Final - LAVI CSDF PEA Report 2018-06-11

Report for USAID/Liberia: Not for Circulation, Publication or Citation
Political Economy Analysis:

Reform of the County Social
Development Fund (CSDF)
USAID Liberia Accountability

and Voice Initiative (LAVI)
March 2017
This publication was produced by the USAID Liberia Accountability and Voice Initiative.
Draft for USAID/Liberia: Not for Circulation, Publication or Citation
Content
Contents..................................................................................................................................2
Acronyms................................................................................................................................3
1. Executive Summary.........................................................................................................5
2. Overview.........................................................................................................................7
3. Context............................................................................................................................7
3.1. Prior work by LAVI/NRM Coalition on CSDF Reform..............................................................7
3.2. Political Economy Analysis of CSDF Reform...........................................................................8
3.3. History of the CSDF................................................................................................................9
3.4. Official CSDF Process............................................................................................................10
3.1. Challenges in the CSDF Process............................................................................................12
3.2. CSDF Positive Outcomes......................................................................................................14
3.3. Root Causes of Challenges...................................................................................................15
4. Reform Options..............................................................................................................16
4.1. Develop Stand-Alone CSDF Law...........................................................................................16
4.2. Reform PFM Act to allow SDF to go directly to counties......................................................17
4.3. Improve transparency of CSDF fund use..............................................................................18
4.4. Split CDF and SDF.................................................................................................................18
4.5. Reform National Budget Law...............................................................................................20
4.6. Direct Dividend Payments....................................................................................................22
4.7. Intergovernmental Fiscal Transfers......................................................................................23
5. Recommendations for LAVI............................................................................................24
5.1. Entry Points.........................................................................................................................24
5.2. Next Steps...........................................................................................................................26
6. Annex 1: Bibliography....................................................................................................27
7. Annex 2: Interviews.......................................................................................................31
8. Annex 3: Summary of Feedback from Stakeholder Validation Workshop........................34
2
Acronyms
AfDB African Development Bank
APF Alaska Permanent Fund
CDC Coalition for Democratic Change
CDF County Development Fund
CDFA County Development Fund Account
CMG Community Monitoring Group
CSDF County and Social Development Fund
CSO Civil Society Organization
CSR Corporate Sustainable Responsibility
DACDF Diamond Area Community Development Fund (Sierra Leone)
DDC District Development Committee/Council
DDP Direct Dividend Payment
DFC Dedicated Fund Committee
EITI Extractive Industry Transparency Initiative (Global)
GAC General Auditing Commission
GC Governance Commission
GDRC Government of Democratic Republic of Congo
GIZ German International Development Agency
GoL Government of Liberia
IFT Intergovernmental Fiscal Transfer
LAVI USAID/Liberia Accountability and Voice Initiative
LEITI Liberian Extractive Industry Transparency Initiative
LGA Local Government Act
MDA Mineral Development Agreement
MDF Minerals Development Fund (Ghana)
MFDP Ministry of Finance and Development Planning
3
MIA Ministry of Internal Affairs

NBC National Bureau of Concessions
NGO Non-Governmental Organization
NPP National Patriotic Party
NRM Natural Resource Management
NSAS Non-State Actors Secretariat
PE Political Economy
PEA Political Economy Analysis
PFM Public Financial Management
PMC Project Management Committee
PMT Project Management Team
PPCC Public Procurement and Concessions Commission
PPCA Public Procurement Commission Act
SDF Social Development Fund
TSA Treasury Single Account
UN United Nations
URL Uniform Resource Locator
USAID US Agency for International Development
4
1.Executive Summary
This political economy analysis (PEA) report assesses reform options and identifies realistic
entry points for the United States Agency for International Development (USAID)-funded
Liberia Accountability and Voice Initiative (LAVI) and its partner, Natural Resource
Management (NRM) Coalition, to advocate for and monitor policy and accountability reforms
for the County and Social Development Fund (CSDF) in Liberia. The report is based on desk
research as well as field research conducted in Monrovia as well as in Nimba, Bong and Grand
Bassa Counties from February 24-March 14, 2018. This study draws on extensive LAVI/NRM
Coalition work to date on the CSDF, such as the NRM Coalition Policy Brief and January 2018
LAVI CSDF Strategy, in order to help guide next steps for the group’s CSDF reform work. The
author focused on options for legislative reform of the CSDF primarily, but also considered
means for improving the CSDF via enhanced engagement of CSOs, media, private sector, and
local government. Additionally, the report builds on and validates the January 2018 LAVI CSDF
Strategy by reiterating the needs to: influence the 54th National Legislature to pass CSDF reform;
enhance community and citizen CSDF engagement via monitoring and reporting; and
strengthening partnerships between civil society and local government on CSDF reform.1
Following the report’s drafting, LAVI presented its findings to a validation workshop in April
2018, and Annex 3 summarizes participant and expert comments from that event.
The CSDF combines the County Development Fund (CDF), which starting in 2006 allocated
funds to Liberia’s 15 counties equally to decentralize economic and fiscal decision-making and
promote county-level infrastructure development; and the Social Development Fund (SDF),
which since 2008 allocated money for infrastructure projects in counties hosting concessions
from international extractive concessionaires, as negotiated in their respective Mineral
Development Agreements (MDAs). In April 2011, the SDF was merged with the CDF legislative
framework under the annual Budget Approval Act, whereby the Legislature assumed de facto
control of the process in a single County Social Development Fund (CSDF).
The current CSDF process set out in the annual Budget Approval Act establishes the de jure
steps for participatory planning, receiving, allocating and using CSDF finances. In contrast to the
orderly system of checks and balances outlined in the national budget, desk research and
interviews overwhelmingly found that the current CSDF process faces numerous challenges in
its implementation. Key challenges include: a county decision-making process (County Sittings)
controlled mainly by legislators; funds delayed or largely not received; project management
committees and teams selected based on allegiance to legislators rather than technical capacity,
and not accurately managing activities; citizens lacking meaningful participation and not
receiving CSDF benefits; County Superintendents largely excluded from decisions, operations
and oversight; projects often not built or built in wrong areas, overly expensive or otherwise
unhelpful to locals; and grossly insufficient monitoring of project implementation and fund
usage. Such challenges notwithstanding, research revealed limited positive outcomes from the
CSDF including sporadic reports of meaningful participation in county sittings; some counties
benefitting from SDF infrastructure projects; local citizen awareness of CSDF issues; and
strengthened local-level CSOs and government entities.
1
USAID/LAVI: A County Social Development Fund Strategy. 26 January 2018.
5
Underlying causes for CSDF challenges include corruption and political infighting; poor
planning and oversight; weak institutions (especially at local level); and poor collaboration,
communication and coordination among government and civil society actors. Corruption,
political infighting, and weak institutions are deeply engrained in Liberian governance and could
require decades to improve. This PEA thus focuses on planning and oversight and collaboration,
communication and coordination, which are more likely to improve in the short-term.
Reform options considered in this report include the following:
 a stand-alone national CSDF law;

 Public Financial Management Act reform to allow SDF finance to go directly to counties;
 more transparency in CSDF fund use;
 split CDF and SDF management (with the SDF controlled by companies directly, GoL via
committee or independent agency, or allocated to a local account for management);
 National Budget Law reform;
 Direct Dividend Payments; and
 Intergovernmental Fiscal Transfers.
Based on the evaluation of CSDF challenges and reform options, and in light of the current PE
context of Liberia, this report recommends immediately pursuing National Budget Law reform,
with ongoing evaluation of other options. Given that the Budget Law is annually revised and
provides much of the current CSDF configuration, it represents the most likely “quick win” suite
of reforms for Liberia and the NRM Coalition, albeit the most temporary. Longer-term options
such as a standalone bill will require drafting proposed text as early as possible to sensitize
legislators and the public, and to develop support. However, the urgency to develop final
legislation to solve the CSDF should not outweigh the need for reflection on all policy options
(including previously unconsidered options such as direct payments and intergovernmental fiscal
transfers) and reach consensus on what reforms are most essential and practical in the Liberian
context. Finally, the report recommends entry points in working with the Executive, Legislature,
local government, concessionaires and CSOs, with a view towards deepening collaboration and
communication between civil society and government.
6
2.Overview
This report assesses reform options and identifies realistic entry points for the United States
Agency for International Development (USAID)-funded Liberia Accountability and Voice
Initiative (LAVI) and its partners to advocate for and monitor policy and accountability reforms
for the County and Social Development Fund (CSDF) in Liberia. The report is oriented to
LAVI’s objective to strengthen horizontal and vertical linkages among actors to advocate for and
monitor policy and accountability issue-based reforms in the natural resource management
(NRM) sector.
Documents consulted for this report include LAVI’s supported research on CSDF, LAVI’s
partner reports, reports from other USAID projects, other development partner and civil society
organization (CSO) reports, existing political economy analyses (PEAs), Government of Liberia
(GoL) policy and legislation documents, academic research, natural resource and development
community contacts, and articles from journals, magazines, online sources, and newspapers (see
Annex 1). The LAVI and USAID teams based in Monrovia and the Washington, DC area were
especially helpful in identifying and providing many of these documents. In addition to desk
research, field research was conducted in Monrovia and in Nimba, Bong and Grand Bassa
Counties from February 24-March 14, 2018. This fieldwork included semi-structured interviews
with key stakeholders and site visits to a cross-section of county government offices (see Annex
2 for a complete list). Following the report’s drafting, LAVI presented its findings to a validation
workshop on April 25, 2018 (see Annex 3 for a summary of participant and expert comments
from that event).
3.Context
3.1.Prior work by LAVI/NRM Coalition on CSDF Reform
LAVI has been working to facilitate and strengthen linkages between key actors in its first issue
area: the natural resource management and concessions sector. LAVI supported eight Liberian
CSOs to form the Natural Resource Management (NRM) Coalition to advocate for increased
citizen participation in the management and monitoring of County Social Development Funds
(CSDFs). The Coalition consists of the Institute for Research and Democratic Development
(IREDD), Sustainable Development Institute (SDI), Citizens United to Promote Peace &
Democracy in Liberia (CUPPADL), Platform for Dialogue and Peace (P4DP), Liberia Media
Center (LMC), Development Education Network-Liberia (DEN-L), Rural Human Rights
Activists Program (RHRAP), and NAYMOTE – Partners for Democratic Development. Each
organization in the coalition has specific expertise and relationships that, when brought together
to address a specific issue, have the greatest potential to bring about positive reform.
To date, the NRM Coalition with support of LAVI has conducted 395 multi-stakeholder
meetings around the country to raise awareness around management of the CSDF. During these
engagements, NRM Partners distributed pledge cards and score cards, acquiring 342 signed
pledge cards from incumbent lawmakers, political aspirants and other key stakeholders
7
committing to CSDF reforms. The NRM Coalition trained more than 2,200 community
representatives in advocacy and their rights related to concession agreements - of which several
groups are already initiating advocacy actions. Additionally, the NRM Coalition reactivated the
District Development Councils (DDCs), Community Monitoring Groups (CMGs) and engaged
members to monitor local projects funded by the CSDF.
With LAVI technical assistance, the National Resource Management (NRM) Coalition
conducted 1,459 surveys, 90 focus groups, and 119 key informant interviews on the monitoring
and management of the County Social Development Funds (CSDF) around Liberia to inform its
advocacy work and community engagement. Based on its report and advocacy work around the
country, the NRM Coalition developed a Policy Brief on CSDF, which highlighted two
alternatives in respect to the CSDF: 1) separating the CSDF into two separate funds - the County
Development Fund (CDF) and Social Development Fund (SDF); and 2) amending Chapter 9 of
the Government of Liberia budget law to ensure inclusive citizen participation in the
management and monitoring of the funds. This PEA report builds on LAVI/NRM Coalition work
to date on the CSDF and serves to verify the NRM Coalition Policy Brief, in order to provide
guidance on next steps for the group’s CSDF reform strategy.
3.2.Political Economy Analysis of CSDF Reform

