African Learning Group on the Poverty Reduction Strategy Papers Summary Report of the first meeting 5-6 November 2001

Economic Commission for Africa
United Nations Conference Center
Addis Ababa, Ethiopia

Table of Contents

Executive Summary
I. Why an African learning group
II. PRSP content - Growth strategies
III. Public finance management
IV. PRSP process
V. National capacity needs
VI. Donor policies
VII. The way forward

Annexes
Agenda
List of partcipant

Executive summary

1. This report presents the highlights of the PRSP country studies and summary of discussions at the first meeting of the African Learning Group on the PRSP (PRSP-LG), convened by the Economic Commission for Africa (ECA) from 5 to 6 November 2001. The PRSP-LG brings together on an annual basis senior African policymakers and experts for candid discussions on how the PRSP process is unfolding in Africa. The Learning Group considers the scope and nature of the challenges that countries are encountering during the preparation and implementation of the national poverty strategies, the emerging best practices and capacity gaps, and changes in donor aid policies and procedures as they relate to the PRSPs.

A. General points

2. The following are the key conclusions of the first PRSP-LG

• The PRSPs have made a difference on how growth and poverty strategies are developed at county level and how such strategies are discussed with the International Financial Institutions and other external partners.

• The PRSP approach has created space for increased African ownership at county level by promoting broad-based participation of key stakeholders in developing, implementing, and monitoring national poverty strategies.

• The success of the PRSP approach very much depends on strong political leadership, ownership of reforms envisaged, and on the fact that strategies are well grounded on past experience and lessons learned.

• Participation and consultation processes with private sectors and civil society organizations are essential for the development and implementation of the PRSPs. However, the way forward will require steps to institutionalizing the relevant processes.

• Innovations are being piloted in a few countries and there are some indications that donors are trying to adjust aid modalities to the objective of the PRSP. But much more needs to be done to show tangible shifts in this direction.

B. Specific points

3. The PRSP consultation was organized around five themes: content of growth strategies, PRSP-related financing and public expenditure management; legitimacy of the PRSP participatory process; capacity requirements; and donor policies and modalities. The following are highlights of the discussions on each of these thematic areas:

• Growth strategies: There was a consensus that growth is necessary but not sufficient in reducing poverty. Pro-poor growth strategies require strong political leadership from the top and an enabling environment that encourages private sector investment and ensures efficient delivery of public services. The key elements of a pro-poor growth strategy include: stable macroeconomic environment; sectoral policies that include investing in human and physical capital, introducing financial sector reforms, increasing productivity in agriculture; and promoting export diversification. In this regard, the critical importance of mainstreaming gender and HIV/AIDS concerns in the design of national poverty reduction strategies was flagged as deserving special attention. It was also stressed that strong institutions that promote the rule of law, combat corruption, and empower local governments through the decentralization of decision-making are all crucial to the creation of the enabling environment for pro-poor growth strategies.

• Financing and expenditure management: With the advent of the PRSP, the budget process has increasingly become more open, with more involvement of line ministries and other stakeholders. An important step in this regard is institutionally linking the PRSP with the annual budget cycle and the Medium Term Expenditure Framework (MTEF). However, it was acknowledged that translating the PRSP objectives into fully costed programs and policy actions has not been easy. Consolidating all government expenditures and revenue flows into MTEF and budgetary process was identified as a key challenge. Moreover, expenditure management, monitoring and auditing systems remain extremely weak in PRSP countries due to lack of good quality data and adequate capacity at the national and local levels, making financial transparency and accountability difficult.

• Legitimacy of the PRSP participatory process: For the most part, the participatory process surrounding the PRSPs has been regarded as successful. However, participants pointed out that the participatory PRSP processes tend to be ad hoc at the moment and need to be institutionalized. For the PRSP process to be successful, there must be high-level political commitment to the process. Some participants felt that most governments in Africa are not yet ready to accept civil society groups as serious stakeholders in policy formulation. A clear and comprehensive strategy for information, education and communication is a prerequisite for developing successful participatory processes.

