The Mismanagement of the COVID-19 Funds in Cameroon and the Necessity for Reforms Towards More Transparency and Accountability

Mismanagement of Funds blog

Transparency and accountability in the management of public resources are the foundation of good governance. Ensuring that public funds are well managed has always been a central concern of citizens. For over three decades, embezzlement scandals have been recurrent in Cameroon. The most recent is related to the management of the COVID-19 funds nicknamed “Covidgate” where over 160 high profile government officials involved in the management of the COVID-19 funds allegedly embezzled public resources for personal gain.

Response Plan to Fight Against covid19 COVID-19 in Cameroon and Its FinancingThe first case of COVID-19 was confirmed in Cameroon on the 6th of March 2020. To fight the pandemic, the government prepared an emergency response plan with support from partners. To finance the response plan, the head of state created a special solidarity fund with an initial endowment of XAF 1 billion (US$ 2M). A total amount of XAF 180 billion (US$360 M) was made available for the fight against COVID-19 in Cameroon with the biggest contribution from the International Monetary Fund (IMF) who approved a credit facility of XAF 135 billion (US$270 M).

The Management of the covid19 COVID-19 Funds by the GovernmentOn the 22nd of July 2020, the Prime Minister – the head of government – signed a decree for the distribution and utilization of COVID-19 funds in Cameroon. Twenty-four ministerial departments shared XAF 128.2 billion (71% of the XAF 180 billion). After these disbursements, growing concerns on the opacity in the management of these funds were voiced, with demands for more transparency by civil society. These demands reached a climax when Honorable Jean-Michel Nintcheu – a parliamentarian from the Social Democratic Front, requested for an inquiry due to suspicions of mismanagement and fiscal malpractices. The situation worsened when the Cameroonian government began negotiations for a new funding program with the IMF for the 2021 financial year and an audit report was requested for the management of the initial XAF 126 billion (US$252 M) that was already disbursed from the credit facility. This conditionality led to several audit processes by several institutions, including the Supreme Court and the Supreme State Control. Investigations into two ministries (the Ministry of Public Health and the Ministry of Scientific Research and Innovation), revealed up to 30 management errors/irregularities and recommended the opening of ten proceedings for offenses ranging from overbilling, falsification of procurement documents, single source procurement of medical equipment, insider dealing amongst others.

Understanding the ‘Covidgate’ Through Political Settlements AnalysisThough there is a well-established legal framework and numerous institutions to fight corruption in Cameroon, the phenomenon keeps persisting with the most recent being the Covidgate. Despite there being previous scandals of even larger magnitude, none had caused such public outcry.  The peculiarity of the Covidgate arose from the convergence of endogen actions – opposition parliamentarians and civil society, triggered by external factors – requirement for an audit by IMF within the context of global public health. Over the years, many government officials have been jailed for embezzlement. The bigger question is why the phenomenon continues unperturbed and on a bigger scale despite the existence of a legal framework and the multiplicity of institutions created to fight against corruption and misappropriation of public funds?

A political settlement is an informal understanding or agreement forged amongst political, social, or economic elites that can have varying effects on the governance and service delivery of state institutions. Cameroon, like many developing countries, has a “Clientelist” political settlement, going by Khan’s institutional typology of political settlements[1] or Limited Access Orders (LAO) using Douglas North’s explanation of political settlements[2]. This type of settlement relies on “personalized elite bargains” with restrictive and privileged access to public resources by a dominant elite. North distinguishes two types of dominant elites which are the “predatory” and the “developmental” type. In a political settlement where the dominant elite is developmental, the political entrepreneur in command, through his leadership, undertake projects geared towards general interest. Under predatory forms, governance is mostly authoritarian and self-centered, with poor public service performance and mismanagement of public finances. The second variant of political settlements fits best the Cameroonian context. In fact, what is perceived by citizens as abnormal is rather a way for the members of the dominant elite to share what they consider as spoils. Going beyond the scandal itself, Covidgate is far from being just a problem of misappropriation of public funds. There are clear indications that it is the consequence of a fight between factions within the dominant elite on sharing the COVID-19 funds. This is evidenced by the leak of the highly confidential audit report which could only have come from political elites, intending to expose the “winning faction”. There is also growing consensus that “Covidgate” is the consequence of squabbles within the elite at the dawn of a political transition after close to 40 years of rule by the current regime.

Covidgate Presents a Window of Opportunity for Public Financial Management Reforms in CameroonThe Covidgate presents a wonderful window of opportunity for an agenda-setting and acceleration of public financial management reforms in Cameroon. Though many political analysts are pessimistic about the outcome of such reforms, arguing that it is a systemic problem that requires a radical overhaul of the system, it will be unrealistic to wait for such a moment to come before taking action. Reforms can still be initiated in unstable or corrupt settings. There is a need to improve all the phases of the budget cycle with the ultimate goal of strengthening the “four pillars” of governance: accountability, transparency, predictability, and participation. Weaknesses in budgeting depend on political settlements and on the organization of the government. Cameroon suffers from a lack of coordination between ministries, coupled with unclear lines of accountability, or overlaps in the distribution of responsibility.

There is a clear link between public financial management functions – planning, budgeting, execution and accounting – and strategic purchasing functions of benefits specification, contracting, provider payment and performance monitoring – and they may be considered complementary concepts. The process of budget formulation is synchronous with benefits specification, where policy priorities and objectives are harmonized with the health planning and budgeting process to include health priorities that should be covered in the benefit package. Processes and mechanisms for budgeting and policy formulation should be explicitly designed to reinforce coordination and cohesion in decision making with clear lines of accountability. Budget execution is the use of public funds to achieve set priorities and deliver the benefit package. Funds are transferred to specific providers – who may or may not have formal contracts – to provide needed services. Budget execution needs to be improved along two lines: enhancing expenditure control and creating the conditions for increased efficiency in public spending. This can be achieved through adequate cash management, transparent procedures for procurement and strategic purchasing in the health sector. For more efficient public spending, there should be effective decentralization of controls – that is, providers should have sufficient autonomy to use public funds to deliver health services and also have clear accounting standards for the use of these public funds. Accountability is the last function linked to financial accounting for public funds and should also be linked to achieving set objectives and priorities. In strategic purchasing, we focus on the financial management and the  quality of care provided to ensure the best possible health outcomes. Accountability is generally an internal government function but should also include the legislature, civil society, and citizens as the voice and representatives of the population served. However, these reforms can only be effective if parliamentarians, citizens, and civil society are capacitated to fully play its “watch dog” role through sound training in budget tracking.  

These challenges are not unique to Cameroon and a joint agenda for many African countries to improve public financial management to improve the efficiency of resource use to improve access to health services and improve population health outcomes.


[1] Khan, Mushtaq (2010) Political Settlements and the Governance of Growth-Enhancing Institutions.

[2] North, D. et al, 2007, ‘Limited Access Orders in the Developing World: A New Approach to the Problems of Development’, Policy Research working paper, WPS 4359, World Bank, Washington, D.C.

Authors:

Joseph Maabo Tankwa and Isidore SieleunouResearch for Development International, Yaounde, Cameroon

The Mismanagement of the COVID-19 Funds in Cameroon and the Necessity for Reforms Towards More Transparency and Accountability

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