FREETOWN, Sep 2 (IPS) - Sierra Leone has been a major recipient of foreign aid since the end of a devastating 11-year civil war in 2002. But government, donors and citizens are all questioning how effectively this aid is being used.

The West African country, battered by years of civil strife and a plummeting economy, relies heavily on bilateral and multilateral aid — according to the ministry of finance, 44 percent of the national budget comes from external assistance.

Allegations of misappropriation of donor funds, both by government actors and NGOs threatens this inflow. One of the government’s principal partners, the British Department for International Development, withheld aid in protest against such anomalies, for most of 2007 and early 2008.

The lack of accountability and coordination is felt by Sierra Leone’s most vulnerable people. The country’s educational and health sectors are in dire straits, despite being priority areas for both government and NGOs.

The government is currently conducting a verification of to weed out so-called “ghost” teachers and non-existent schools that account of misappropriation of donor as well as state funds.

At the end of the civil war, dozens of NGOs sprang up, many lacking adequate monitoring mechanisms or accountability. The questionable performance of some of these NGOs led the government to review its NGO policy. The Sierra Leone Association of Non-Governmental Organisations also introduced new oversight and monitoring mechanisms.

Fatmata Kamara, 23, is a double amputee who spends her time daily begging on the streets of Freetown, the country’s capital. She lost both her legs in January 1999 when rebels of the Revolutionary United Front (RUF) invaded Freetown and committed horrific atrocities against civilians, including mass amputations.

“Before my amputation, I was being trained as a hair-dresser and was hoping that after graduation, I would open a salon of my own and train more youngsters,” Fatmata says.

She has not yet given up that hope. In her small village of Kosso on the outskirts of Freetown, where she resides, Fatmata solicits clients who pay small fees to do their hair, money she uses to supplement income — normally not enough — she accrues from begging.

“This is what I use to take care of myself, two children and the kid who moves me around. It is really difficult and all my hopes that I will be assisted by philanthropists to set up my own business have been dashed.”

Apart from tiny mud houses for a few amputees in Kosso, built by the NGO Norwegian Refugee Council, the bulk of them rely on begging to upkeep their families. It is the case of the amputees, for instance, that the effectiveness of aid is been questioned, even by implementing partners.

John Caulker, the executive director Forum of Conscience, which works to support the rule of law and respect for human rights, told IPS: “With the lack of proper accountability and monitoring of donor funds, a lot of the NGOs folded up as donors quickly withdrew funding for a good number of these NGOs some of which were described here as “briefcase NGOs” because they were centred around one individuals or a few with just the motive to make quick cash.”

The Paris Declaration commits governments and donors to meeting certain standards of public financial management, open procurement policies and transparent assessment of the effectiveness of aid.

Sierra Leone’s government has set up a public procurement unit and established regional budget oversight committees to improve aid distribution and effectiveness. The impact of these measures is yet to be fully measured, with a change in government barely a year ago.

However, according to Tennyson Williams, the country director of international anti-poverty group ActionAid, the current aid architecture as a whole needs revamping if it is to have a positive impact on the recipient nation.

“The aid packages come along with conditionalities such as ensuring the recipient — government — gets 37 percent for its reserves, another 37 percent to finance its debts and only at liberty to spend just 26 percent of the total package. This does not give the necessary flexibility for the government to spend,” Williams laments. According to him, donors emphasise macro-economic stability at the expense of social stability.

Williams says that with limited spending, the recipient falls short of delivering the targeted services and this, he says, could lead to unrest and social strife. He also questions donors’ insistence on bringing in technical experts for implementation of projects, and asks: “Has technical assistance done us any good?”

Williams also believes the sizable chunk of funds going to servicing the experts eats into the value of the package itself, sometimes rendering projects a disaster.

The problem here, though, is that the government lacks both the technical teams and the necessary credibility to make aid effective. Corruption in public offices has seen the misappropriation of foreign aid to the extent that donors insist on flying in their own personnel to help with implementation.

Matthiew Dingie, the director of budget at the ministry of finance, acknowledges that resources generated domestically are not enough the run the economy and state machinery. Nonetheless, he blames the conditionalities and benchmarks set by the donors for the ineffectiveness of aid.

“The major problem is the timeliness for disbursement of the aid package. For instance, if money meant for infrastructure such as construction of roads comes in at the rainy season, work won’t go ahead,” he says. This timeliness, he opines, impacts negatively on distribution.

Dingie adds that the aid received as budgetary support is most effective because it comes straight into the government’s coffers and can be spent with flexibility.

“The government will have a free hand to spend it more effectively in areas like health, education and other social services. Where I see the ineffectiveness of aid is the bilateral disbursement. Here, the government does not have control of the recipients who are mostly NGOs and UN agencies, a situation that sometimes leads to duplication in distribution,” Dingie adds.