• National capacity needs: Capacity constraints in government were emphasized as seriously hampering institutional capacity to undertake systematic analysis of the causes and consequences of poverty, design and implement poverty reduction policies and programs, and monitor their impact. Participants agreed that governments need to take measure not only to build capacity but also to retain it. Civil service reforms are key in this regard to correct the incentive and wage structure of the public sector. Future donor support for capacity building must also become more strategic and needs to reach out to local universities and think tanks to support them to play a catalytic role.

• Aligning donor policies with the PRSP: The meeting concluded that innovations in donor aid modalities and partnership arrangements (for example, in Mozambique, Rwanda and Tanzania) are being tried in a few countries. However to forge a partnership genuinely reflecting the PRSP principles, donors need to do much more to replicate in more countries the positive innovations that are already being tried, harmonize aid procedures, and improve coherence in their aid and trade policies. There was also a consensus that more needs to be done by external partners to respect the centrality of the priorities articulated in the PRSP and to realign their programs accordingly. Participants felt that donors still placed undue emphasis on procedures and process and needed to shift their focus to be on impact. At the same time, participants stressed that African governments on their part have to realize that the primary responsibility to ensure that aid is being effectively used and to envisage the strategies that over the long-run would reduce their dependency on external aid rested with Africans themselves.

The African Learning Group on the PRSPs

I. Why an African learning group

1. African governments and their external partners have agreed on the imperative of reducing poverty throughout the continent. This international consensus brings with it a nascent transformation in aid relationship between African countries and their external partners characterized by a focus on African ownership of programs and policies to reduce poverty, governance, participatory development, and the effectiveness of aid in meeting poverty reduction outcomes - principles consistent with New Partnership for Africa's Development. Central to this new aid relation is the Poverty Reduction Strategy Papers PRSPs).

2. Soon after the introduction of the PRSPs in September 1999, ECA in collaboration with the World Bank and the IMF, hosted in March 2000 a workshop for African countries for dialogue on the PRSP content and process and on its implications for African countries. In welcoming the PRSP, participants also put on the table the far-reaching operational challenges they envisaged with the operationalization of the PRSP process. They also noted the significance of the PRSP to Africa's future relations with external partners.

3. In July 2000 ECA also launched a high-level mission to several African countries at different stages of the PRSP process to learn first hand on how these countries were adjusting to the PRSP process and how they were addressing the practical challenges and constraints in this process. This mission also consulted with Ministers and senior officials on how the ECA might support member States in this process.

4. One key message that came out from the March 2000 workshop and the consultations with member States was the view that African countries had lost out much during the structural adjustment years of the 1980s on the systematic sharing of experience and peer learning among themselves and the articulation of a strong African voice in the international community on the continent's experience with the structural adjustment.

5. It is in this context and in recognition of the operational challenges associated with the PRSP approach, that the member States urged ECA to establish and manage an African-owned forum that would facilitate African peer learning and serve as a mechanism through which Africans could ensure the relevance of the PRSP approach to Africa's development challenges. The ECA-sponsored African Learning Group on the PRSP is established to meet this request.

6. The link with the Strategic Partnership with Africa (SPA) is a distinct feature of the PRSP-LG. It offers a mechanism to feed the messages from and lessons learned on the African side to international and donor forums where the PRSP is discussed. As such, the first meeting of the African Learning Group on 5-6 November 2001 was followed by a one-day joint African Learning Group/SPA meeting on 7 November with the participation of African and SPA policymakers and experts, and the meeting of the SPA Technical Group from 8 to 9 November.

7. The focus of the work of the PRSP-LG is on sharing of best practices, identification of national capacity gaps, formulation of recommendations of the required actions by various stakeholders (African governments, civil society organization, African research institutions, and private sector) to address these gaps, and advocacy for change in aid modalities and approaches. The Learning Group also aims to stimulate dialogue on transforming development relations between African countries and their key external partners for increased aid effectiveness and enhanced development impact. Each annual meeting of the PRSP-LG is informed by succinct country reports prepared by African experts on the key PRSP-related issues confronting the country.

