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Economic Sabotage: The Impact of Good Governance on Sustainable Development
By Sadik Warfa  
Friday July 21, 2023

The issue of governance has recently gained significant attention in both local and international conversations. Governments are now reconsidering their governance approaches, past and present, and how they will influence the future of their countries. Development literature increasingly emphasizes the importance of good governance while regarding poor governance as a major cause of societal backwardness, which can be referred to as economic sabotage in this article. International donors and financial institutions now use good governance as a yardstick to determine a country's eligibility for loans and grants. This article aims to explain the effect of good governance on the sustainability of a society's development projects and shed light on the consequences of poor governance.

One of the key issues affecting governance in Somalia is the judiciary. While the president, Hassan Sheikh Mohamud, is making considerable improvements in matters concerning the constitution, it is vital to finalize it, especially considering and emulating Article 106, which affirms the independence of the judiciary from other legislative and executive branches, and Article 109, which proposes disciplinary regulations applicable to members of the judiciary service commission to ensure their performance. An effective judiciary can help implement the rule of law, protect people's rights, resolve disputes, enhance accountability, and build trust between the people and the government. The previous administration introduced the Judicial Commission, and it received approval from the House of the People. However, the Upper House (Senate) did not take part in the decision-making process. However, with a new administration and objectives, I believe that introducing a Judicial commission, backed by the independence of the Judiciary, will play a vital role in ensuring all legal decisions in the country are free from external influence.

Governance, simply put, is the way a government or institution is organized and regulated by inclusive policies and laws. When a public institution conducts public affairs with transparency, accountability, public participation, and responsiveness to the needs of the people in accordance with the rule of law, it is considered to have good governance. Poor governance occurs when these attributes are not exhibited, hindering the development of a society in most cases. Governance plays a vital role in shaping how societies and organizations are controlled, and it significantly influences the policies, laws, and decision-making procedures that impact individuals and communities.

The prospects for good governance depend on established structures and the economic resources available for ensuring governance. These governance structures can be centralized or decentralized, each having its pros and cons. Decentralization of power, by empowering people in local communities, can contribute to more sustainable development. It brings services and operations closer to the people, encouraging the adoption of innovations by the central government. This can be observed in the successful devolution of some government functions in Kenya, such as agriculture, environmental protection, health, maintenance of public works and highways, social welfare, and tourism. This has given powers of self-governance to the people and enhanced their participation in decision-making processes without compromising the ability of future generations to meet their own needs.

Good governance also depends on the installation of functional institutions devoid of corruption, bureaucratic efficiency, and inefficient laws that undermine the capacity of those bodies to facilitate sustainable development projects. With the annual inflation rate across the East African region at an average of 24.2 per cent, any government must enforce all-inclusive laws that will cushion its citizenry against the ravages of demand-pull and cost-push, which are key drivers of inflation. Kenya, for example, is dealing with inflation through increases in taxes like income tax and VAT and is also trying to reduce government expenditure. This raft of measures is meant to improve the administration's state of the budget and reduce the growth of aggregate demand in the economy. Tanzania's inflation rate is, however, still within the target range of 3.0%-5.0% over the medium term included in the country's development plan. This can be attributed to proper governance, which involves putting structural and monetary factors at the center of sustainability measures.

Even as governments strive to restructure various administrative functions to foster sustainable development, the process is not without its fair share of challenges. These challenges include but are not limited to, global inflation, pandemics such as Covid-19, climate change, and other unforeseen occurrences, which have slowed down economic growth. To tackle the challenges posed by these issues, I, serving as the Minister of Labour and Social Affairs, took the initiative to introduce the Baxnaano program. This program proved to be instrumental in providing vital assistance to vulnerable individuals throughout the country during the difficult times of the Covid-19 pandemic. The program's main goal was to provide cash transfers to vulnerable households to protect them against food insecurity. This program provided a platform for the Federal government to offer a social safety net to vulnerable households in the country. More than one million people benefited from the program, and it is commendable that the current regime has committed to the program and continues to support more than one million vulnerable households in the country. The Baxnaano program is an example of effective governance that addresses the challenges facing governance today.

The continuous rise in the prices of goods and services has made it difficult for policymakers to control economic stability. Countries have been forced to impose heavy taxes on their citizens to cushion the economy against possible economic slowdowns. For countries like Somalia, which depends on the importation of goods for domestic consumption, global inflation has made life unbearable for the average citizen. It is during such times that a country's governance is put to the test to assess whether it can respond to the dire needs of its citizens. With countries still recovering from the ravages of Covid-19, food insecurity remains a major challenge as households struggle to put food on the table. Policies that ensure equitable distribution of food and other basic needs would demonstrate the effectiveness of governance in addressing the people's needs.

Additionally, sixty percent of the population in Somalia lives in rural areas, experiencing severe climate changes that impact the livelihoods of many. This situation negatively impacts governance, which requires collaboration to develop policies that enhance mitigation and adaptation strategies. Countries such as Ecuador and Costa Rica are tackling this issue with innovative approaches that have aided in the conservation of the environment. These countries have successfully introduced payment for ecosystem services and incentives for people who conserve forests on their properties, providing employment opportunities for the youth and property owners. Kenya's President William Ruto recently hinted at starting a similar system that pays Kenyans who plant trees on their farms in the near future. If other African countries were to emulate such systems, it could gradually curb impending climate change disasters.

As Somalia undergoes a transition with a new government, it is evident that sustainable development requires good policies and effective institutions conducive to good governance, the government of Somalia has given the people hope that great things can and will be achieved. Other Countries such as Uganda, for example, are building sustainability programs by exploring new markets in African countries besides Kenya; supported by good laws, this diversification of trade options will expand their export opportunities beyond Kenya. As a signatory to several bilateral trade agreements, Rwanda too has presented many opportunities for traders in the country. With inflation projected to fall a few points deep because of a drop in imported inflation, the country has mitigated these effects by introducing fertilizer and public transport subsidies to prevent a spiral in the cost of living.

The government is now one year and has a three-year mandate left. During this time, the government has made significant strides towards achieving economic growth, the fight against the Al-Shabaab, and political stability. Additionally, President Mohamoud's commitment to joining the East African Community holds great promise for Somalia, particularly in enhancing security, strengthening governance and transparency, and fostering economic growth. Also, to leave a lasting legacy, the president should prioritize the establishment of a robust and independent judiciary that will effectively check and balance the legislature and the executive branch. By doing so, the government can restore the confidence of the Somali people and pave the way for a peaceful and prosperous future for the country.

Sadik Warfa
Served as Minister of Labour of the Federal Republic of Somalia,  Represented Mudug Constituency Federal Parliament 2016-2022


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