Relaunching the Pledging Conference of the United Nations Trust Fund for African Development (UNTFAD) 

Introduction

            This brief note by the secretariat is a follow-up to Resolution 836 (MFC.2) adopted by the Ministerial Follow-up Committee of the Conference of Ministers of Economic Development and Planning at their second meeting held in Abuja, Nigeria in May 2000.

            It would be recalled that the Committee had, in that resolution recommended that the Pledging Conference of the United Nations Trust Fund for African Development (UNTFAD) be transferred back to Africa from New York and convened alongside the annual session of the ECA Conference of Ministers.  In the same resolution, the Committee also called upon African Governments and their development partners to seize the opportunity of the transfer to show their support for Africa’s development by increasing their contribution to the Fund.  Against this background, the purpose of this brief note is to seek the endorsement of the 2004 Conference of Ministers in re-launching the Pledging Conference and held alongside the annual session of the Conference of Ministers beginning in 2005.

            This note provides a brief background to the UNTFAD, highlighting the main trends in contributions to the Fund since its inception in 1977; and provides the rationale for re-launching the Conference and enhancing its effectiveness in support of Africa’s development.

Background

            The United Nations Trust Fund for African Development (UNTFAD) was established in 1977 by Resolution 288 (XII) of the ECA Conference of Ministers.  Its main objective is to finance the operational activities of ECA that are not funded by the regular budget, although derived from the approved work programme of the Commission or its sub-regional offices (SROs).  Contributions to the Fund are made on a voluntary basis by African member States and their development partners, including governments of non-African countries and foundations.

            Since its creation, Pledging Conferences for the Fund have been held biennially, in conjunction with the sessions of the Conference of Ministers.  However, in May 1995, the ECA Conference of Ministers adopted resolution 808 (XXX) on strengthening the operational capacity of ECA, which requested that the Pledging Conference be merged with the Annual General Pledging Conference of the United Nations in New York. 

            From the time of its establishment in 1977 to date, the Fund received total pledges amounting to US$ 18.7 million from member States and their development partners.  Of this amount, about 86 percent or US$16.4 million has been redeemed, leaving current arrears of nearly US$2.3 million.  Over the years, the number of countries pledging and total contributions have continued to decline, with the sharpest drop in the years when the Conference was held in New York. In 1977, for example, 24 countries and institutions pledged a total amount of almost US$ 4 million, but by 1995, only 13 countries pledged to the Fund for a much-reduced amount of about US$ 732,000 (See tables 1a & 1b attached).  In addition, contributions to the Fund by African countries had ceased by 1999 to the present. The same is true, albeit to a lesser extent, with the contributions from non-African countries.

            The poor state of African economies, as well as the decision by some development partners to channel their assistance directly to beneficiary countries rather than through institutions like ECA were responsible for the decline in the contribution to UNTFAD.

            In the past, the resources made available to the Commission through the Trust Fund have served to finance ECA projects either totally or in part, mostly as seed money to start off activities, which eventually generate substantial additional resources to launch major projects and programmes.  For instance, the Fund has been used to support projects in such priority areas as regional integration, infrastructure development, the advancement of women, capacity-building, etc.  (table 2 attached shows the list of projects and programmes funded with UNTFAD resources between 1999 and 2004). 

Rationale and justification 

            A number of reasons can be adduced for reviving UNTFAD and enhancing its effectiveness for Africa’s development.  A few are discussed in the section below.

            The ECA secretariat depends on two principal sources of finance to implement its activities: the regular budget – through which the United Nations General Assembly appropriates resources to ECA – and extra-budgetary resources – that is, contributions from bilateral donor countries and institutions and from UN organizations and specialized agencies.  However, over the past 10 years, appropriations under the regular budget have continued to decline in real terms or have remained stagnant at best in line with the budgetary constraints within the UN.

            To reverse this trend, in recent years ECA developed a partnership programme as part of the reforms initiated in 1996 which was aimed mobilizing additional resources from both traditional and new donors.  These efforts have yielded impressive results, with a steady rise in extrabudgetary support and an expanded donor base.  Indeed, over the years, the secretariat has become increasingly dependent on these resources, which by the end of 2005 is expected to account for over 22 percent of ECA’s total budget. The corresponding figure for 2001-2002 when the partnership programme was initiated was 13 percent. 