8. Each session of the Learning Group includes participants from African countries including government officials and experts directly involved with the PRSP process and civil society actors who are well placed to influence and contribute to this process. Representatives of bilateral and multilateral donors are invited to participate in an observer status and/or as resource persons.

9. This first PRSP-LG meeting was unique in several important ways:

• The rich and candid deliberations among the African country representatives on their experiences and, at times frustrations, with the required PRSP content, process, and implementation;

• The strong, collective articulation of an African perspective on the PRSP;

• The unanimous acknowledgement that harmonized, PRSP-based, aid programs, and modalities can better support an African-driven agenda for poverty reduction;

• The convening of the African Learning Group back-to-back with a joint PRSP-LG/SPA expert workshop, and the SPA Technical Group meeting which provided a feedback loop from the African forum to the donor forum; and

• The clear messages communicated from Africans to their external partners and also to ECA.

10. The meeting was organized around five thematic sessions: - The scope and content of the growth strategies underpinning PRSPs; PRSP-related financing and public expenditure management; The depth and legitimacy of the PRSP participatory process; Institutional and capacity requirements; and Donor policies and modalities.

11. This reports presents the highlights of the findings of the country studies as well as the main observations by the PRSP-LG participants on each of the five thematic areas. Senior policy-makers, African PRSP experts, and civil society representatives from nine countries -- namely Ethiopia, Ghana, Mali, Mozambique, Rwanda, Senegal, Sierra Leone, Tanzania and Uganda -- attended the two-day dialogue. Resource persons and observers from the Strategic Partnership for Africa (SPA) Secretariat, World Bank, International Monetary Fund (IMF), African Development Bank (ADB) and United Nations Development Program (UNDP) also attended the meeting. The agenda and list of participants are attached.

II. Growth strategies

12. The introduction of the PRSP offers a significant opportunity to deepen the focus on broad-based participatory growth strategies for poverty reduction in Africa and to enhance African ownership of these strategies. To realize this opportunity, the PRSP process should be focused on the articulation of growth strategies that are consistent with the broad development objectives of African countries. Within this approach, there is need to target policies that ensure that growth is broad-based through a focus on human capital development, infrastructure development, pro-poor agricultural and rural development, private sector development, and institutional strengthening.

13. In all the country studies under review, significant attempts have been made to develop comprehensive growth strategies to underpin national poverty reduction strategies. There was consensus that growth is the most powerful weapon for reducing poverty and for improving the lives of the poor.

14. In some countries, growth strategies have led to some consolidation of the macroeconomic situation. In Uganda, growth has been averaging 7 percent per year since the early 1990s, inflation has been brought down to single digit figures, and the number of people living below the poverty line has declined from 56 percent in 1992 to 35 percent in 2000. The basic factors behind the success of the reforms in Uganda include a strong political leadership, a process of learning from past mistakes, evolving government commitment, and broadening domestic ownership of reforms.

15. In Tanzania, for example, during 2000/01, the first year of the implementation of the PRSP, GDP increased marginally from 4.7 percent in 1999 to 4.9 percent in 2000, with a projected increase to 5.9 percent in 2001.

16. In some countries the centrality of the PRSP in the planning process is not yet clearly defined. For example, while there is complete consensus in Uganda that the PRSP is the sole planning document that guides the sector plans and investment programs, the centrality of Mozambique's PRSP in the planning process, relative to other planning instruments, is not yet clearly and firmly established. At present, Mozambique has a multiplicity of planning instruments and processes that need to be streamlined.

17. Also of importance is the fact that in almost all the countries reviewed, PRSPs did not take into account the macroeconomic impact of HIV/AIDS, in the projections of growth rates.

18. Finally, although all the studies addressed the issue of the linkage between the PRSP and national development planning, in varying degrees of detail, only the Mali study specifically looked at the experience with integrating special challenges, such as mainstreaming gender concerns, although there was much mention of disadvantaged groups. The Tanzania paper, however, did indicate that gender was one of the cross-cutting issues for which needed interventions have been costed under the respective priority sectors of he PRSP or line ministries.