The Political Economy (PE) methodology used in this study asks “not simply how things happen
in an aid-recipient country, but why things happen... to understand how and why things work as
they do locally, who the key actors are, and what incentivizes them… and advise which entry
points we might use.”2 Building on the USAID Applied Political Economy Analysis (PEA) Field
Guide (2016) and literature of other development partners engaged in PEA,3 the following PE
questions guided this study:
 What citizen participation in decision making and benefits exists, and how can Liberia
increase this?
 What are stakeholders’ incentives and disincentives for reform (including individuals,
institutions, organizations) regarding the CSDF?
 What transparency and accountability mechanisms are in place or are needed to identify,
formulate, implement and sustain CSDF reforms?
 Do stakeholders collaborate and coordinate, and what improvements are needed?
 What are the leading reform options to consider and their associated advantages,
disadvantages and feasibilities?
 What means exist to increasing political will, especially with regard to passing or
revising legislation?
Among the above broad set of PE research questions, the study highlighted (a) those changes
most needed to make the CSDF work to help local citizens receive benefits, as originally
planned, and (b) how best these changes can be made, considering short-, medium- and long-
2
USAID. Applied Political Economy Analysis (PEA) Field Guide, 4 February 2016. URL:
https://www.usaidlearninglab.org/library/applied-political-economy-analysis-field-guide
3
See, e.g., DFID, July 2009. “Political Economy Analysis How To Note.” URL: https://www.odi.org/sites/odi.org.uk/files/odi-
assets/events-documents/3797.pdf. See also, Waites, A., July 2017. The Beginner's Guide to. Political Economy Analysis. (PEA).
National School of Government. International (NSGI). URL: http://sclr.stabilisationunit.gov.uk/publications/the-national-school-
of-government-international-series/1248-the-beginners-guide-to-pea-1/file a
8
term options. The study focused on options for legislative reform of the CSDF primarily, but also
considered means for improving the CSDF via enhanced engagement of CSOs, media, private
sector, and local government. The latter encompasses questions on how these changes can be
made, both in terms of most feasible options working with local PE realities, and how to gain the
necessary support from key actors in Monrovia and the counties.
3.3.History of the CSDF

County Development Fund
Having inherited a broken state following years of civil war and poor governance, President
Ellen Sirleaf introduced the County Development Fund (CDF) in 2006 under the national Budget
Approval Act of that year in an attempt to decentralize decision-making in economic and fiscal
governance.4 A 2015 study from the Liberia Governance Commission found that the CDF was
included in the budget law to fund both “post-war infrastructure development in all counties
based on identified projects [and] … local government service delivery to be managed by local
officials under the decentralization program.”5 The 2006 Act gave control to the Legislative
branch over the CDF, specifying that “the Legislative Caucuses of the various Counties shall be
involved with, and participate in, the consultations at the county and district levels relating to
formulation of programs for the utilization of the County Development Funds.”6 The Ministry of
Finance and Development Planning (MFDP) then requests allotments against this for rural
development activities. Since then, the Budget text has grown and the relevant section of the
Budget Act has changed annually with each national budget law (currently in Section 9), and
informal application of the mechanism results in wide variation in its implementation from
county to county.7 The CDF allotment to counties has grown from an initial US $60,000 per
county in 2006 to US $200,000 per county since 2014 (US $3 million total).8 As allocations are
equal per county, they do not vary according to differences such as population, county size or
socio-economic needs—although other programs do apply such criteria transferring funds to sub-
national units.9
Social Development Fund

In 2008, the Administration of President Sirleaf established the Social Development Fund (SDF)
via Mineral Development Agreements (MDAs) negotiated with each international company
operating extractive concessions in Liberia. Unlike the CDF, the intent of the SDF mechanism
was to recompense counties where extraction activities take place, as it is spent only in projects
in those counties.10 Agreements vary per concessionaire and can fluctuate according to
international markets and companies’ performance.11 Under the MDA of ArcelorMittal and the
GoL, the company paid US $3 million into the SDF to be shared between Bong, Grand Bassa,
4
See, e.g., Quato, B. 13 August 2015. “How Liberia’s County Development Fund Works.” The Bush Chicken (Op-Ed). URL:
http://www.bushchicken.com/how-liberias-county-development-fund-works/
5
Liberia GC, 2015. Local development financing in Liberia: Legislating sustainable budget systems for decentralized
governance. Presentation at roundtable on the relevance/importance of County Development Fund. URL: http://bit.ly/2dzQ4rW
6
The Budget Approval Act of 2006-2007 originally set out the County Development Fund in Section III(e) (Expenditure).
7
See, USAID, at 10. “An Evaluation of the National Democratic Institute (NDI) Legislative Strengthening Program in Liberia.”
March 2013. URL: http://pdf.usaid.gov/pdf_docs/pdacy481.pdf
8
Budget figures from GOL MFDP National Budgets FY2006/07 and FY2015/16.
9
Nyei, I., (2014). Decentralizing the State in Liberia: The Issues, Progress and Challenges. Stability: International Journal of
Security and Development. 3(1), p. Art. 34. DOI: http://doi.org/10.5334/sta.eg
10
Additionally, 20 percent was dedicated to impacted communities in MDAs initially.
11
For example, initially AcelorMittal agreed to pay US $3M annually (which it later revised in light of an economic downturn to
US $1.5M/year); whereas BHP pays US $100,000, and Chanel Union (CH) pays 1.5M annually.
9
and Nimba counties as compensation for iron mining in Nimba County and a railway to shuttle
iron ore from Nimba to the port of Buchanan in Grand Bassa County via Bong County.
A Dedicated Fund Committee (DFC) initially managed the SDF under Guidelines for the
Management of the Social Development Fund, with the Minister of Lands, Mines and Energy
serving as chair and representation from the then Ministries of Finance and Planning and
Economic Affairs,12 ArcelorMittal Liberia, and the secretariat of the Liberia Reconstruction and
Development Committee. Originally, the MFDP received SDF funds from each concessionaire
and transferred them to a “Special Fund” with the DFC Chair and ArcelorMittal’s representative
as joint signatories. With passage of the Public Financial Management Act in 2009 requiring all
government funds to be held centrally, CSDF funds went to the Consolidated Fund MFDP-
controlled government revenue account.13
Merger: County & Social Development Fund

In April 2011, the CDF and SDF were merged into a single County Social Development Fund
(CSDF) on a decision of the Dedicated Fund Committee and the Ministry of Internal Affairs
after a review of county-level administration challenges. Under the national budget act and new
CSDF management guidelines,14 which together represent the main legal framework for CSDF
management, each county establishes and manages a County Development Account at a local
bank for CSDF finances. By merging the SDF with the existing CDF legislative framework
under the annual Budget Approval Act, the Legislature took control of process.
3.4.Official CSDF Process

As pictured in Error: Reference source not found below, the current de jure CSDF process as set
out in the annual Budget Approval Act establishes the following steps for participatory planning,
receiving, allocating and use of CSDF finances:15
1. Funds from the Liberian national budget (CDF) and extractive industry concessionaires
(SDF) are channeled into the National Claims section of the National Budget. The MFDP
controls this account, which is actually part of the national Consolidated Fund for Liberia.
2. Since 2012, the County Legislative Caucus (all senators and representatives from a given
county, also referred to as the County Caucus) gives consent to the County Superintendent
to convene the “County Sitting”—i.e., the Sitting of the County Council, where the Chair of
the County Caucus sits as chair.16 As currently drafted, the County Council is limited in its
powers (see steps 3, 5 and 9 below) and lacks powers such as demanding accountability or
drafting or vetoing local ordinances.17
12
Since then, the Ministry of Finance became the Ministry of Finance, Development and Planning (MFDP) and the Ministry of
Planning and Economic no longer exists.
13
Public Financial Management Act 2009, Section 4 (establishing a Consolidated Fund into which all State-controlled public
funds are received and held centrally before disbursement to sectors or subnational units, with MFDP management and
Legislative oversight).
14
The CSDF management guidelines are not publicly available and could not be found for review in this study.
15
Based on the most recent national budget available (FY2015-16) and respondents’ explanations of the process. As CSDF
section text was missing from sections (j)-(n) in FY2015-2016 and the text is largely repeated each year, the explanation here is
also derived partly from previous budget years.
16
The 2015-2016 Budget did not include the County Council members as pages were missing, though previous budgets defined
its composition. See, e.g., Budget Approval Act, FY 2012-2013, Section (K).
17
Nyei, 2011. Liberia Decentralization Policy: a roadmap to participatory governance and development inLiberia. URL:
http://www.ibrahimnyei.blogspot.com/2011/08/liberia-decentralization-policy-roadmap.html
10
3. In parallel, those convened at each County Council Sitting decide on priority areas and types
of programs and projects in which to spend the funds in the County Development Fund
Account (CDFA). Decisions of the County Council are formulated into Resolutions, which
are signed and witnessed by the officials present and sent to the MIA to request allocation of
funds.18
Figure 1: Overview of the current CSDF process
Icons made by Freepik from www.flaticon.com
4. On receiving the Resolution of the County Sitting, the MIA verifies that the County has
filed its paperwork accurately and sends to MFDP to request the allotment.
5. On receiving the County allotment request via MIA and necessary approvals from the
Public Procurement Commission (to ensure that the County follows required rules under the
2005 Public Procurement and Concessions Act, or PPCA), the MFDP allocates the funds
from the National Claims account in the consolidated national revenue to the CDFA in three
tranches and checks ongoing county financial reporting before issuing tranches.
6. During its annual Sitting, the County Council elects a Project Management Committee
(PMC) consisting of a Chairperson, Treasurer, and Comptroller, and defines the criteria for
PMC positions. The PMC is charged with identifying, costing, overseeing and coordinating
all projects’ design and implementation, as well as managing all the finances and transaction
documentation of CSDF projects in the county in accordance with the PPCA and national
budget implementing regulations.
7. After the Council allocates funds to area, citizens of each targeted area meet and appoint
Project Management Team(s) (PMTs) to coordinate planning and process documents for
projects.
8. PMTs report to the project area citizens and to the PMC on progress of each project.
9. In turn, the PMC submits quarterly status reports to the County Superintendent, County
Caucus, and Sittings of the County Council. County Sittings review progress of all county
18
The FY 2012-2013 Budget Approval Act requires that Resolutions be “signed by the heads of delegations attending the sitting;
the presiding officers of the sitting; Witnessed by the County Superintendent or, in the stead, the County Assistant Superintendent
for Fiscal and Financial Management; and attested by the Chairperson and majority members of the County Legislative Caucus.”
11
projects and makes corrections needed to prevent delays in disbursements or abuse of funds
allocated.
1.1.Challenges in the CSDF Process