His argument is that the government may have budgeted for a specific project, something the NGOs may also have received funding for, but they proceed with their work independently of the government.

The government established the Development Assistance Coordination Office in 2004 with the task of tracking development assistance coming into the country from various sources, both bilateral and multilateral as well as through NGOs. But this too has been less than effective because of the lack of transparency, reporting and capacity at both the donor and government level.

The government has also set up district budgetary oversight committees throughout the country with the task of monitoring projects. Dingie says this is working. “This is the best way of tracking anomalies and ensuring projects are thoroughly implemented.”

However development economist Jacob Saffa says a lot more needs to be done. “Development assistance has to be well coordinated to ensure equity of distribution among sectors and regions and proper monitoring mechanisms put in place.”

Saffa agrees that “channeling pledged resources through NGOs and UN agencies without the knowledge of the recipient country is problematic because the bilateral players decide where to spend and on which activity.” Saffa also questions the wisdom behind the “flying in of experts” which he says is unacceptable and “must be resisted” by recipient countries.

He also urges that the government must have in offices strong technocrats capable of articulating the views of the government, both at the level of negotiating aid and its implementation, instead of relying exclusively on “imported experts.”

Saffa concludes by saying that the monitoring of development aid continues to be a major challenge for Sierra Leone and that a thorough framework of monitoring both recurrent and development activities must be put in place. “Strong institutions for such monitoring must be set up at district and national levels and citizens allowed to report on project effectiveness in their communities.”

The real failures — and some successes — of aid effectiveness are the subject of a major gathering of donors, governments and civil society organisations taking place in Accra, Ghana at the beginning of September.

The High Level Forum on Aid Effectiveness aims to bring new voices into a review of how aid is managed, and to sketch out a course for greater transparency, accountability and ultimately impact on the lives of the world’s poor.

FREETOWN (AFP) — The Environmental Forum for Action, one of the most influential activist groups in Sierra Leone, called Monday on the government to reimpose the ban on timber exports that was lifted in July.

“With less than five percent of forested areas left in the country, the decision by the minister of forestry (Sam Sesay) to lift the ban will be disastrous for the environment and will lead to severe scarcity of timber in the local market,” it said in a statement to local news media.

It said the decision “threatens Sierra Leone’s rich biodiversity of 3,000 plants, 74 of which are endemic, and several species of mammals, reptiles and birds which can never be replaced”.

It went on to express “concern over developments in the logging industry,” citing the presence in Sierra Leone of Taakor Tropical Hardwoods, a global timber operator, “despite the small area of forest remaining in the country”.

Chinese and Southeast Asian outfits dominate the logging market in the west African state, squeezing out small-scale operators to an extent that has led to constant friction, environmental observers said.

Although timber export data is disputed, trade ministry figures show that a total of 20,000,000 dollars worth of timber was exported to East Asia in 2007.

Environmental bodies contend that twice that amount has been smuggled into neighbouring Guinea and Liberia and then re-exported.

After years of brutal civil war and foreign donations, a former aid worker is trying a new approach at national regeneration

Like many of the foreigners in Freetown, Niall O’Cathasaigh came here to do good.

Aged 28 and with an accountancy background, he spent 12 months running the finances of an Irish aid agency. It was a good year, spent helping Sierra Leone to emerge from the ruins of a decade-long civil war.

The community of aid workers, peacekeepers, unemployed mercenaries and eccentric expatriates was vibrant and the bars that dot the sandy beachfront at Lumley were filled with beer, grilled fish and music.

He loved the war-battered tropical paradise, but Mr O’Cathasaigh was not impressed with his first taste of the development industry. “I quickly saw the limitations of the way development is done. It creates all the wrong incentives for the beneficiaries and for the donors,” he says.

Three years later and Mr O’Cathasaigh is still in Freetown, but as a private equity investor with £3 million raised from hedge funds and private investors in Britain. With his business partner Tom Cairnes, 29, he has set up ManoCap to make money from helping Sierra Leone to develop.

“We’re not on a development crusade, this is our careers,” Mr O’Cathasaigh says bluntly.

He will invest about £250,000 in different businesses run by entrepreneurial Sierra Leoneans, aiming for a 30 per cent return for his backers.

Sierra Leone’s brutal civil war ended in 2002, leaving a shattered economy and devastated population. Five years of peace have followed, during which hundreds of millions of pounds of aid money has poured into the country, including £40 million annually from Britain.

Yet Sierra Leone has stubbornly refused to show signs of improvement; its six million people are the world’s second-poorest (only the people of Niger are worse off, according to figures from the United Nations human development index).

“The private sector is the only way that Sierra Leone can work its way out of poverty,” Mr O’Cathasaigh argues - and he is not alone in believing this. In a speech on ending poverty delivered at the UN last month, Gordon Brown said: “Not only does business have the technology, the skills, the expertise for wealth and job creation . . . it is also in your best business interest to help poor countries develop.”