19. There was a strong consensus during the workshop discussion that that PRSPs have made a difference to how growth and poverty strategies are developed in the country and discussed and negotiated with the International Financial Institutions, and other external partners. Many participants observed that by promoting broad-based participation of key stakeholders in developing, implementing, and monitoring national poverty strategies, the PRSP approach has changed policy-making processes and created more space for increased ownership in their countries.

20. Participants also acknowledged that sharing lessons and experiences in preparing and implementing PRSPs across countries was crucial to Africa's ability to take full advantage of the potentials offered by the PRSP.

21. On the other hand, participants agreed that preparing the PRSP is rather cumbersome and highly political process, requiring considerable amount of resources for successful institutionalization. The discussions identified a number of factors that are critical for successful institutionalization of the PRSP at the country level. These include:-

• Strong political leadership: Country experiences with PRSPs, as shared by the participants, strongly indicate that the success of the PRSP approach very much depends on the strong political leadership, ownership of reforms envisaged, and on the fact that strategies are well grounded on past experience and lessons learned.

• Enabling environment: Pro-poor growth strategies do not work in a vacuum. They need an enabling environment that encourages private sector investment and ensures efficient delivery of public services. The key elements include: - stable macroeconomic environment; sectoral policies that include investing in human and physical capital, financial sector reforms, increasing productivity in agriculture, promoting export diversification; and investing in rural development. Strong institutions that promote the rule of law, combat corruption, and empower local governments through the decentralization of decision-making processes are essential to fostering an enabling environment for broad-based growth.

• Pro-poor growth strategies: It was agreed that growth is necessary but not sufficient in reducing poverty. While some countries, like Uganda, have managed to translate higher growth into poverty reduction, the same is not true for others. The speakers from Senegal and Mali pointed out that growth in their countries has not translated into poverty reduction to the extent it did in Uganda. Key in this regard, is the nature of growth-that is, whether the benefits of growth are shared equitably, and strategies are pro-poor. Given that the majority of poor in Africa live in rural areas, it was emphasized that unless growth strategies address issues related to agricultural productivity and rural development, the benefits of higher growth may not touch the lives of the poor.

• Incorporate the voice of the poor: It was stressed that the poor do have spokespersons, but that the poor are not really given the chance to express their needs. As a Sierra Leonean representative explained, "I can assure you that their priorities will be totally different from what we list as priorities in our PRSPs. Their priorities will definitely be food on their tables or in their villages, improved housing - they are living in deplorable conditions. But we, the spokespersons will come out with grander priorities, which at the end of the day may not even meet their needs. We therefore need some kind of introspection between governments and civil society organizations."

• Gender mainstreaming: Gender mainstreaming is key to growth strategies and to the PRSP process. Expenditure patterns under national poverty strategies, for example, are not well thought out and should be revisited and honed to reduce gender inequalities. Women constitute at least a half of the population in Africa. Clearly, a country cannot achieve poverty reduction without integrating gender concerns in development. In principle, the PRSP process ensures that the contribution of both men and women are taken into account and that both parties are involved and consulted in the participatory process. However, removing legal, cultural and institutional barriers to women's contribution in development is the key challenge we face in Africa. The meeting particularly urged that the gender impact of policy options and the relevant legislative and institutional barriers be carefully considered in designing PRSPs.

• Mainstreaming HIV/AIDS concerns into PRSP: Participants expressed concern that while HIV/AIDS is a major development challenge in Africa, it is not as yet getting the urgent attention it deserves in PRSPs. There was some discussion of the inter-linkages between HIV/AIDS, poverty, and growth. Poverty leads to vulnerabilities that constitute a risk environment for HIV infection. On the other hand, many participants underscored that AIDS could also lead to reduced growth rates and poverty.

• Resource constraints: Several countries pointed out that implementing the PRSP requires considerable amount of resources. However, African countries are confronted with declining aid and an unfavorable external environment for their exports. In addition, there is not much hope in the foreseeable future for increased market access to industrial countries to raise external resources. This means that the countries have to rely on internal resources to finance the PRSPs. Consequently, countries face difficult tradeoffs. For example, if the government raises taxes to increase revenues, it may discourage private sector investment that is crucial to jump-start private sector led growth.