In contrast to the orderly system of checks and balances outlined in the national budget and
recapped above, respondents corroborated research finding the current CSDF process to face
numerous challenges. Summarized below are the most frequent issues that have been cited:
1. County Sittings: The national budget is sufficiently vague in describing what county
representatives are to attend the Sitting and how they are selected, which enables the County
Caucus to de facto control the County Council and its Sittings.19 The Caucus often chooses
representatives lacking technical skills or experience, who are grateful to the legislators who
choose them and will pay them their travel fee and per diems, so generally support whatever
projects the legislators propose (if they can even follow the process or are included
meaningfully in decisions). Furthermore, though the SDF was intended to help local areas
impacted by extractive activities at the district level, decisions usually represent the higher-
level interests of the county. As a result, just a few large infrastructure projects such as new
schools and roads are implemented for the county as a whole rather than localized activities
to alleviate the negative impacts of concessions. An additional problem is that Sittings are
political rather than technical events, and lack planning and consultation of needs at the
district level. At Sittings, legislators often list their rough ideas of project costs without prior
research, which are often far from actual costs.
2. Fund disbursement: County and Monrovia respondents overwhelmingly reported that
MFDP does not issue funds to the CDFA, only part of funds requested, and/or with delays
of several years, which prevents projects from being implemented according to plans.20 Such
delays or non-payments also occur due to counties not following protocol for receiving
funds or not filing proper reports accounting for their use of funds under the PPCA, as
required under the PFM Act (whereby the General Audit Commission shuts down funds
while waiting for reports).21 Additionally, some noted that the President has held funds due
to conflicts between the County Superintendent and the County Caucus on their use.22 Since
all revenue is held in the Consolidated Fund and fully fungible with other public funds, the
GoL often is forced to use lingering CSDF funds to cover budget shortfalls. Nonetheless, the
PPCC noted that the MFDP typically has not set aside funds once they have initially
approved them and asked for PPCC approval.
3. PMCs: As the PMC members are elected by the County Council and removable for cause,
they are beholden to the County Legislative Caucus. Their work to cost, account and report
on projects therefore must meet with the approval of legislators. Respondents agreed that the
PMC members are not selected or kept based on their technical expertise but rather their
19
This norm varies across counties however, as some respondents noted that in counties where Superintendents have stronger
connections with the President, the Superintendent has more say in the process and can potentially even outweigh the County
Caucus.
20
For example, the Nimba County Superintendent reported that the MFDP owed his county over US $4 million in funds from the
CSDF in recent years that Nimba had requested but never received.
21
2009 Public Financial Management Act, Section 24 (requiring “[a]ll purchases of goods and services from suppliers, including
capital investments, shall comply with the provisions prescribed in the Public Procurement and Concessions Act of 2005, as
amended, and its enabling regulations.)
22
NRM Coalition respondents explained that President Sirleaf stopped allocation CSDF funds in Rivercess and Maryland
Counties due to executive-legislative conflicts.
12
political loyalty to county legislators. As a result, PMC members with multimillion-dollar

budgets are often run by high school graduates who keep few if any records for fear of
documenting activities in case auditors review them.
4. PMTs: Although the budget law states that PMTs are chosen by local citizens, respondents
said in fact the process is nepotistic, and legislators chose them based on personal
connections and political loyalties. Similar to PMCs, respondents said PMTs often lacked
the necessary skills or experience to run projects and track payments for work done.
5. Role of citizens: Though citizens are officially listed as electing and receiving information
from the PMTs, respondents explained that local citizens are largely uninformed, lack
meaningful participation in project selection at the County Sitting and ongoing project
implementation, and do not receive adequate CSDF benefits. Respondents described
incidents in which the County Caucus ignored the overwhelming wishes of citizens,23 and in
which they attached meeting sign-in sheets to resolutions to get the required signatures
supporting their measures.
6. Role of Superintendent: Unelected and appointed by the President, the Superintendent
should play a key executive role in implementation of county projects. However,
respondents noted that in most counties the Superintendent is overwhelmingly sidelined
mainly to reporting functions in the CSDF, underfunded and may attend only as an observer
at County Sittings. Many questioned that the Superintendent—the highest executive branch
representative in counties—lacks a vote at the Sitting, and neither manages projects nor
reviews fund usage, since these should be executive functions. One respondent noted though
that counties differ depending on the proximity of the Superintendent to the President
(explaining that Superintendents in Grand Bassa and Sinoe Counties had a close relationship
to the President and thus more power in the CSDF).
7. Use of funds: Respondents confirmed numerous media reports finding projects often
unfinished or built in wrong areas, overly expensive or otherwise unhelpful to local areas.24
Though the CSDF requires signatures of multiple parties on resolutions and CDFA
withdrawals, respondents said this was not enough to control the funds’ usage. Additionally,
respondents thought that CSDF activities should be tied into national and county
development agendas in order to ensure planning activities connect with other more
sustainable funding priorities (e.g., schools are built but the Ministry of Education never
planned to allocate a teacher). County officials related that LEITI instituted signs displaying
the amount concessionaires paid to the GoL each year in County Service Centers but no
provided no further information on what was done with the funds. As a result, citizens have
voiced increasing anger at county government for not implementing projects. LEITI noted
that it was supposed to track SDF finance but hasn’t been able to obtain information from
the GoL on either GoL expenses or how much money was sent to the county level. The
General Auditing Commission (GAC) also should be able to provide auditing reports, but
their information isn't updated yearly due to underfunding. Nonetheless, GAC audit reports
—corroborated by citizen complaints—have found that county receipts often do not match
23
For example, community radio journalists in Bong cited the example of the Caucus ignoring a unanimous citizen resolution in
Bong to buy cars for district commissioners and instead only buying them motorcycles, without ever informing the county of the
change.
24
See, e.g., The Bush Chicken. 1 April 2017. “Where Is the Money? ArcelorMittal Says It’s Paying Funds But Bong Says It’s
Not.” by Moses Bailey. URL: http://www.bushchicken.com/where-is-the-money-arcelormittal-says-its-paying-funds-but-bong-
says-its-not/; see also, The Bush Chicken. 12 October 2015. Nimba’s Development Superintendent Reacts to Allegations of
Improper Spending of CDF, by Arrington Ballah. URL: http://www.bushchicken.com/nimbas-development-superintendent-
reacts-to-allegations-of-improper-spending-of-cdf/
13
the amounts companies are required to pay, and that widespread fraud and mismanagement
of CSDF implementation exists in several counties.25
8. Monitoring: Respondents overwhelmingly agreed that monitoring was currently
insufficient. At a national level, the Legislature’s role should be monitoring executive
branch implementation, but as the Legislature is involved with implementation it does little
to no monitoring. PMCs are meant to conduct county-level project monitoring of CSDF
activities, but they also lead county project implementation, so any poor performance or
malfeasance reflects poorly on them. Furthermore, as they are elected by the County Caucus
and serve at its discretion, PMCs are unlikely to scrutinize county legislators. At the District
Level, the District Development Council (DDC) should be able to monitor project
implementation but typically lacks financial support. 26 For its part, the NBC can only
monitor whether concessions and mining activities agree with MDAs between the GoL and
concessionaires.27 Respondents recommended that citizens, CSOs and/or independent
monitors receive information on projects (e.g., costs, blueprints) at the start and during
implementation to ensure better oversight and public transparency.28 Local groups have
increased their demands in recent years for prosecution and restitution of funds as a result of
poor transparency and accountability in funds usage, yet little has been done to prosecute
local officials accused of corruption and mismanagement by the GAC.29
3.5.CSDF Positive Outcomes

Interviews and desk research also revealed examples of positive outcomes under the CSDF.
Although several respondents noted that county sittings were in fact a mirage, at least some
county sitting participants lauded them for providing meaningful participation that successfully
considered citizen viewpoints in developing resolutions.30 Citizen participants to a Gbarpolu
County Sitting, for example, were optimistic about CSDF allotting significant amounts to
construct health clinics across their county.31
Respondents thought some counties such as Nimba County and Grand Kru have enjoyed partial
success from SDF projects.32 In Nimba, each district receives a portion of SDF funds and local
government prioritizes needs with local citizens. As of 2015, almost half of Nimba’s SDF
finance had been allocated to road repair and construction, with the other half supporting smaller
projects and administration costs.33
Many respondents thought a positive outcome has been widespread public understanding about
relevant CSDF issues at local levels, including from CSO trainings on accountability issues.
Additionally, community-based advocacy organizations and District Development Committees
25
SDI, 2010. “Working for development? Extractive industries: Blessing or curse?” URL: http://bit.ly/2ecwXqw
26
The DDC is also referred to as District Development Committee.
27
An Act to Create the National Bureau of Concessions. 23 September 2011. Section 7.
28
However, it was unclear to respondents how to ensure independent or CSO monitors don’t become corrupt themselves in
connection with other CSDF actors.
29
Nyei, I., 2014. Decentralizing the state in Liberia: The issues, progress and challenges. International Journal of Security and
Governance. URL: http://bit.ly/2ekmAVw
30
Front Page Africa, 2016. “Health Prioritized at Gbarpolu County Development Sitting.” URL: http://bit.ly/2dVFyAk
31
Id.
32
Front Page Africa, 2015. Liberia: Investigation Mission Reports On Liberia Social Development Funds. URL:
http://allafrica.com/stories/201509101233.html
33
Id.
14
have enjoyed a resurgence at local levels.34
3.6.Root Causes of Challenges

