Strategic Objective 3: To strengthen inclusive, transparent and accountable public debt borrowing and loan contraction processes.
From the previous researches done by AFRODAD, it was discovered that in many African countries, loan contraction and debt management is the sole responsibility of the Minister/Ministry of Finance without any clear indication of the need for Parliament approval to be sought before any loan is acquired. In the cases where the legal frameworks are clear on the need for parliament approval to be sought first, there is a common concern by the parliamentarians on the late submissions of the respective loan documents resulting in them having insufficient time to thoroughly review the documentation. In some instances there is insufficient background documentation and sometimes key information will be missing which limit the Legislature’s critical analysis of the submitted documents. In this view, the case of rubber stamping of loan documents is still prevalent. There is also further concern on the lack of effective monitoring and evaluation on the performance of loan funded projects, largely characterized by slow implementation and lack of project reporting by the implementing agencies. Lack of reference to the civil society’s role in the over-arching legal and institutional frameworks and guidelines for debt management is also common in most countries’ frameworks.
In light of this AFRODAD continues to work on loan contraction processes and to monitor how they are procured by government. It analyses the legal and institutional framework involved in the loan contraction process and the role of different stakeholders at a national level and which should be seen to be transparent, accountable, participatory and inclusive.
Despite this progress, there is currently still no scrutiny of the likely gender consequences of all the proposed prior actions. When external funds are needed quickly to fill a financing gap, borrowing countries may sign the loans agreeing to these prior conditions. Moreover, they may also implement them in order not to delay the disbursement of a loan, which could result in an additional financial cost in terms of having to pay commitment fees on unutilised loans. The consequences of agreeing to and implementing prior conditions without considering their gender implications can be detrimental for gender equality.