• Unpredictability of aid flows: A related problem is the difficulty of predicting the availability of external resources to finance PRSP tasks. Unreliability of economic growth projections, difficulty of accurately measuring the medium-term impact of various policies on mobilizing domestic and foreign investment, uncertainty of external environment, and the difficulty of predicting the level of external assistance were identified as key concerns. The problems associated with unpredictability are accentuated when recipient budgets rely heavily on external sources of funding. In Uganda, about 53% of the budget come from external loans and grants. Given that such high levels of resource flows are unlikely to continue, the government has to constantly revise PRSP targets.

• Recognize diversity of African countries: Participants also emphasized that experiences with the PRSP approach may differ across countries, depending on the stage of development and capacity constraints. For example, Uganda's experience with the development and implementation of the PRSP, while important, may not be fully relevant to Sierra Leone which is emerging from conflict, and clearly not at the same stage of development. It was emphasized that all partners, particularly the IFIs, need to factor the differences in country circumstances when judging the quality of the PRSP and its processes.

• Lack of good quality data: The participants emphasized that good strategies depend largely on good quality data and analysis. Effective formulation of policies to address structural poverty requires an appreciation of the causes and consequences of poverty and the regional, ethnic, gender disparities that exist. More analytical work is also needed to understand poverty and social impacts of macroeconomic stabilization and growth strategies. These requires bolstering data collection systems, gathering data at a highly disaggregated level, carrying out poverty assessments and monitoring, and improving the overall analytical capability.

III. Public finance management

22. Achieving poverty reduction goals will require integrating poverty reduction strategies and domestic budgeting and financial management systems. An important step, in this regard, is institutionally linking the PRSP with the annual budget cycle and the Medium Term Expenditure Framework (MTEF). It is also necessary that aggregate and sectoral spending decisions adequately reflect the PRSP priorities and fiscal constraints. Underlying all this is the need for strengthening public financial systems.

23. The session considered whether the PRSP approach has made a difference to budgetary processes, to what extent the MTEF is being used as an input into the budget, challenges in costing PRSPs, and how donors can contribute to improve the process.

24. All the country studies suggest some link between the PRSP and the MTEF but with varying degrees of depth and success. In Uganda, for example, since the 1990s, tremendous efforts have been made to link resource allocations strategically with national priorities via the MTEF, which outlines all public expenditures by linking inputs, outputs, and outcomes with the objectives defined in the PRSP. The PRSP is the main and only instrument that guides the allocation of all government expenditure. Nonetheless, Uganda's budget management and expenditure tracking system was found to be extremely weak.

25. In Mozambique, the links between the PRSP and the budget process were also found to be inadequately to assess the poverty reducing impact of public expenditures. Despite progress made since 1997 in expenditure planning and budgeting due to the adoption of the Budget Framework Law and the MTEF, the MTFF has been disjointed from the budget process and its role as a public expenditure management tool restricted.

26. The meeting acknowledged that efforts to improve public financial management and accountability are ongoing exercises in reforming African countries. The activity is part of the second generation of reforms that are focusing on institutional reforms, and more specifically on public sector reform. PRSPs have been successful in giving a poverty focus to public expenditure decisions and making them conform to PRSP priorities and to results.

27. Participants also pointed out that the PRSPs have improved budgetary practices in several ways. Traditionally, the budget process has been closed and carried out within the Ministries of Finance under a veil of secrecy. With the advent of the PRSP, the process has increasingly become more open, with the involvement of the line ministries and other stakeholders. Furthermore, countries are increasingly relying on PRSP analyses to identify priority areas and determine the resource needs of sectors. Despite these achievements, however, translating PRSP objectives into fully costed program and policy actions has not been easy. Countries have encountered several challenges in this regard:

• Consistency between the PRSP and budget process: In some cases, PRSPs targets were not linked to the budgetary process. This has been a problem when the responsibility of preparing the PRSP lies with the Planning Ministries that are separate from the Ministries of Finance that are responsible of preparing budgets.

The Rwanda experiences show how the PRSP process, backed up by high level political commitment was able to get the budget department and the planning department to work together on the MTEF and the national poverty reduction strategy so that the national identified priorities are reflected in the MTEF and the investment plan.