A few cross-cutting PE issues run throughout the challenges described above. Notably, the root
causes identified in this study are largely the same as those identified in prior LAVI/NRM
Coalition research: pervasive corruption and political infighting; poor planning and oversight;
weak local institutions; and poor collaboration, communication and coordination.35
• Corruption and political infighting are closely linked throughout the CSDF process, with
infighting occurring horizontally and vertically. Horizontally, legislative and executive
branches vie for control of the CSDF. Legislators do not want to let County Superintendents
manage local projects, as s/he could gain local popularity and eventually take their seats.
Additionally, many reported that projects costs far exceed what is actually built, with the
difference likely going to lawmakers and their loyal PMC and PMT members, as well as high
costs paid to construction firms owned by legislators or their friends. For their part, executive
branch respondents claim to want to free the process of politics and thought the executive
should implement the CSDF. However, given the tales of corruption under the Dedicated
Fund Committee, it is possible that at least some members want a return to the power and/or
funds they previously enjoyed. Vertically, counties want more power and funding,
complaining that the MFDP rarely allocates the CSDF funds they request and that were
meant to benefit them. Conversely, central government criticizes counties for not tracking
payments and not sending reports in line with PPCC regulations.
• Poor planning and oversight also plague the CSDF process, from Sittings where legislators
push their ideas without prior consultation of district needs or cost estimates, to weak project
coordination and monitoring by PMCs and PMTs. With the process largely controlled by the
legislative branch, and the executive branch only withholding funds for lack of proper
accounting, objective monitoring is practically nonexistent.
• Weak institutions limit the ability of government and citizens to design, implement and
provide oversight of CSDF projects. In particular, county and district level governments lack
capacity and funding to perform oversight and report on funding (e.g., most offices lack
computers), which could be improved with passage of the Land Governance Act currently in
the Legislature. Despite a lack of general funds for regular subnational government offices,
respondents noted though that the PMC/PMT framework is institutionally heavy, requiring
high operational costs that consume much of the CSDF allocated to counties. At a national
level, the General Auditing Commission (GAC) and the Liberian Anti-Corruption
Commission (LACC) lack sufficient funding to check on expenses and release auditing
reports to the public. Furthermore, the LACC lacks capacity, authority to independently
prosecute cases, and its staff have been accused of corruption themselves.36
34
See, e.g., Front Page Africa. June 2016. “Accountability in Management of County Social Development Fund Strengthened.”
URL: https://frontpageafricaonline.com/index.php/news/4155-accountability-in-management-of-county-social-development-
fund-strengthened
35
See previous research conducted by the NRM Coalition in its July 2017 CSDF Policy Brief #1, “CSDF: The Need to Increase
Citizens’ Involvement in the Management and Monitoring Processes.”
36
See U.S. Department of State, April 8, 2011. “Human Rights Report: Liberia.” Bureau of Democracy, Human Rights and
Labor. 2010 Country Reports on Human Rights Practices. See also, FrontPage Africa, 26 January 2018. “Liberia Anti-Corruption
Chairman Accused of Misapplying Employees’ Salaries” URL: https://www.frontpageafricaonline.com/index.php/news/6736-
15
• Poor collaboration, communication and coordination, closely linked with the above,
prevent government, civil society and citizen stakeholders from contributing to successful
CSDF implementation. Many respondents faulted GoL and County-level communications
programs for not disseminating information on CSDF projects with the public, which would
help enable citizen awareness and participation in project oversight. Additionally, CSOs
recognized they could do more to coordinate and collaborate, including holding more regular
meetings on CSDF and other issues, and working with local radio on broadcasts.
Corruption and political infighting, and weak institutions (especially at the local level) are deeply
engrained in Liberian governance and could require decades to improve. Therefore, this PEA
will focus on addressing two ‘root’ challenges that are more likely to be improved in the short-
term: planning and oversight (via reform options described below); and in parallel,
collaboration, communication and coordination (via work with CSOs and local government
described below).
4.Reform Options
4.1.Develop Stand-Alone CSDF Law
A critical challenge to CSDF county-level management and accountability mechanisms is that
citizens are unclear which policies or legal frameworks govern fund management.37 The CSDF
management guidelines referred to throughout CSDF discussions are publicly unavailable and
were not available for this study. Making matters worse, various policies and legislative acts
governing the CSDF have conflicting citizen participation and management approaches. A 2015
UN Capital Development Fund study found Liberia lacked clear guidelines and procedures for
planning and budgeting; project appraisal and selection; and implementation support and
monitoring.38
For this reason, almost all respondents favored developing a new, unified law to clarify CSDF
terms, actors, processes and roles in a single text for all parties, in addition to incorporating
CSDF policy reforms discussed below. Respondents largely agreed this was critical to prevent
CSDF misuse and facilitate decentralization. If recent legislative processes such as the Land
Rights Act and Local Government Act are any guide, however, developing and passing
comprehensive CSDF law could require several years at a minimum. Despite the longer time
frame required for a CSDF law to pass, it could generate greater public awareness and better
pressure legislators to make needed reforms they may not otherwise support. As comprehensive
new legislation is likely the most ambitious solution, this could be a long-term option to pursue
in parallel with other, shorter-term solutions discussed below.
liberia-anti-corruption-chairman-accused-of-misapplying-employees-salaries
37
The main legal framework governing the CSDF includes the National Budget Act (Section 9), CSDF Management Guidelines,
but related laws include the Public Procurement and Concessions Act, Public Financial Management Act, and National Bureau of
Concessions Act.
38
UNCDF, 2013. Final Evaluation: Liberia decentralization and local development programme local development fund
component. URL: http://www.uncdf.org/article/3179/liberia-decentralization-and-local-development-programme--local-
development-fund-component
16
4.2.Reform PFM Act to allow SDF to go directly to counties

As explained above, the 2009 PFM Act requires all public funds to be merged into a centrally-
held Consolidated Fund, managed as a Treasury Single Account (TSA).39 This makes CSDF
funds fungible with all other public funds and easily used by the MFDP to cover budget
shortfalls when there are delays on county allotments. Revising the PFM Act would allow all or
some portion of CSDF payments to come directly to county accounts for use on projects.
Two of the four legislators interviewed thought it was necessary and feasible to reform the PFM
Act to allow funds to go directly to county accounts, or otherwise into a separate escrow account
that could only be accessed by counties. Legislators said they could either sponsor a bill to revise
sections of the PFM Law to enable direct payment of CSDF funds to counties, requiring a
separate revision of Budget Law Section 9, or make both changes in a single comprehensive
CSDF law (as discussed above). Though necessary to amend the PFM Act provisions, legislators
thought that if attempted alone it could face opposition and lack publicity to gain public support
for passage. The MFDP’s Non-State Actors Secretariat (NSAS) has been engaged in PFM issues
including considering PFM Act reform, and respondents thought it could serve as an ally in this
effort.40
MFDP respondents noted however that once funds enter county accounts, there would be no way
to check whether counties meet requirements under the PPC Act or other laws, since they could
simply sign and receive funds anytime. As such, MFDP respondents thought a change in the
PFM would not address the problem of funds’ misuse and embezzlement. Also, the Ministry of
Finance noted that President Sirleaf requested the Legislature in 2009-2010 to allow community
control of SDF funds via the executive branch, but this was removed (legislators argued that
communities could not oversee the funds).41
4.3.Improve transparency of CSDF fund use

Many respondents cited a lack of government financial information as limiting public monitoring
and transparency on the flow and use of CSDF funds. Legislation requiring the MFDP to
publicize CSDF financial information, such as in a new CSDF law and/or revisions to existing
law (PFM Act and/or Budget Approval Act), could help ensure greater CSDF transparency. With
this information, citizens, CSOs, media and autonomous government agencies such as LEITI and
the GAC would be able to play a more effective role in tracking and oversight of where CSDF
funds have gone and how they have been used, limiting the potential for embezzlement or misuse
of funds. However, this option would need further research unless enacted with or following
PFM Act reform as described above, as GoL respondents warned that the fungibility of
consolidated revenues in the TSA complicates the ability to track CSDF funds.
CSO respondents suggested that citizens, CSOs and/or independent monitors should receive
information on projects (e.g., costs, blueprints) at the start and during implementation to allow
them to better monitor and ensure public transparency. However, it was unclear how to ensure
39
Public Financial Management Act 2009, Section 34. (explaining that “the banking arrangements of government will reflect, to
the extent possible, the principles of a Treasury Single Account, in which all accounts of central government are essentially
managed as one from a cash point of view”).
40
The NSAS is part of the Integrated Public Financial Management Reform Project (IPFMRP).
41
Min. of Finance, Dept. of Budget & Devt. Planning. 2 March 2018.
17
either independent or CSO monitors do not themselves become complicit with corrupt legislators
or local CSDF actors. LEITI suggested ‘mainstreaming’ its work by requiring all GoL Agencies
to publish financial data every year on their website, with which LEITI could provide a
centralized list of links to their data. Respondents also suggested re-introducing something
similar to County Development Agendas—four-year development priority plans developed in
2008 by the Governance Commission in collaboration with the Ministries of Internal Affairs and
Planning and Economic Affairs—to organize planning of CSDF funds.
4.4.Split CDF and SDF

