – From 1990 to 2003, Liberia suffered a brutal civil war that forced the country’s citizens from their homes and left much of the capital destroyed. Today, the war has ended, the market along Water Street is teeming with people, classes are in session at the University of Liberia, the Central Bank has reopened for business and the process of rebuilding a nation has begun.

“Liberia has traditionally been dependent on extractive industries which helped fuel the civil war,” says Emmanuel Doe Fiadzo, a senior economist at the World Bank in Monrovia. “Now, post conflict, the country is trying to rebuild and move away from dependence on those industries.”

In order to do so, Liberia is focused on growing its economy away from extractive industries and rebuilding its institutions and systems in the public financial management area, with an eye on building transparency and accountability.

Accountability for Mining Resources

One way, is through the Liberia Extractive Industries Transparency Initiative (LEITI), a program supported by the World Bank’s International Development Association (IDA) through the Liberia Economic Governance and Institution Reform Project (EGIRP). Under the auspices of the Ministry of Finance and Land Mines and the Ministry of Energy, LEITI gathers data on revenue from the country’s extractive industries – diamonds, gold, iron ore and rubber – and, in conjunction with civil society organizations, disseminates the information to the public, including to communities where mining activities take place.

“Before the project there was no communication to the traditional people,” said Setta Fofana Saah, County Coordinator for the National Traditional Council, a civil society organization made up of traditional chiefs, which represents communities in Liberia’s 15 counties. “But now we are getting small, small information.”

“Before you couldn’t ask government how much they collect,” Saah added. “But now you can ask the chief and the chief can ask.”

LEITI provides the head of the National Traditional Council, Chief Zanzan Karwor, with detailed audit reports of revenues from the mining industry. Karwor, along with 15 other traditional chiefs, uses the reports to inform his constituents.

“The chiefs are responsible for the traditional people,” says Zanzan. “The chief’s role is to disseminate the information of the LEITI. When we inform [the traditional people] we explain it to them. We educate them about what happens.”

The initiative has helped earn Liberia an award from the world Extractive Industries Transparency Initiative secretariat in Oslo, Norway, for rapid progress toward compliance with their guidelines. Among them,  “regular publication of all material oil, gas and mining payments by companies to governments (‘payments’) and all material revenues received by governments from oil, gas and mining companies (‘revenues’) to a wide audience in a publicly accessible, comprehensive and comprehensible manner.”

Enhancing Liberia’s Human Resources

Another component of Liberia’s governance reform initiative is support for the Liberian General Auditing Commission (GAC). Prior to the election of the new government in 2005, GAC, mandated to monitor government expenditure, reported to the executive branch of the government, the key body it was supposed to monitor.  In 2005, the new legislature passed a law making the GAC an independent entity.

“We have had to practically build everything from scratch,” says John Morlu, a U.S.-educated economist, financial analyst and auditor who, for the past two and a half years, has served as Liberia’s Auditor General and head of GAC.

 According to Morlu, staff capacity has been a key problem. “We have very smart people in Liberia but they have been at war so their management skills are lacking.”

Through EGIRP, the World Bank has provided GAC $1.2 million for building the capacity of its staff and for logistical support including computers and other equipment. The project has provided funding for the recruitment and training of three principal auditors and support staff to assist Morlu. In September 2008, GAC produced Liberia’s first audit in 25 years. Approved by the Legislature, published in national and local newspapers and sent to a multitude of NGOs and Civil Society Organizations, the report, according to Morlu, boosted Liberia’s ability to enhance transparency.

“Corruption is probably our biggest challenge in Liberia,” he said. “The largest effort in fighting corruption is producing an audit report and publishing it.” For the first time, Morlu said, Liberians are discussing the issues of reconciling Bank statements.

The Tools for Lawmaking

The Liberia Institute of Public Administration (LIPA) is another organization receiving funding through the IDA in support of the country’s governance and accountability initiatives. The Administration conducts daily training programs for civil servants, administers examinations and provides ongoing specialized training for Liberia’s Legislature.

“The idea is to adopt a two-pronged approach that seeks in the short-term to meet the capacity challenges of public institutions, but in the long-term to build the capacity of LIPA itself to continue the effort even as World Bank funding stops,” said Fiadzo, the EGIRP project leader.

Dr. Harold Monger heads LIPA and works directly with trainees, including legislators.

 “Most of the members are first timers in government,” Monger says. “Most of [them] had no experience which is a fundamental problem.”

As part of the training program and in an effort to build South-South cooperation, LIPA has turned to the Ghanaian Legislature for support. In 2006, the administration took the members of Liberian Legislature to Ghana where a joint legislative session was held. The Liberian legislators also traveled to Athens and Atlanta, Georgia, in 2008, for an intense two-week workshop in public financial management related issues, including the oversight function of legislatures.

Emmanuel Nuquay, a legislator representing Margibi County just outside of Monrovia, participated in the trainings.

“The training was intended to mold our minds as lawmakers,” he said. “There were discussions about what to expect as lawmakers, what to do, how to prioritize the interests of the people when practicing law.”

“We had the opportunity to meet very experienced people who shared their life experience with us and the system of government,” Nuquay added. “They also reinvigorated our motivation to work.”

The EGIRP is extremely important to the lawmaking function of the country, according to Nuquay. “Some of the things we thought we knew, we realized there that we didn’t know them, especially when we compare the systems of government here and in the United States…we realized there was a need to do more.”

World Bank Support

The Liberian Ministry of Finance is the main recipient of the EGIRP grant from the World Bank. The project began in May 2008 with the following objective: to improve efficiency and transparency in managing public financial and human resources. Project components include, strengthening public financial management and supporting the Civil Service Reform Program.

“The capacity of the public sector to deliver basic public services has deteriorated markedly, as a result of a collapse in government revenues, loss of human resources from the public service and a breakdown of systems of government,” said Fiadzo.