            The extra budgetary resources are made available to ECA in an attempt to bridge the gap between requirements and resources available from the regular budget.  Unfortunately, the gap has never really been bridged.  It is therefore in this context that the proposal to relaunch the UNTFAD is being made.

            The expanded programmes of work and priorities approved at various sessions of the Commission, during the past few years, reflect a strong awareness, not only of the need to strengthen the capacity of the secretariat to deliver, but also of the need for collective action to be taken in mobilizing the resources required to achieve the additional responsibilities.

            A significant step in the direction towards self-reliance was taken by African countries with the adoption of NEPAD which reaffirmed that the continent has the primary responsibility for its own social and economic development.  Clearly, UNTFAD can play an important role in terms of leveraging African support to raise additional resources from outside the continent and building the capacities of African countries in attaining the goals of NEPAD and the MDGs.  The primary responsibility for this lies with the member States themselves, with additional support from their development partners.

            In addition, a substantial increase in the contributions of African countries to the Fund will provide a predictable, continuous and assured basis for enhancing the impact of ECA’s operational activities.

A Call for Action

            ECA therefore calls on all African Nations, and existing and new bilateral and multilateral partners, to embrace this renewed initiative and opportunity to contribute toward the sustainable economic and social development of Africa. Although the development challenges of Africa are daunting, reviving UNTFAD will better position ECA to meet them.

            The Commission requests the 2004 Conference to declare the UNTFAD Pledging Conference launched starting in 2005 and to convene it annually thereafter in conjuction with the Conference of Ministers.  However, member States who wish to contribute to the Fund in 2004 may do so either during the course of this conference or through their respective embassies in Addis Ababa.

            As part of the preparatory activities towards the 2005 UNTFAD Pledging Conference, ECA will prepare and forward to member States a profile of its approved regional and sub-regional work programmes and projects, toward which they may choose to pledge/contribute. 

            Pledges and contributions to UNTFAD funds can be made in any of the following ways:

            It is important to note, though, that since 2001, ECA has initiated a shift in the form of its donor support. The Commission has gradually moved away from fragmented support to activities in a range of unrelated activities, to programmatic support to its approved work programmes. This shift has not only helped to provide needed predictability in its supplementary resources, but has also ensured the allocation of extra-budgetary resources to priority tasks. It has also provided the needed flexibility in medium-term planning, which has enabled the Commission to provide significant analytical support to NEPAD, the MDGs, and other new initiatives.

Table 2: Major projects and programmes implemented with UNTFAD resources between 1999 and 2004

Project Title	Donor	Amount	Period
Promoting Solar energy technology in Africa	Japan (Untfad specific)	100,000	1996-2000
Forum on Policy Options for promoting economic empowerment in eastern and southern Africa	Untfad General	25,000	1999-2001
Capacity Building of the African Centre for Women (ACW)	Untfad General	440,755	2000-2004
Study on ECCAS Trade Liberalization Scheme	Untfad General	25,000	2000-2004
Pilot Project on the production of the Xanthum Gum for the baking industry in Africa	Japan (Untfad specific)	140,000	2000-2001
Promotion of the Capital Market  in Africa	Japan (Untfad specific)	74,600	2000-2001
Promotion of the coastal shipping in West & Central Africa	Ecowas (Untfad specific)	220,300	2001-2002
Support to the Africa’s subregional integration programme under TICAD	Japan (Untfad specific)	68,600	2001-2002
Enhancing ECA’s relations with the Federal Democratic Republic of Ethiopia	Untfad General	118,770	1996-2002

Table 1a:  Pledges for the period 1977-1995

Year	Amount pledged	Number of countries/institutions
1977	3,989,225	24
1979	1,814,663	19
1981	2,375,392	21
1983	2,286,442	15
1985	1,165,384	13
1987	594,411	9
1989	854,698	20
1991	657,834	12
1993	1,377,408	12
1995	732,450	13
Total	15,847,907	158

Table 1b:  Pledges made in New York form 1996 to 2004

Year	Amount pledged	Number of countries/institutions
1996	$      717,314.00	4
1997	$      500,000.00	4
1998	$      453,314.00	4
1999	$      317,500.00	4
2000	$      317,500.00	4
2001	$      160,000.00	4
2002	$      160,000.00	5
2003	$      220,000.00	5
2004
	$   2,845,628.00