• Off-budget support: There was a candid discussion about the problems related to external support that falls outside the budget, which to a large extent are politically driven. Government representatives and African experts identified this is a major factor that undermines accountability and transparency in the use of public resources, and hinders the effectiveness of the MTEF and the budget. Currently, 50% of aid to Tanzania is channeled outside the budget, though the situation has improved from 70% two years ago. In Mozambique only about half the government expenditures are recorded in the budget. This means that a large chunk of resources mobilized bypasses normal government approval and monitoring procedures. This practice has, in some cases, seriously undermined the spending priorities identified in the PRSP. Consolidating all government expenditure and revenue flows into MTEF and budgetary processes was identified as a key challenge. Several participants felt that since extra-budgetary flows are largely politically driven, pressure from civil society and external partners would help to alleviate the problem.

• Costing the PRSP: There are tremendous difficulties in attempting to cost the PRSP. Even in countries like Uganda, where the efforts have been relatively more successful, problems still persist. For example, it is now accepted that reaching targets set under the Uganda's Poverty Eradication Action Plan (PEAP) will take longer than initially expected. Furthermore, preliminary estimates reveal that the gap between current and required spending levels to implement the PEAP is on the order of 37%. In the case of Mali, costing the PRSP has been a challenge as it was difficult to ensure that PRSP targets were realistic. The lack of data and capacity at regional and local levels made it even more difficult to quantify resource needs.

  One participant stressed -- "targets are getting set under which a government is going to be judged. Output oriented budgeting is essential to ask where the money goes and what the results or outcomes are. The whole issue is to prioritize needs and resources."

• Strengthening financial management systems: While urging for more budgetary support, the participants also appreciated the reluctance of donors to provide budgetary support when the public sector financial management systems are weak. They agreed that there is value-added in undertaking further work jointly with external partners to develop a common framework to assess the adequacy of financial management systems. The ECA was tasked to take the leadership in developing such a framework that reflects best practice examples and international standards. It was also recognized that donor assistance is needed in setting up expenditure management, monitoring, and auditing systems, and building capacity within the public service for the effective functioning of these systems. They highlighted the use of information technology for financial management is a key area requiring external support.

• Monitoring and tracking expenditures: Monitoring and tracking of public expenditure is key to successful fulfillment of the HIPC and PRSP commitments. It was emphasized that accountability should be interpreted not only in the form of technical accounting but also in terms of achieving results. The participatory processes entrenched in the PRSPs call for increasingly decentralized decision making, implementation, and monitoring mechanisms. However, these mechanisms are still weak, and in early stages in many countries. By way of example, Sierra Leone waited until the end of the year to carry out their Public Expenditure Tracking survey (PET) only to find that most of the activities that were indicated as had been carried out were not in fact fully carried out and the resources that were allocated to those had been expended. A spokesperson noted, "If you wait until the end of the financial year to do that, you run the risk of having resources being misallocated and you can do very little except penalize the public officials responsible." It was recommended that there be a continuous process built into the whole system from day one to ensure that the MTEF exercise not only look at planning and projecting expenditure, but also at efficient utilization of the resources.

• One speaker noted -- on Uganda's expenditure tracking exercise "The government recognizes the pressures on the Uganda Poverty Fund from the various ministries that want to have their hands on some of the resources. There are 27 conditional grants that are priority areas, including poverty, health care, education, and infrastructure that nobody can touch. It is very transparent, and if any resources are released for schools, it is announced . . . and no funding is released until implementation timelines are met. It offers a "good practice" example in terms of how it is managed and how it is monitored with the involvement of NGOs, CSOs, governments and donors."

IV. PRSP process

28. Participation by diverse group of stakeholders in the PRSP process-from formulation to implementation, and to monitoring-- is important because it contributes to the desired need for country ownership. The discussion on this topic considered to what extent African governments are prepared to involve wider stakeholder participation, the depth of the national participatory processes, and the tension between ownership and external conditionality.

