Mon | Aug 21, 2017

Editorial | EU wants answers

Published:Saturday | July 2, 2016 | 7:00 AM

Deficiencies identified by Auditor General (AG) Pamela Monroe Ellis in the management of the Cane Expansion Fund (CEF) invites a closer look into the accountability mechanisms that are in place for managing and disbursing aid in Jamaica.

The CEF is a project funded by the European Union (EU) after changes were made to the Sugar Protocol, which once guaranteed preferential sugar imports from Jamaica. Established in 2008, funds are being provided up to 2020 to assist with improving efficiency in the sugar sector and to support the expansion of cane production.

The AG's report tabled in Parliament earlier this week was critical of the loan application and disbursement practices at the CEF. Some $2 billion in loans and grants were disbursed by the CEF between 2008 and 2015.

In one glaring example, Mrs Monroe Ellis cited a company that had successfully negotiated eight loans between 2009 and 2014, yet there was no evidence of an application ever made or approval given for these loans. Then there was also the revelation that 40 per cent of the funds were disbursed to employees of the Ministry of Agriculture and related agencies.

A statement from the Sugar Industry Authority (SIA), which administers the Fund on behalf of the Ministry of Agriculture, contradicted some of those findings. The SIA explained that loan funds are disbursed directly to suppliers of goods and services and not directly to borrowers, unless they are themselves also suppliers.

CEF head George Callaghan, in an interview with this newspaper, reinforced the SIA's position when he insisted that the loan committee approves all loans and that the completed application form is accompanied by a business plan.

Yet, there are still many unanswered questions about how loans were made and funds disbursed and whether the objectives of the Sugar Transformation Programme are being met. The CEF funds were supposed to revitalise the local sugar industry and raise production from 50,000 tonnes of cane per hectare to 70,000 tonnes.

So, have the borrowers of the CEF funds increased their yield of the crop, and by how much? If the money goes astray in non-sugar endeavours, the objectives of the CEF funds will not be met.

 

INCREASING DEMANDS FOR TRANSPARENCY

 

Aid born out of the ruins of World War II has seen developed countries provide developing nations like Jamaica with assistance in the form of budgetary support, as well as through funding projects. Demands for aid transparency have been increasing alongside the urgent call for the effective use of funding to address various challenges such as poverty, health care, human rights and climate change.

Both the donors and beneficiaries of aid require accountability. Donors are primarily accountable to their own taxpayers and citizens. We are, therefore, not surprised that EU head Jesus Orus Baguena has taken note of the AG's finding and will himself be seeking answers.

Repeatedly, we have heard the auditor general express concern about contractual accountability and point to the need to strengthen accountability mechanisms. The contractor general, too, has been kept busy investigating procurement and other breaches in

various agencies. Yet their efforts fail to solve the fundamental problem of corruption, which continues to constrain and, in some cases, undermine the country's development.

Citizens in recipient countries, including members of civil society, should hold their governments and institutions accountable for the use of aid money. Government and its agencies should be transparent and more accountable for resources that combine to reduce poverty in our midst.