Many respondents thought that the CSDF should be re-divided into CDF and SDF (with SDF
managed locally and CDF by the Legislature) in order to separate decision-making, improve
fund management, and enable better safeguards and traceability via audits. Several thought that
accountability would improve with locally decentralized SDF management, and noted that
management would improve as the different funds’ sources and goals required different
treatments.42 Many agreed that merging funds prioritized bigger projects at the county level,
because counties had more cash flow to spend on major projects that.43 Though some saw this as
a disadvantage to impacted counties promised concession funds, others argued that the county as
a whole should benefit from larger projects possible with merged funds, not just small projects
for certain districts or communities. Moreover, they argued that splitting funds would create too
much administrative paperwork and bank charges for small impacts. Such respondents generally
also thought splitting funds alone wouldn’t improve monitoring, management or fund
disbursement, and noted that if the SDF came straight to the county it could be captured by a
new clique of actors (e.g., Superintendent, PMC, PMT, DDC).
Based on the general consensus of respondent views, splitting the SDF and CDF would have
both advantages and disadvantages, and does not seem to be a top priority in itself at this point.
However, a split in the funds is likely to occur by function of other more important changes (as
described in other sections) that are more likely to improve fund governance and long-term
outcomes for Liberia’s counties. If split, most likely the GoL would continue to manage the
CDF, and the SDF could go in a separate escrow account with options for its management. Three
such options are discussed below with examples from other African country mineral revenue
distribution mechanisms, each with its own advantages, disadvantages, and lessons.
• Companies manage and implement SDF-funded projects directly, with the GoL and
CSOs monitoring compliance. Such projects would resemble voluntary CSR projects with
the exception that they are legally required under MDAs between the GoL and each
concessionaire. To ensure transparency and enable monitoring, at a minimum detailed
information should be publicized from MDAs, financial flows and ongoing project
information, and national- and/or county-level guidelines established to govern project
implementation. As an example of this model, since 2016 a public-private partnership
42
Notably, this includes the Presidentially-appointed District Development Committee and District Development Commissioner,
as well as the District Development Council, a body of community leaders in some districts. Additionally, the National Bureau of
Concessions is responsible for monitoring concessions and could monitor SDF management at the county level but not via the
current CSDF process of County Council management.
43
On a related note, the former Minister of Fiscal Affairs from MFDP explained that counties with small SDF allotment that have
split funds equally across districts general end up with small, ineffective projects, but those with large SDF allotments like Nimba
and Bang still can split funds equally and have meaningful projects.
18
between 15 mining companies, the Government of Democratic Republic of Congo, EITI, and
GIZ established region-specific Mining Sector CSR Guidelines and is working to improve
mining sector financial management, transparency and accountability.44 Though this option
would likely encounter fewer problems from corruption, mismanagement and funds not
reaching counties, it would rely on foreign companies and donors to do the work of the
Liberian Government rather than develop sustainable national governance systems.
• Executive Branch manages the SDF via a committee or autonomous agency, with the
Legislature and CSOs conducting monitoring. As the Dedicated Fund Committee of the
original SDF faced criticism for embezzling funds and lack of accountability, a multi-party
agency or committee with government, civil society and concessionaire representation may
be a better option for SDF management. Ghana provides an example of this model, as the
country has used executive branch-led ministerial committees and governing boards to
oversee implementation of the Mining Development Fund Law since it first implemented a
Minerals Development Fund (MDF) in 1992.45 The MDF aimed to redistribute part of
mineral revenues to communities in close proximity with mining activities through District
Assemblies and Traditional Authorities. Evaluations of its initial performance found that
municipalities used funds for general development rather than helping affected communities,
and local chiefs used funds for personal activities. The MDF’s challenges have been blamed
on institutional weaknesses and power inequalities,46 as well as on its lack of a clear
legislative framework for how funds should be spent.47 A new MDF Act in 2016 created a
high-level governing board with government, private sector and limited stakeholder
representation.48 The MDF’s new statutory standing could ameliorate previous defects by
clarifying fund management and governing board operation, but the fact the President
appoints all members of the Board suggests opportunities for mismanagement.49
• SDF funds are allocated directly to a local account. The CSDF can correct for criticisms
of slow and incomplete fund disbursement by allocating funds directly to a local account,
which can be managed either by existing subnational government units or central government
representatives permanently posted at subnational levels. Under the first option where county
and district-level government, councils and/or chiefs manage funds, monitoring and oversight
from Monrovia would be critical for fund accountability. Alternatively, central government
representatives (such as from MFDP, PPCC and MIA) could be based at county level to
improve efficiency, accountability and oversight of fund management. However, this likely
would require a legislative reform such as the Local Government Act (currently still under
debate), so is not likely to be a quick solution. Under either scenario, financial flows likely
would be simpler to track by central government. The Sierra Leone Diamond Area
44
See GIZ, “Support for good governance in the mining sector.” URL: https://www.giz.de/en/worldwide/19891.html
45
Quarshie, A.N.K. 2015. “Mining and Development in Ghana: A Case Study of the Mineral Development Fund in the Obuasi
Municipal Assembly.” University of Ghana. URL: http://ugspace.ug.edu.gh/handle/123456789/21259
46
Id. See also, Aye, J, et al. 2011. “Political Economy of the Mining Sector in Ghana.” World Bank Policy Research Working
Paper 5730
URL: http://documents.worldbank.org/curated/en/309711468031496273/pdf/WPS5730.pdf
47
Danso, F. (2017), Transparency and Accountability in Ghana's Mining Sector: Is it Real or Fiction? Vol. 6 No. 11, pp. 1587-
1609. URL: https://isdsnet.com/ijds-v6n11-7.pdf
48
Minerals Development Fund Act, 2016 Act 912, Section 6 “Governing Body of the Fund.” URL:
http://gheiti.gov.gh/site/index.php?option=com_phocadownload&view=category&download=284:mineral-development-fund-
act-2016-act-912&id=40:acts-a-policy-documents&Itemid=54
49
Id., at Section 6(2).
19
Community Development Fund (DACDF) provides an example of the first scenario, where a
government attempt to channel mineral revenues back to communities from where minerals
were discovered was managed by local levels but without direct central government
management. In the DACDF, the central government made payments via check directly to
local chiefs and later to local councils, in both cases with little support, community
participation, transparency or oversight, leading to widespread embezzlement both at central
and community levels.50 A key lesson from the DACDF is that central government needs to
play a role in supporting decentralization with oversight to ensure accountability, and
equitable participation and benefit distribution.51
4.5.Reform National Budget Law

Notwithstanding the promise of decentralization and devolution of power from central
authorities with the creation of the CSDF, the current budget law has appropriated to each
County Legislative Caucus an unprecedented level of control over its implementation, as
opposed to the county authorities. Revising Section 9 (applicable to the CSDF process) of the
budget law could provide the quickest albeit most temporary solution to several of the key CSDF
challenges described above. As the budget law is passed annually and the text undergoes changes
each year, its revision would enable legislators to make temporary improvements to the CSDF
while buying time to develop other more permanent legislative solutions. Budget law reform
options such as the examples below should be considered carefully to prevent perverse outcomes
and balance power between executive and legislative, and central and local levels. 52
• Districts conduct needs assessment prior to County Sittings: The CSDF process presently
includes little to no consultation or planning with districts of their needs, and most
discussions occur in an unorganized manner at County Sittings. By ensuring County
Councils consider the choices of District Councils (with participation of citizens and District
Development Committee representatives), the CSDF would represent local rather than only
county-level needs.
• Districts choose representatives to County Sittings: Currently the County Caucus has de
facto power over who attends Council Sittings, typically choosing unqualified citizens who
are either afraid to not receive their per diem or cannot represent their district’s interests well.
With safeguards in place to ensure the County Caucus does not influence Districts’ choice of
representatives, allowing District Councils to choose their own representatives to Sittings
will increase meaningful local representation at Sittings.
• Give CSOs and County Superintendent a more meaningful role at Sittings: CSOs and
Superintendents only are allowed to observe County Sittings, but both are key county-level
voices. Where CSOs represent community interests (rather than participate in monitoring or
50
R. Maconachie. 2012. The Diamond Area Community Development Fund: Micropolitics and community-led development in
post-war Sierra Leone. In High-Value Natural Resources and Peacebuilding, ed. P. Lujala and S. A. Rustad. London: Earthscan.
URL: https://environmentalpeacebuilding.org/assets/Documents/LibraryItem_000_Doc_102.pdf
51
Binningsboe, H. & Dupuy, K. 2010. “The Diamond Area Community Development Fund: Implementing a Wealth Sharing
Policy in Sierra Leone.” International Studies Association. URL:
http://citation.allacademic.com//meta/p_mla_apa_research_citation/4/1/6/6/7/pages416678/p416678-1.php
52
See also, Liberia Governance Commission 2015 Roundtable and presentation of GC research on “Local Development
Financing in Liberia: Legislating Sustainable Budget Systems for Decentralized Governance.” URL:
http://governancecommissionlr.org/others.php?&7d5f44532cbfc489b8db9e12e44eb820=NTU0
20
other activities that limit their ability to represent communities), they could play a greater
deliberative role in County Sittings. Similarly, in addition to Superintendents playing a
greater executive role in the CSDF (as outlined in other options here) they could play a
greater role in County Sittings such as by providing technical inputs to decisions.
• Appoint PMCs & PMTs based on capacity: Legislators largely choose PMC and PMT
positions based on those who will support their decisions, resulting in loyal members lacking
technical skills and experience. Revised text could provide guidelines requiring successful
applicants to have a threshold level of education and years of experience in the relevant field,
and potentially pass interviews and/or skills test, with County Superintendent and District
Commissioner selecting respective PMC and PMT finalists.
• Expand role of Superintendent in CSDF management and oversight: The County

Superintendent has a minor role in the current CSDF mechanism, mainly as co-signer on
County Council resolutions and reviewing PMC status reports. As the main county-level
executive branch representative, the Superintendent should be directly engaged at all stages
from reviewing project design and implementation to overseeing financial documentation
and monitoring (discussed below).
• Enable Executive and CSOs to conduct monitoring: Little monitoring currently occurs on
CSDF projects, as the executive branch lacks funding to monitor and CSOs are not allowed
or given relevant information to do so. If the County Caucus continues its involvement in
County Sittings, then at a minimum the executive should be empowered and receive finance
to monitor CSDF activities.53 Additionally, CSOs (those not representing communities or
doing CSDF advocacy already) should receive information on CSDF project selection and
funding, and central government should receive, review and publicize CSO monitoring
reports to improve local CSDF project accountability.
National budget law reform (and most other legislative reforms addressed here) will require
sufficient political will for a majority of legislators to pass it. Besides developing public pressure
at the county and national levels through citizen awareness and advocacy campaigns, likely
reformers will need to work to “logroll” votes from legislators in counties currently not receiving
much SDF money. One option could be to redistribute some SDF from counties currently
hosting extractive activities to other counties to gain their votes. This also could be attractive to
countries currently receiving most of the SDF money (i.e., Bong, Nimba and Grand Bassa), as in
the future they would gain funds from new mineral discoveries in other counties when they may
have less extraction themselves. In parallel, a CDF distribution formula (based on population,
service demand and development level) that replaces the equal allocation of US $200,000 to each
county could help leverage votes and would be fairer to larger counties with more population. A
third option would be to include domestic artisanal mining in the SDF revenue base, as it is
currently not taxed but generates millions of dollars annually.
4.6.Direct Dividend Payments