The flaw is in the way in which the aid system works. Aid consultants fly into a country carrying a pile of briefing papers written by other consultants. They stay for up to 12 months, are paid and then leave. “They aren’t accountable for what they do,” Mr O’Cathasaigh says.

According to Jeffrey Sachs, the economist, the system is also wasteful. Professor Sachs estimates that out of every dollar given to Africa in aid, 16 cents goes to foreign consultants rather than to the intended, poverty-stricken recipients.

With his friend and co-founder, Mr O’Cathasaigh has persuaded some business heavyweights to back their plans: ManoCap (named after West Africa’s Mano River) is chaired by Lord Stevenson, the HBOS chairman.

Unlike many of its African neighbours, Sierra Leone is only beginning to attract attention from China. It lacks the vast stores of oil and iron ore that China craves. Instead it has diamonds, gold, forests and fish - and perhaps, in the future, tourism. Before the war, British and German visitors flocked to Sierra Leone’s unspoilt sandy beaches, where palm trees nod towards clear, warm waters, and freshly grilled lobster was delivered with a smile and a low price tag. It provided the setting for the iconic 1980s advert for the Bounty chocolate bar.

ManoCap will not invest in mining, which is dominated by Lebanese-funded artisanal miners who sift stones from muddy pits in the east of the country and by South African and Israeli companies. But Mr O’Cathasaigh sees “huge opportunities” in the fisheries industry, agriculture, financial services, manufacturing and tourism. The fund’s first investment in a local food and beverage manufacturer should be concluded in the next six weeks.

Hindering investment is the fact that Sierra Leone, despite its small size - it is half as big as England - and relatively limited resources, is as corrupt as Nigeria, according to rankings from the Transparency International Index. “Corruption is an enormous challenge; it makes very attractive sectors uneconomical and in small ways you are asked for stuff every day,” Mr O’Cathasaigh admits. The legal framework is also very weak.

Despite the challenges of working in a postconflict country, Mr O’Cathasaigh is not leaving. He and Mr Cairnes will stay in Freetown throughout their fund’s seven-year life and hope to raise a second fund to target larger projects and regional investments.

Yet there are downsides. “The fact that most things don’t work is frustrating,” Mr O’Cathasaigh says. “And if you ask Tom he’ll tell you it’s hard to meet the girl of your dreams.”

British private equity investors are turning their attention to Sierra Leone, the West African country that is trying to recover from its decade-long civil war.

Ranked by the UN Development Programme in its Human Development Index (HDI) as the least developed of 177 countries surveyed, Sierra Leone suffers high unemployment and illiteracy rates and President Koroma’s year-old Government is struggling to contain endemic corruption.

Tom Cairnes, the co-founder, with Niall O’Cathasaigh, of the Sierra Leone Investment Fund, which trades in the capital, Freetown, as ManoCap, says that only robust investments to boost indigenous businesses will help to spur economic growth in the nation of 6.3 million people. “Sierra Leone has fantastic agricultural and mineral resources and a large and young labour force — it shouldn’t be the bottom country in the HDI,” he said.

ManoCap invests in small to medium-sized agriculture, fisheries and light manufacturing enterprises but not in lucrative mineral deals.

The leaking of donor funds through official corruption in many developing economies has prompted aid agencies to explore the use of venture capital in a change that is expected to yield more meaningful benefits for poor communities.

This is how Britain’s Department for International Development (DfID) financed ManoCap’s facility for training local entrepreneurs last year. Mr Cairnes said: “For every dollar that DfID provides to us, we raise another ten in investment capital.”

However, it is unclear how benefits of such investment from the West flow to those at the bottom of society.

The UK gives an annual £40 million in development assistance to Sierra Leone, where most businesses are sole proprietorships whose assets are not registered in the name of the business. As a result, local entrepreneurs find it hard to access bank loans or attract external funding.

Mr Cairnes said: “If we employ Sierra Leoneans in the next five to ten years, create business management schemes and bring people through managerial processes within our business, we would be creating the next generation of managers [and] this is the only way to change the lives of the majority of the people.”

Critics say that some British investors in Sierra Leone are interested only in exploiting a weak legal system. ManoCap’s founders insist that they are not being opportunistic by investing in the country, which does not have employment or minimum wage legislation, but want to help it to develop by building skills. ManoCap has so far invested about £500,000 in three businesses employing up to 200 workers and is seeking finance from British investors to expand its portfolio.

ManoCap has an advisory board led by Lord Stevenson of Coddenham, chairman of HBOS, and includes figures from private equity. The fund hopes to use members’ networks and expertise to find funds and talent to strengthen its African investments.