| The Twentieth Meeting of the Technical Preparatory Committee of
the Whole (TEPCOW) and the Ninth Meeting of the Intergovernmental Group of Experts
Presentation by
Elene Makonnen
Principal Advisor
Office of the Executive Secretary
Algiers, 5 May 2001
Thank you Mr. Chairman,
Introduction
I would like to make my presentation in three parts:
- First, by way of background, briefly talk about the experience
with past development partnerships on Africa;
- Second, explain the transformed partnership that is being
proposed under the Compact and;
- Discuss the guiding principles and the application of these
principles under the proposed partnership.
I. Background
International partnerships have always been important for
Africa and will continue to be even more so for the coming years.
- In the past, partnerships on Africa have been largely
manifested through substantial ODA flows to the continent.
- Indeed, Africa has been one of the major recipients of ODA.
However, there has been a steady decline in the share of ODA
to Africa over the last decade:
- During the 1990s, Per capita ODA having declined from $32 to
$19.
- If we look at the case of Sub-Saharan Africa separately - the
sub-region where a majority of the poor in Africa reside - the share of ODA declined from
37% to 27% during the 1990s.
Several factors are cited as the cause of this decline:
- Ineffectiveness of past official development assistance in
many of our countries. I will come back to this in a while,
- an erosion of aid mandate in donor capitals,
- budget constrains of donor countries.
Past aid relations have also had mixed results:
- On the one hand, aid has financed important successes
throughout Africa.
- Many African countries have succeeded to put in place
fundamental reforms in their economies with the support of external assistance.
- Aid has supported major investments in infrastructure
development in Africa.
- Similarly, the agriculture sector in Africa has benefited
significantly from external assistance funded introduction of improved varieties of crops
and (maize varieties in Kenya and Zimbabwe) and expanded extension services.
- The eradication of diseases such as river blindness in West
Africa could not have been achieved without external support
- On the other hand, the effectiveness of aid has been fettered
for a number of reasons,
- Lack of government commitment to policy reforms.
- Fragmented donor-support through uncoordinated projects. At
times these projects were designed outside national priorities.
- Policy advice that did not take into account the specific
conditions of the country
- Coupled with this, there is the legacy of excessive
conditionality through the structural adjustment years, which in some cases has been
perceived by African countries as being intrusive.
- Unrealistic and excessive conditionalities have also led to
disruptive stop-and-go aid relations.
- And for this and other reasons, much of the aid to the
continent has also accumulated into a largely unsustainable debt stock.
II. What is the nature of the partnership proposed
under the Compact propose? And what are the guiding principles for this partnership?
- Drawing on the lessons of experience from past aid relations,
we have derived four guiding principles under the Compact for transforming Africa’s
aid relationship with its development partners into a truly effective mechanism for
development.
- Ownership by Africans of policies and programs for poverty
reduction through broad-based growth and - for the enhanced participation of African
countries in the global economy;
- Predictability of long-term donor support through stable
long-term resource flows;
- A transformed partnership based on mutual accountability to
agreed development outcomes as well as buy-in to peer review and performance monitoring;
and
- Recognition of the diversities that exist in Africa.
Based on these principles, what is envisaged is a partnership
in which African countries and international partners hold each other accountable for
progress towards agreed development goals and outcomes.
Taken separately, these guiding principles, in and of
themselves, are not new to the development literature. What we believe is that, pursued in
a coherent manner, these principles provide an African vision for enhanced partnerships
that could make a fundamental difference in terms of the developmental impact of
development assistance.
Similarly, the Compact does not propose any new aid
modalities and instruments.
Rather, it draws on a number of innovations and approaches
that are being tried under current aid modalities and instruments and recommends the
replication of these approaches in an increasing number of countries.
What I would like to do now is illustrate how each one of
these guiding principles can be implemented.
African ownership of policies and programs
The centrality of ownership to successful policy reform and
development is well recognized.
However, supporting ownership in an operational sense remains
an illusive concept.
National ownership has to be translated into a statement of a
vision of where the country wants to go.
As such, then a distinguishing feature of ownership is
leadership and capacity to define this vision and define strategies and implement sound
policy choices that can help translate this vision into outcomes.
Necessary prerequisites for this include:
participatory processes for priority setting and consensus
building;
analytical capacity for defining sound policy options, and
systems and processes to implement policies and programs.
Recently introduced instruments such as the Comprehensive
development Framework and the Poverty Reduction Strategy Papers (PRSPs) -- the key
features of which are national ownership and participatory development --offer a
significant opportunity to advance ownership.
The PRSP approach was endorsed by African leaders at a
meeting in Libreville in Gabon in March 1999.
However review of early experience point to a number of
operational challenges and tensions that could potentially undermine ownership.
The key concerns so far relate to:
- Shortcomings in national capacity to prepare PRSPs, -
including the heavy demand placed on weak institutional capacity by the requirements for
participatory and consultative preparation of national poverty reduction strategies;
- The tension between ownership and the requirement for the join
assessment by the staff of the World Bank and the Fund regarding the appropriateness of
the PRSP as a basis for all concessional assistance from the Bank and Fund, and now also
from the bilaterals; and
- The tradeoff between the time required to prepare
comprehensive poverty reduction strategies and the need for urgent debt relief under HIPC.