53
Deputy Director General Dickson Yarsiah of the National Board of Concessions (NBC) noted that the NBC can monitor local
use of funds related to concessions, but currently it is unable to monitor such usage under the legislatively-controlled CSDF
framework. Additionally, the Office of Ombudsman created in March 2017 could be used to receive and investigate complaints
of violations of the Code of Conduct related to the CSDF. See, Executive Order No. 83 Pertaining to the Office of Ombudsman.
13 March 2017. URL: http://www.emansion.gov.lr/doc/Executive%20Order%20_83.pdf
21
Although not widely considered in Liberia or tested in other African country mineral revenue
sharing systems, another reform option is to allocate earmarked Social Development Funds to
citizens residing in concessions areas via cash transfers (hereafter Direct Dividend Payments, or
DDPs) of earmarked resource revenues. 54 Outside of mineral revenues alone, examples exist of
national development programs making payments to the poorest citizens in 70 countries
including 35 in Africa—often using targeting, biometrics, national identification cards, unified
registries, and mobile banking—and with generally high impacts and cost effectiveness for
targeted outcomes.55, 56 The two most famous examples of mineral revenues DDPs to citizens are
the Iran Citizens Income Scheme57 and the Alaska Permanent Fund (APF).58 In recent years,
various experts have encouraged African countries to channel mineral revenues via DDPs to
affected local citizens.59 This could be a compromise to improve outcomes and minimize risk
from government corruption while still keeping the program GoL-run, as opposed to letting
concessionaires manage the entire SDF program. Potential disadvantages of DDPs include their
lack of sustainability (given their variation with mineral revenues), focus on personal
consumption instead of long-term infrastructure development, and small size of individual
disbursements when divided across all citizens in a given county or affected area.
4.7.Intergovernmental Fiscal Transfers

A second related policy option would be to transfer Figure 2: Liberian natural resource revenue
mining revenue to local government programs (i.e., projections compared with health financing gaps
intergovernmental fiscal transfers, or IFTs) such as
health or education that would directly help local
citizens while avoiding the risks inherent in designing
and developing infrastructure projects. IFTs would have
the advantage of avoiding complicated selection, design
and implementation of discrete projects controlled by
multiple project management teams, in turn controlled
by legislators, and lacking accountability or monitoring.
Instead, funds would be channeled into the budgets of
existing county and district governments that would
54
Only one respondent recommended DDPs (also referred to as unconditional cash transfers) as a policy reform for the Social
Development Fund. See Zayzay, A. M. 2015. “Cash Transfers From Mineral Resources: A Policy Option for Liberia.” URL:
https://www.linkedin.com/pulse/cash-transfers-from-mineral-resources-augustus-m-zayzay/
55
See, Giugale, M. 2016. “Freedom from Poverty: New Directions in Economic Development.” In 2016 Index of Economic
Freedom, at 30. URL: https://www.heritage.org/index/pdf/2016/book/chapter3.pdf See also, Naqvi, M. 13 May 2013. “Prospect
for Ending Poverty,” 3 Quarks Daily. URL: http://www.3quarksdaily.com/3quarksdaily/2013/05/wealth-to-the-people-end-
poverty-tomorrow.html#maniza
56
But see Handa, S, et al. 2014. Are Cash Transfers a Silver Bullet? Evidence from the Zambian Child Grant, Innocenti Working
Paper No.2014- 08, UNICEF Office of Research, Florence. URL:
https://pdfs.semanticscholar.org/e50d/fc303f0f42512ba32f753ec05fc3e6cb5870.pdf (“Even an unconditional cash transfer
programme with a wide range of impacts does not produce effects for all outcomes, suggesting that complementary programmes
to achieve specific outcomes will still be necessary even in the most successful cases.”)
57
See Tabatabai, H. “From Price Subsidies to Basic Income: The Iran Model and its Lessons,” in Karl Widerquist and Michael
Howard (eds.), Exporting the Alaska Model: Adapting the Permanent Fund Dividend for Reform around the World, New York:
Palgrave Macmillan, 2012, pp. 17-32. URL: http://www.bien2012.org/sites/default/files/paper_156_en.pdf
58
See Jones, D. and Marinescu, I.E. 2018. The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from
the Alaska Permanent Fund. URL: https://ssrn.com/abstract=3118343.
59
See, e.g., Naqvi, M. 10 June 2013. “What do Iran and Alaska Have in Common?” 3 Quarks Daily. URL:
http://www.3quarksdaily.com/3quarksdaily/2013/06/what-do-iran-and-alaska-have-in-common.html. See also, Nair, A. 2012.
“Evaluating the Case for Cash Transfers of Resource Revenues in Sierra Leone.” Center for Global Development. URL:
https://www.cgdev.org/doc/Initiatives/Oil2Cash/Arvind_SL_final.pdf.
22
have to account for spending the funds on underfunded programs to help local citizens, with
traditional government oversight and auditing. Recent research has recommended IFTs for
distribution of benefits in African countries projected to receive windfall oil, gas and mineral
revenues, including Liberia. As Error: Reference source not found demonstrates, Liberia’s health
financing needs could be substantially supported by natural resources revenues via innovative
health funding in the form of IFTs.60 Like DDPs, as commodity revenues can fluctuate
significantly with global markets, both IFTs need to be designed carefully to avoid ‘boom and
bust’ cycles of subnational or individual spending, and should consider PE issues.61
5.Recommendations for LAVI

5.1.Entry Points
Depending on the option(s) pursued above, reform advocates should consider how to best
position advocacy efforts in light of Liberia’s evolving PE context in order to correct its failures
while building on its limited positive outcomes so far. This applies to advocacy across Liberian
society to increase public awareness and shape opinion on CSDF issues, but in particular in
relation to the executive and legislative branches where reforms must take place.
Opportunities with Legislature

Most legislators interviewed supported reform, with only one opposing reform.62 Advocates can
address the challenge of legislators with powerful committee positions opposing CSDF reform
by engaging other committee members and potentially by raising public awareness and pressure
in the legislators’ home district. However, in order to avoid hardening legislative opposition to
CSDF reform, advocates should approach all legislators with objective evidence and the
assumption that they may be open to supporting such reform.
Given that President Weah’s Congress for Democratic Change (CDC) political party has a
majority in the Legislature, CSDF reform advocates can pursue the same appeal to a ‘Pro-Poor’
agenda there as with the executive branch (discussed below). Additionally, advocates may
continue to promote reforms with legislators who signed pledge cards during their candidacy and
since taking office to encourage them to work as champions of CSDF reform. Finally, CSDF
reform should be seen as complementary to and harnessed with efforts to pass the Local
Government Act. The July 2017 version of the Local Government Act (LGA) draft bill, still
under consideration by the legislature, includes provisions for devolving greater authority in
funds management to the county, specifically including:
 Central government to transfer to county governments their MDA annual contributions

 MFDP to issue a timetable for disbursing funds to counties.
 Local governments to adopt Code of Conduct, anti-corruption standards and regulations,
60
Witter, S. and Jakobsen, M. July 2017. “Choices for spending government revenue New African oil, gas, and mining
economies.” UNU/WIDER Working Paper 2017/150, at 6. URL:
https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2017-150.pdf
61
See generally, Natural Resource Governance Institute & United Nations Development Programme. 2016. “Natural Resource
Revenue Sharing.” URL: https://resourcegovernance.org/sites/default/files/documents/nrgi_undp_resource-sharing_web_0.pdf
62
Legislators’ levels of influence were based on seniority, party and relevant committee positions.
23
and transparency and accountability standards.63
Opportunities with Administration

All executive branch or independent agency officials interviewed found faults with the current
CSDF structure and favored reform, though a few were more cautious regarding tackling
reforms.64 As such, all agencies may be seen generally as allies of CSDF reform. However,
reform should ensure a balance in power between executive and legislative branches to prevent
power over the CSDF from becoming overly concentrated in the executive.
With the executive branch, CSDF reform can aim to capitalize on the ‘Pro-Poor’ agenda declared
by President Weah in his inauguration speech for his new administration.65 Although this agenda
has not been fully articulated, in his speech President Weah noted “an overwhelming
mandate . . . to end corruption in public service.”66 Advocates can promote CSDF reform by
making the case that improving local governance, delivering funds to local populations, and
eliminating opportunities for embezzlement and misuse of funds are the best means to implement
a Pro-Poor Agenda. CSDF reform should be fostered in light of the goals of the 2011 National
Policy on Decentralization and Local Governance, including its call for continuous monitoring
and evaluation and “to advance further measures for strengthening the [decentralization]
process.”67 Additionally, advocates could highlight more successful benefit-sharing outcomes
from other sectors as lessons for CSDF reform to the executive branch. For example, several
respondents noted communities generally enjoy greater participation in Liberia’s forest
governance structure, such as being able to open and manage their own fund to receive payments
from concessions impacting them.68
Opportunities with Local Government

