Trade Negotiations Insights • Volume 8 • Number 7 • September 2009

They Want to Silence Us: The Impact of Governance on Trade and Rural Development in Cameroon

by Jacob Kotcho

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One of the major obstacles to the “harmonious and favourable integration” of ACP countries in global trade is lack of governance. Contributing to global trade presupposes many requirements that several ACP countries can’t meet due to poor governance, observed both in these countries’ institutions (executive, parliament, and justice) and in international fora where global trade rules are defined.

Poor governance practices within national institutions include embezzlement, corruption, and a lack of adequate political vision and framework for trade development. Regarding international fora, governance problems are linked to a lack of transparency between parties and to the failure to respect commitments and regulations.

It is noteworthy to mention that there are numerous causes to the lack of governance preventing trade development in ACP countries. The lack of democracy, freedom, and respect for established rules constitute a major barrier to taking full advantage of trade liberalisation. In such a context, independent stakeholders who are not party to trade negotiations can play a key role in ensuring better citizen monitoring.

Political will to fight behaviours contrary to good governance principles cannot be imposed, and the lack of a development agenda based on a citizen vision and of clearly identified and respected priorities are the source of a highly detrimental lack of transparency.

Based on these seemingly insignificant events occurring in some ACP countries, this article exemplifies the impacts of poor governance on trade development.

Having an adequate qualitative and quantitative trade offer

According to free trade logic, in order to compete with other global market providers, ACP countries must have a sufficient offering of both goods and services. The development of the initiative depends on important investments made by public authorities and by private stakeholders. But these investments often come up against governance issues. The case of Cameroon’s maize sector is a good example of this situation.

Indeed, from 2004 to 2006, ACDIC, along with its partners, carried out a campaign against the imports of frozen chicken pieces from Europe and America. As a result of the campaign, the imports ended, the investments in local poultry sector were boosted - the weekly production of day-old chicks increased from 225,000 to 600,000 - and public authorities subsidise the production of broilers. The increase of poultry production triggered a higher demand in maize, which makes up more than 65 percent of a farmed chicken’s diet. In September 2008, one kilo of maize was worth 195 CFA francs compared to 90 CFA francs in September 2007. In this situation, poultry farmers’ profit margins were seriously affected and they were unable to produce a 2.2-kilo chicken at the approved price of 2,200 CFA francs. This situation is beyond understanding since (i) only one third of Cameroon’s cultivable land is being utilised, (ii) a young and trained workforce is available and (iii) research has developed improved maize seeds, which grow in every agro-ecological zone of the country. Furthermore, public authorities have designed and implemented a national program aiming to support the poultry sector. Despite all these advantages, in 2008 Cameroon experienced a maize shortage of 60,000 tons, and it could be of 120,000 tons in 2009. In order to understand the situation, ACDIC carried out a study that found the following: 62 percent of the funds intended for maize farmers as subsidies had been embezzled.

This fact clearly shows that poor governance practices have serious consequences on the development of the countries’ trading capacities. Indeed, regarding Cameroon maize demand and export possibilities to neighbouring countries - thanks to Cameroon’s position within CEMAC - the development of this production should have generated important wealth and employment, as well as some strengthening of the regional trading area. For the moment, these effects have been jeopardised due to the embezzlement of public funds intended for production.

Lack of freedom, democracy, and respect for established rules

The adequate functioning of institutions in charge of regulating political, economic, and social life is a prerequisite for the development of a trade sector. These institutions guarantee a favourable framework for public and private investments, protect the country’s interests in a development perspective, and regulate trading areas for the protection of all stakeholders. Hence, their failure to function properly is an open door to governance abuses. In such a context, independent stakeholders charged with citizen monitoring of public action could be silenced and prevented from acting.

After studies on the management of funds allocated to maize production financing carried out within Cameroon’s Ministry of Agriculture and Rural Development, ACDIC denounced the actions. Among other initiatives, it attempted to organise a public demonstration, which was prohibited by Yaoundé local authorities even though it strictly respected the country’s laws. At ACDIC president’s request, the association’s members later gathered at the Ministry’s headquarters where they were violently dispersed by the police; two protesters were injured and ten others were arrested. At the end of the police investigation, five of the ten ACDIC members arrested were brought before Yaoundé Court on 22 May 2009 and two of them were found guilty of organising an illegal demonstration and sentenced to two months of imprisonment and three years of deferred sentence.