It is against this background that the PRSP Learning Group
was established by the ECA to facilitate: -
- the systematic exchange of lessons of experience among
Africans on the PRSP process, and
- The articulation of African perspectives on the PRSP so as to
shape the evolution this instrument consistent with the needs of Africans.
I would like to mention here two other African
forums established by ECA to facilitate African ownership, and consensus building:
On the question of capacity, it is useful to recognize , the
contribution of, and potential role that, the African capacity Building Foundation based
in Harare in this regard.
Predictability of long-term donor support
Many reasons are cited for disruptions in donor support to
African countries
- Failure to meet conditionalities by the BWI
- In some cases the conditionalities were far too many in number
and in excess of what was required under the program objective;
- In others, capacity limitation was lacking to implement the
required conditions; and
- At times, the disruptions were due to political developments,
which result in reversals in previously agreed reforms.
What is envisaged under the Compact is a shift away from
excessive conditionality towards a mature relationship in which African leaders hold
themselves accountable to certain development outcomes and put in place the required
processes. In a sense then African countries set their own conditions and requirements for
success.
What will be key in this regard is a commitment by African
governments to manage their aid effectively.
- Through closer linkage between development planning and
resource allocation through mechanisms such as the Medium-Term Expenditure Framework;
- Strengthening budget disciple and public expenditure
management;
- Policies that are consistent and that recognize the hard
budget tradeoffs facing the country;
- A focus on transparency and accountability through effective
audits and arrangements of such audits for public oversight.
A transformed partnership based on mutual accountability
Mutual accountability is the shared commitment by African
countries and external donors to monitor progress towards agreed goals and to peer review.
This is distinct from the accountability that has largely
been practiced to date in a unilateral manner with recipients required to report to
donors.
What is envisaged on the part of African countries, is a
deepened commitment to systematic monitoring and reporting of budget management practices,
strengthening auditing systems, developing capacity to collect reliable and timely date
for performance monitoring and evaluation, and publishing and making available for public
scrutiny periodic Auditor General Reports.
What the Compact envisaged from the side of donors is: -
regular reporting of planned and ongoing activities in a given country – reporting
that provides detailed breakdown of the extent of untying of the donor’s support to
the country, the amount of money that is devoted to funding technical assistance, as well
as a qualitative assessment of impact.
At the heart of the Compact is also the need for African-led
mechanisms and instruments for mutual accountability.
- For example Tanzania is now using the Consultative Group
mechanism –not merely for pledging of assistance, but also for reviewing and
monitoring ongoing commitment;
- Mali – is engaged in an ongoing joint review with DAC to
critically assess the experience with development cooperation between Mali and its
external partners.
- Burkina-Faso – is conducting pilot effort with EU to
monitor development outcomes in the education and health sectors.
Recognition of the diversities that exist in Africa
- Diversity is a reality in Africa. The Compact sets high
standards but also recognized that not all countries are at the same stage of development.
Some have a strong record of good performance. Some are non-performers for a range of
reasons (lack of political commitment, unexpected disruptions in the development process,
capacity constraints). And then there are others – such as those emerging from
conflict - that face special needs that deserve attention.
- All of these countries need support in meeting the challenge
of poverty reduction.
- However, three broad categories of country groupings for
differentiated country-tailored operational purposed:-
- Enhanced Partnership countries: - These are the countries,
which have the required conditions to use aid effectively, and to benefit from enhanced
partnerships through aid channeled through direct budget support.
They are countries with: -
- A record of commitment to macroeconomic fundamentals and a
strong focus on poverty reduction;
- They adhere to the principles of governance and have in place
accountable public finance management systems;
- the leadership is committed to peace and stability and to
address constrains which cause poor governance, and
- There is also willingness to participate in peer review.
- These are the countries that will help Africa grow and allow
us to meet the challenge of reducing poverty in the continent.
- They are the countries, which Africa can showcase to earn the
confidence of the international community in its ability to put its house in order.
- Through their successes and achievement, they are the
countries, which will help Africa increase its chances for more external resource flows.
- And finally, these are the countries that will be the
forerunners of Africa’s transition for high aid dependency to a more robust
development path led by the private sector.
Limited Partnership countries- For a range of reasons I
mentioned above, these are countries, which unable to benefit from the partnership
framework arrangement described above.
They may lack the required commitment to policy reforms and
macroeconomic fundamentals; they may have questionable commitment to democratic
principles.
Assistance to these countries should be provided to help them
move up on the policy spectrum and address the existing capacity constraints. The
objective is to help these countries join the enhanced partnership group over the long
run.
Post conflict countries - there is increasing awareness of
the need to tailor special operational approaches to assist post-conflict countries to
make the transition to normative development.
- These three categories usefully describe differences that are
already emerging in commitment and performance among African countries and in the level
and type of development assistance they receive.
- In short, what the Compact based on the above categories to
arrive at differentiate partnership approaches that can be taken to encourage African
countries to adopt policies and undertake actions that will enhance the prospects for
sustainable development and poverty reduction.
Thank you Mr. Chairman. |