CSDF reform advocates can also work with local governments (e.g., County Superintendents,
District Commissioners) to develop channels of collaboration and communication with central
government, concessionaires, citizens, CSOs and local media. Activities could include joint
monitoring, assisting local governments with project or finance information, and developing
project ideas together.
Concession/MDA review
In light of the 2018 MDA review of negotiated agreements between GoL and Concessionaires,
concessionaires may present another entry point. As many concessionaires are increasingly
frustrated by seeing their funds not reach impacted communities, CSDF reform advocacy may be
able to leverage concessionaires to pressure the GoL to improve CSDF performance. This
pressure from concessionaires could in turn help pressure the GoL to both improve executive
branch allocation of funds to counties via the MFDP, and to insist on CSDF reform from the
legislature. However, as concessionaires received a favorable reduction in their negotiated dues
to Liberia under their previous MDAs, they may not care to pressure the GOL too forcefully.
63
Local Government Act, July 17, 2017 Draft Bill.
64
Executive entities’ levels of influence were based on power of agency to shape political will and CSDF-related decisions.
65
The Patriotic Vanguard, 24 Jan 2018. “Liberia: President George Weah’s inauguration speech,” URL:
http://www.thepatrioticvanguard.com/liberia-president-george-weah-s-inauguration-speech
66
Id.
67
Liberia Governance Commission. January 2011. National Policy on Decentralization and Local Governance, Section 1.6.
68
However, communities only receive 30% of fees, with another 30% allocated to counties and 40% to central government. See
Forest Reform Act 2006, Chapter 14.
24
CSOs
Respondents reported that some CSOs’ work is not based on solid evidence or is political (even
taking donations from political parties in exchange for political advocacy), both of which
undermine their advocacy efforts. CSOs can strengthen their roles in CSDF reform by focusing
on improving their evidence-based advocacy and on collaborating with local and national
governments. In particular, CSOs (at local levels especially) would benefit by improving their
technical understanding of CSDF financial and management intricacies, mining operations,
MDAs and development projects. Additionally, CSOs need to articulate their interventions with
regard to CSDF issues so that groups conducting independent monitoring are separate from those
conducting advocacy and working with local governments and communities. To this end, NRM
Coalition members and other CSO representatives proposed potential individual roles on CSDF
reform, which should be confirmed and used to articulate a strategy for a CSO effort. Finally,
CSOs should share information between national, county and district-levels, as frequently they
exist on separate planes lacking key information from other governance levels.
5.2.Next Steps
Advocates of CSDF reform face a multitude of policy options to improve the system’s
accountability, participation and overall governance, and ultimately ensure benefits reach
citizens affected by extraction activity impacts. Before pursuing any reforms, advocates would
benefit by evaluating and discussing options as a group, then prioritizing those which make sense
to pursue immediately versus those requiring a longer-term approach or more consideration. This
review finds that national budget law reform (as outlined in Section 4.5) presents an area for the
most immediate—albeit most temporary—suite of reforms given that it is annually revised and
sets out most of the current CSDF process. Longer-term options such as a standalone bill (as
discussed in Section 4.1) will require drafting proposal text as early as possible to discuss with
legislators and sensitize the public, in order to develop support. However, the urgency to develop
final legislation to solve the CSDF should not outweigh the need for reflection on all policy
options (including previously unconsidered options such as direct payments and
intergovernmental transfers) and reach a general consensus on what is most essential and
practical in the Liberian context.
25
6.Annex 1: Bibliography
Article, Books, Reports:
Aye, J, et al. 2011. “Political Economy of the Mining Sector in Ghana.” World Bank Policy
Research Working Paper 5730. URL:
http://documents.worldbank.org/curated/en/309711468031496273/pdf/WPS5730.pdf
Bailey, Moses. 1 April 2017. “Where Is the Money? ArcelorMittal Says It’s Paying Funds but
Bong Says It’s Not.” The Bush Chicken. URL: http://www.bushchicken.com/where-is-the-
money-arcelormittal-says-its-paying-funds-but-bong-says-its-not/;
Ballah, A. 12 October 2015. “Nimba’s Development Superintendent Reacts to Allegations of

Improper Spending of CDF,” The Bush Chicken. URL: http://www.bushchicken.com/nimbas-
development-superintendent-reacts-to-allegations-of-improper-spending-of-cdf/
Binningsboe, H. & Dupuy, K. 2010. “The Diamond Area Community Development Fund:
Implementing a Wealth Sharing Policy in Sierra Leone.” International Studies Association.
URL:
http://citation.allacademic.com//meta/p_mla_apa_research_citation/4/1/6/6/7/pages416678/p416
678-1.php
Danso, F. (2017), Transparency and Accountability in Ghana's Mining Sector: Is it Real or

Fiction? Vol. 6 No. 11, pp. 1587-1609. URL: https://isdsnet.com/ijds-v6n11-7.pdf
DFID, July 2009. “Political Economy Analysis How To Note.” URL:

https://www.odi.org/sites/odi.org.uk/files/odi-assets/events-documents/3797.pdf
Front Page Africa, 2016. “Health Prioritized at Gbarpolu County Development Sitting.”
http://bit.ly/2dVFyAk
Front Page Africa. June 2016. “Accountability in Management of County Social Development
Fund Strengthened.” URL: https://frontpageafricaonline.com/index.php/news/4155-
accountability-in-management-of-county-social-development-fund-strengthened
Giugale, M. 2016. “Freedom from Poverty: New Directions in Economic Development.” In 2016
Index of Economic Freedom, at 30. URL:
https://www.heritage.org/index/pdf/2016/book/chapter3.pdf
GIZ, “Support for good governance in the mining sector.” URL:

https://www.giz.de/en/worldwide/19891.html
Handa, S, et al. 2014. Are Cash Transfers a Silver Bullet? Evidence from the Zambian Child
Grant, Innocenti Working Paper No.2014- 08, UNICEF Office of Research, Florence. URL:
https://pdfs.semanticscholar.org/e50d/fc303f0f42512ba32f753ec05fc3e6cb5870.pdf
26
Jones, D. and Marinescu, I. E. 2018. The Labor Market Impacts of Universal and Permanent
Cash Transfers: Evidence from the Alaska Permanent Fund. URL:
https://ssrn.com/abstract=3118343.
Liberia GC, 2015. Local development financing in Liberia: Legislating sustainable budget
systems for decentralized governance. Presentation at roundtable on the relevance/importance of
County Development Fund. http://bit.ly/2dzQ4rW
Liberia Governance Commission 2015 Roundtable and presentation of GC research on “Local

Development Financing in Liberia: Legislating Sustainable Budget Systems for Decentralized
Governance.” URL: http://governancecommissionlr.org/others.php?
&7d5f44532cbfc489b8db9e12e44eb820=NTU0
Nair, A. 2012. “Evaluating the Case for Cash Transfers of Resource Revenues in Sierra Leone.”
Center for Global Development. URL:
https://www.cgdev.org/doc/Initiatives/Oil2Cash/Arvind_SL_final.pdf.
Naqvi, M. 10 June 2013. “What do Iran and Alaska Have in Common?” 3 Quarks Daily. URL:
http://www.3quarksdaily.com/3quarksdaily/2013/06/what-do-iran-and-alaska-have-in-
common.html.
Naqvi, M. 13 May 2013. “Prospect for Ending Poverty,” 3 Quarks Daily. URL:
http://www.3quarksdaily.com/3quarksdaily/2013/05/wealth-to-the-people-end-poverty-
tomorrow.html#maniza
Natural Resource Governance Institute & United Nations Development Programme. 2016.
“Natural Resource Revenue Sharing.” URL:
https://resourcegovernance.org/sites/default/files/documents/nrgi_undp_resource-
sharing_web_0.pdf
NRM Coalition, July 2017. CSDF Policy Brief #1 “CSDF: The Need to Increase Citizens’
Involvement in the Management and Monitoring Processes.”
Nyei, I. 2011. Liberia Decentralization Policy: a roadmap to participatory governance and

development inLiberia. http://www.ibrahimnyei.blogspot.com/2011/08/liberia-decentralization-
policy-roadmap.html
Nyei, I. 2014. Decentralizing the state in Liberia: The issues, progress and challenges.
International Journal of Security and Governance. URL: http://bit.ly/2ekmAVw
Quarshie, A.N.K. 2015. “Mining and Development in Ghana: A Case Study of the Mineral
Development Fund in the Obuasi Municipal Assembly.” University of Ghana. URL:
http://ugspace.ug.edu.gh/handle/123456789/21259
Quato, B. 13 August 2015. “How Liberia’s County Development Fund Works.” The Bush
Chicken (Op-Ed). URL: http://www.bushchicken.com/how-liberias-county-development-fund-
works/
27
Quato, B. 13 August 2015. “How Liberia’s County Development Fund Works” Op-Ed. URL:
http://www.bushchicken.com/how-liberias-county-development-fund-works/
Maconachie, R. 2012. The Diamond Area Community Development Fund: Micropolitics and
community-led development in post-war Sierra Leone. In High-Value Natural Resources and
Peacebuilding, ed. P. Lujala and S. A. Rustad. London: Earthscan. URL:
https://environmentalpeacebuilding.org/assets/Documents/LibraryItem_000_Doc_102.pdf
SDI. 2010. “Working for development? Extractive industries: Blessing or curse?” URL:
http://bit.ly/2ecwXqw
Siakor, S., et al. 2010. Friends of Earth Europe. “Working for development? ArcelorMittal's
mining operations in Liberia.” URL:
http://www.foeeurope.org/sites/default/files/publications/foee_working_for_development_0610.
pdf
Tabatabai, H. “From Price Subsidies to Basic Income: The Iran Model and its Lessons,” in Karl
Widerquist and Michael Howard (eds.), Exporting the Alaska Model: Adapting the Permanent
Fund Dividend for Reform around the World, New York: Palgrave Macmillan, 2012, pp. 17-32.
URL: http://www.bien2012.org/sites/default/files/paper_156_en.pdf
The Patriotic Vanguard, 24 January 2018. “Liberia: President George Weah’s inauguration
speech,” URL: http://www.thepatrioticvanguard.com/liberia-president-george-weah-s-
inauguration-speech
UNCDF. 2013. Final Evaluation: Liberia decentralization and local development programme
local development fund component.
USAID. Applied Political Economy Analysis (PEA) Field Guide, 4 February 2016. URL:
https://www.usaidlearninglab.org/library/applied-political-economy-analysis-field-guide
USAID. March 2013. “An Evaluation of the National Democratic Institute (NDI) Legislative
Strengthening Program in Liberia.” URL: http://pdf.usaid.gov/pdf_docs/pdacy481.pdf
USAID. September 2016 “Lessons Learned Using USAID’s Applied Political Economy
Analysis Framework.” URL: http://pdf.usaid.gov/pdf_docs/PA00MBFT.pdf
USAID/LAVI. 26 January 2018. A County Social Development Fund Strategy.
USAID/LAVI. October 2016. Liberia’s County and Social Development Funds Desk Review.
Waites, A., July 2017. The Beginner's Guide to. Political Economy Analysis. (PEA). National
School of Government. International (NSGI). URL:
http://sclr.stabilisationunit.gov.uk/publications/the-national-school-of-government-international-
series/1248-the-beginners-guide-to-pea-1/file
Witter, S. and Jakobsen, M. July 2017. “Choices for spending government revenue New African
oil, gas, and mining economies.” UNU/WIDER Working Paper 2017/150, at 6. URL:
28
https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2017-150.pdf
Zayzay, A. M. 2015. “Cash Transfers from Mineral Resources: A Policy Option for Liberia.”
URL: https://www.linkedin.com/pulse/cash-transfers-from-mineral-resources-augustus-m-
zayzay/
Legislation of Liberia:
Executive Order No. 83 Pertaining to the Office of Ombudsman. 13 March 2017.
Forest Reform Act 2006.
National Policy on Decentralization and Local Governance 2011. Liberia Governance