Such an abuse of justice illustrates how the inadequate functioning of institutions can quell initiatives likely to generate opportunities. This organisation, which denounces poor governance, is condemned while those embezzling public funds intended for the trade development are left free. Although the law dictates that the state prosecutor take up any denunciation of action damaging public funds, no such action has been engaged against the persons responsible for the embezzlement in the maize sector within Cameroon’s Ministry of Agriculture.

The National Anti-Corruption Commission (CONAC), an institution of the Republic of Cameroon in charge of fighting corruption, has taken up the matter, carried out a verification investigation and published a report in June 2009 which confirms the ACDIC accusations. Despite the report’s publication and the media coverage it received, no action has been taken against the embezzlers whose names are stated in the report.

Some extracts of the CONAC report:

- Cases of embezzlement have been identified in all five regions and all nineteen departments examined by CONAC investigators.

- The testimonies gathered and facts observed affirm that embezzlement has been found at all level of the hierarchy.

- We can affirm that only a very small part of the funds intended for subsidising maize production in the framework of PNAFM (national plan to support the maize sector) was indeed distributed.

o 36.09 percent of funds allocated to 97 investigated GIC (common initiative group) were received by 30 GIC and associations considered as unknown on the field

o Out of the 97 GIC and associations investigated, 77 have not produced maize although they have received a subsidy to do so

o 92.15 percent declare they have not received all of the subsidy

o Only 29 GIC out of the 97 investigated say they have received the subsidy and cultivate maize

o The import deemed embezzled from maize production is estimated to 611,259,555 CFA francs.

Beyond the case of the maize sector, it’s important to be aware that the lack of democracy, freedom and respect for established rules constitute a major barrier to taking full advantage of trade.

Need for transparency in international fora: “Do as I say not as I do”?

The lack of transparency in trade rules negotiations fora is another obstacle jeopardising ACP countries’ trade development. While an important element of trade agreements is to help promote good governance, the EPA negotiations process itself is an obstacle. Key groups, such as poor producers, farm workers, and small producers, are still kept out of trade negotiations while the EU uses its dominant position to get what it wants. In turn, ACP governments’ capacity and will to account for their actions to their citizens is reduced.

Regardless, civil society participation to EPA negotiations has proven to be essential. It became the voice to express disagreements and dishonest tactics. “Good governance” cannot be imported; it is built from the inside-out. Good governance needs civil society as the soil needs worms, which daily work the land, ceaselessly digging to bring oxygen, and which guarantee the sustainable fertility of the land.

To conclude, it’s important to underline that the responsibility for the lack of governance curbing ACP countries’ trade development is shared. Given the lack of political will of countries within the Central African region to fight behaviours contrary to good governance principles, the European Commission could further encourage participative democracy through EPAs, so that negotiations are truly appropriate and trigger deep reforms. This goal should also lead to adopt more flexible rules: a more tangible asymmetry through the introduction of Special and Differential Treatment in EPAs for ACP countries, in accordance with their level of development.

Author

Jacob Kotcho is Secretary General of the Citizens Association for the Defence of Collective Interests (ACDIC).

Association Citoyenne de Défense des Intérêts Collectifs (Citizens Association for the Defence of Collective Interests), organisation under Cameroon law www.acdic.net / acdic@acdic.net

Cameroon’s area is 475,000 Km2 of which 15% (71,250 km2) are arable land. Only 29% of these are cultivated, i.e. 14,200 km2, which means that 57,000 km2 of arable land are available.

The PNAFM (national support program of the maize sector) is financed under HIPC and has a 5.2 billion CFA francs budget for 3 years. From 2006 to 2008, the project should distribute 2.08 billion CFA francs of subsidies to maize producers.

The Economic and Monetary Community of Central Africa, made up of 6 countries (Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon), is a 30-million consumers market, and Cameroon is the economic leader.

See Euronews documentation on 19 May 2009 at http://www.euronews.net/2009/02/19/cameroon-battle-for-food-sovereignty/

Investigation on corruption practices within the PNAFM (national support program of the maize sector) of MINADER (Cameroon Ministry of Agriculture and Rural Development). CONAC Investigation report, Investigation carried out from 22nd December 2008 to 20th January 2009;

http://www.acdic.net/index.php?option=com_content&view=article&id=106

For more information, see ‘The EU’s cock-eyed approach to trade and governance’ in Trade Negotiations Insights, vol.8, no.2, March 2009, and also ‘The Emperor’s new clothes’ vol.6, no.8, www.acp-eu-trade.org/tni