Commission.
Local Government Act, July 17, 2017 Draft Bill.
National Budget Approval Act FY 2006-2007
National Budget Approval Act FY2006/07
National Budget Approval Act FY2015/16.
National Budget Approval Act, FY 2012-2013.
National Bureau of Concessions Act.
Public Financial Management Act 2009.
Public Financial Management Act 2009.
Public Procurement and Concessions Act of 2005, amended 2010.
Legislation of Other Countries:
Ghana Minerals Development Fund Act, 2016 Act 912, Section 6 “Governing Body of the
Fund.” URL: http://gheiti.gov.gh/site/index.php?
option=com_phocadownload&view=category&download=284:mineral-development-fund-act-
2016-act-912&id=40:acts-a-policy-documents&Itemid=54
29
7.Annex 2: Interviews
Civil Society Organizations
Jimmy Shilue Executive Director/P4DP
Eddie Jarwolo Team Leader, NAYMOTE
Moses Bailey County Coordinator, Bong/NAYMOTE
Lormah Baysah Executive Director/ RHRAP
Peter Dolo Project Manager/DEN-L
Harold Aidoo Executive Director/IREDD
Sam Kruah County Coordinator, Nimba/IREDD
Frances Greaves President/NACCSOL
James Yarsiah Executive Director/RRF
Ralph Jimmeh Project Manager/LMC
Anderson Miamen Executive Director/CENTAL
Augustine Tamba President/Federation of Liberian Youth
David Flomo Executive Director/CUPPADL
Cecelia Danuweli Coordinator/Publish What you Pay
Eric Duoe County Coordinator, Rivercess/SDI
Alfred Quayjandi County Coordinator, Cape Mount/RHRAP
Benedict Quato Executive Director, Hope Alliance Liberia (HAL)
Joseph Kerkulah Journalist, Radio Kergheamahn Journalist, Nimba County
Ruben Dolo Journalist, Radio Super Bonghese, Bong County
Prince U. Wonplu Journalist, Radio Gbehzohn
30
National Government
Samora Wolokolie Deputy Minister of Fiscal Affairs, MFDP
Gessler Murray Minister, Lands and Mines
Dickson Yarsiah Deputy Director General, National Bureau of Concessions
Myer Saye Deputy Director, LEITI
Hon. Dorbor Jallah Executive Director, Public Procurement Concessions Commission
Hon. Vincent Willie House Chair on Lands, Mines, Energy
Hon. Sando Johnson Senate Chair on Concessions
Dorr Cooper Superintendent, Nimba County
Levi Demmah Former Superintendent, Grand Bassa
Munroe Outland Senior Policy Analyst, Governance Commission
Hon. Larry Yanquoi Representative, Nimba County
Hon. Dixon Seboe Representative, Montserrado County
Augustus Zayzay Former Deputy Minister for Planning and Development, MIA
Aliu Nye Former Min. of Fiscal Affairs, MFDP
Subnational Government
Michael Nual Treasurer, PMC Nimba County
Joyce M. Paye Account Technician, PMC Nimba County
Nya Messa Acting Superintendent, Nimba County
Anthony Sheriff Assistant Superintendent for Development, Bong County
Christian Logan Adm. Asst. Superintendent, Grand Bassa County
Dennis Chappy District Development Committee Chair, Boinsen District
31
Concessionaires
Eric Swen External Affairs & Corporate Responsibility Manager, Arcelor Mittal
International Partners
Alex Saye Yeanay Senior Social Protection Officer, AFDB
Jenkins S. Flahwor GIZ/Liberia
Jan Mcarthur Country Manager/Internews
Alex Kitain USAID/Revenue Generation for Governance and

Growth (RG3)
Paul Kaiser USAID/Local Empowerment for Government Inclusion

and Transparency (LEGIT)
Sarah Stock USAID/Washington - DRG
Lisa Korte USAID/Liberia - NRM
Yoel Kirschner USAID/Liberia – NRM
32
8.Annex 3: Summary of Feedback from

Stakeholder Validation Workshop
Background
On April 25, 2018 USAID LAVI convened a one-day validation conference to present findings
from the draft PEA report to diverse stakeholders and solicit comments on suggested PEA/CSDF
reform options. The workshop included: i) an opening session with speakers from the NRM
Coalition and USAID LAVI; ii) a technical presentation from a LAVI/ NRM specialist on the
report’s main findings; and iii) a panel discussion of experts providing opinions on how to best
improve and implement the PEA/CSDF reform options and recommendations.
Key Findings
The following comprise the main comments and recommendations made at the workshop:
• Local government and CSOs need strengthened role: Participants noted that
superintendents and civil society’s mere observer status prevents their meaningful
contributions during the county sittings. To help strengthen the reform process, they
recommended that the draft Local Government Act be passed by the Legislature.
• Need for separation of accounts: Several attendees thought that separating CSDF back into
CDF and SDF is necessary in order to guarantee the sustainability of the funds. Additionally,
some thought that separation would help ensure transparency, accountability and fiscal
probity in the usage and management of the fund, as they contended it would allow targeted
inspection of the details of each fund in cases of abuse.
• Decentralization of the Public Procurement and Concession Commission (PPCC): Some

thought the PPCC’s centralized location in Monrovia impedes county-level development,
especially in counties with concessions. Consequently, it was recommended the PPCC be
decentralized to improve the CSDF’s management and usage.
• Lack of or limited presence and participation of women and youth at county sittings:
Several participants underscored the lack of or limited presence and participation of women
at county sittings, and a need to increase women’s presence and participation at county
sittings. Similarly, some noted that young people are not allowed at most county sittings,
which was in their opinion due to youth being negatively stereotyped. Regarding the gender
disparity in sittings, a new LAVI-funded project responded that they are actively targeting
the inclusion of women in county sittings.
• Ensuring that county residents understand concession agreements: Participants thought

that county residents did not understand natural resource concession agreements and their
ensuing laws (after ratification by the legislature). Though some argued that such laws should
be simplified, others noted that LEITI already has simplified concession laws and these are
now publicly available.
33
• Favorable political climate for reforms: Nimba County Representative Hon. Larry
Nyonquoi pointed out that reform options historically lacking political will should now see
an opening for gaining political traction for CSDF reforms. Namely, the government of Ellen
Sirleaf lacked a political majority and used the CSDF process to buy support from legislators
of other parties, thus inhibiting it from major reforms. In contrast, President Weah’s party—
the Coalition for Democratic Change (CDC)—controls a large legislative majority and seems
intent on distinguishing itself from the Sirleaf administration by adopting early government
reform.
• Need to improve local community advocacy on splitting the CSDF: A legal expert
recommended CSOs invest resources in helping local communities advocate for policy
reforms beyond merely improved CSDF management. In particular, the expert thought that
splitting the fund into CDF and SDF would enable more targeted monitoring of each fund.
• Inadequacy of Section 9 of the Budget Law: A finance expert emphasized that Budget Law
Section 9 is incapable of properly managing use of the CSDF and recommended
strengthening the law to prevent legislators from managing CSDF funds.
• Limitation of CSDF given GoL cash-based budget: The same finance expert noted the
challenge for the CSDF to fund county projects in the GoL cash-based budget system, which
does not allow money to sit its account without implementation. As many counties face
challenges in accessing their funds from the central government within a given budget year,
their CSDF funds are typically used by the GoL for other purposes each year. The finance
expert instead recommended setting up dedicated escrow accounts with a short timeline for
expending the cash.
34

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Report for USAID/Liberia: Not for Circulation, Publication or Citation

Political Economy Analysis:

USAID Liberia Accountability

MIA Ministry of Internal Affairs

Reform options considered in this report include the following:

 a stand-alone national CSDF law;

3.2.Political Economy Analysis of CSDF Reform

3.3.History of the CSDF

Social Development Fund

Merger: County & Social Development Fund

3.4.Official CSDF Process

Figure 1: Overview of the current CSDF process

Icons made by Freepik from www.flaticon.com

1.1.Challenges in the CSDF Process

political loyalty to county legislators. As a result, PMC members with multimillion-dollar

3.5.CSDF Positive Outcomes

have enjoyed a resurgence at local levels.34

3.6.Root Causes of Challenges

4.2.Reform PFM Act to allow SDF to go directly to counties

4.3.Improve transparency of CSDF fund use

4.4.Split CDF and SDF

4.5.Reform National Budget Law

• Expand role of Superintendent in CSDF management and oversight: The County

4.6.Direct Dividend Payments

4.7.Intergovernmental Fiscal Transfers

5.Recommendations for LAVI

Opportunities with Legislature

 Central government to transfer to county governments their MDA annual contributions

and transparency and accountability standards.63

Opportunities with Administration

Opportunities with Local Government

Article, Books, Reports:

Ballah, A. 12 October 2015. “Nimba’s Development Superintendent Reacts to Allegations of

Danso, F. (2017), Transparency and Accountability in Ghana's Mining Sector: Is it Real or

DFID, July 2009. “Political Economy Analysis How To Note.” URL:

GIZ, “Support for good governance in the mining sector.” URL:

Liberia Governance Commission 2015 Roundtable and presentation of GC research on “Local

Nyei, I. 2011. Liberia Decentralization Policy: a roadmap to participatory governance and

USAID/LAVI. 26 January 2018. A County Social Development Fund Strategy.

Executive Order No. 83 Pertaining to the Office of Ombudsman. 13 March 2017.

Forest Reform Act 2006.

National Policy on Decentralization and Local Governance 2011. Liberia Governance

Local Government Act, July 17, 2017 Draft Bill.

National Budget Approval Act FY 2006-2007

National Budget Approval Act FY2006/07

National Budget Approval Act FY2015/16.

National Budget Approval Act, FY 2012-2013.

National Bureau of Concessions Act.

Public Financial Management Act 2009.

Public Financial Management Act 2009.

Public Procurement and Concessions Act of 2005, amended 2010.

Legislation of Other Countries:

Civil Society Organizations

Jimmy Shilue Executive Director/P4DP

Eddie Jarwolo Team Leader, NAYMOTE

Moses Bailey County Coordinator, Bong/NAYMOTE

Lormah Baysah Executive Director/ RHRAP

Peter Dolo Project Manager/DEN-L

Harold Aidoo Executive Director/IREDD

Sam Kruah County Coordinator, Nimba/IREDD

Frances Greaves President/NACCSOL

James Yarsiah Executive Director/RRF

Ralph Jimmeh Project Manager/LMC

Anderson Miamen Executive Director/CENTAL