29. In all of the country studies, it is made clear that the governments consider the participation and in-country consultation process to be an integral and key element of the PRSP development and implementation. In some of the countries, such as Uganda, Mali, and Tanzania, for example, the process has been quite extensive.

30. In Uganda, there were even consultations to map out the framework for the development of the PRSP and a Steering Committee was given responsibility for overseeing both the preparation and implementation of the document. Six stages of consultations were put in place that engaged politicians, district officials, parliamentarians, ministries, donors, the private sector, NGOs, civil society groups, local government representatives, and media representatives. Adequate feedback mechanisms were also established to ensure that all stakeholders were able to contribute effectively.

31. Similarly, Mali set up a number of fora for national and regional consultations with an extensive array of functions. They included a Policy Orientation Committee chaired by the Prime Minister, the Joint Commission chaired by the Minister of Finance and Economic Planning, the Substantive Committee chaired by the Ministry of Finance and Economic Planning, and the Steering Committee also chaired by this Ministry. In the consultative process, there was extensive involvement of local communities, professional associations, and development partners.

32. In Tanzania, the PRSP process has been participatory at three levels: - government (including ministers, the Governor of the Bank of Tanzania, top civil servants, key regional and district leaders, regional commissioners, district commissioners, and all district executive directors), non-governmental domestic stakeholders, and development partners.

33. In other countries, however, consultations have not been transparent and inclusive. The consultation process has been poor where the objectives, ground-rules, and methodology of consultation process have not been properly developed in consultation with diverse stakeholders. The absence of guidelines on the basic ground-rules on the roles and responsibilities of government and other participants creates unreasonable expectations as well as suspicions by some that the process is not transparent and inclusive. In Mozambique, for example, no multi-stakeholder task force was established to oversee the preparation and implementation of the PRSP. Consequently, many civil society organizations felt that they were used by the government to legitimize a non-transparent process.

34. The Uganda and Tanzania country studies highlighted the need to move away from participation as an event to institutionalizing it as part and parcel of policy-decisions. This would entail institutionalizing participation in sector plans, the budget process, and in district PRSPs. Participation must also be institutionalized in the implementation and monitoring of PRSP objectives.

35. Finally, the country reports indicated participation and consultation cost money. For a participatory process to be effective, adequate resources must be committed to secure the services of qualified individuals and well-positioned institutions that could facilitate effectively an elaborate process.

36. Participants agreed that, by and large, space has been opened up through the PRSP process for broad segments of society to be engaged in dialogue on national strategies for poverty reduction. However, in the majority of countries, the time frame and organization of such consultation have been extremely poor. In others, consultations were all done in a rushed manner, not allowing for true dialogue to take place. What follows is a summary of the main points from the debate on participation.

• Government commitment: For the PRSP process to be successful, government must be committed to it from the very top. Some participants felt that most governments in Africa are not yet ready to accept civil society organizations as serious stakeholders in policy formulation. This problem was felt to be greater in countries emerging from long period of military and autocratic regimes facing real challenges in establishing democratic and participatory processes.

• The Tanzanian Experience shows that traditionally (1970s), Tanzanians used to participate in the design of national policies, but from 1985 - 1990's, this space was not there. The PRSP re-established the space for dialogue between the civil society and the government, for civil society to air their views, to contribute and have some input in the national issues. These participation of the civil society into the PRSP also had the added advantage of enhanced a partnership between civil society and the government.

• In Rwanda, the process of dialogue is reported to be playing an important role in national reconciliation and post-conflict reconstruction. A representative explained that -- "In creating this process, Rwanda launched a national dialogue, aimed to get the message out that poverty reduction is not just mobilizing money from outside, it's also mobilizing human resources and the inputs of stakeholders in policy formulation, and empowering stakeholders with capacity and processes to monitor government actions."

• Participatory processes: One of the central features of the PRSP is the requirement for broad-based consultation with civil society organizations and other stakeholders in the formulation and implementation of poverty strategies. There was a general agreement that it does not, however, work smoothly in countries where prior dialogue between stakeholders and government has been lacking. The structure of the PRSP process, therefore, needs to be designed in such a way as to avoid unnecessary competition and friction.

• In Uganda, a representative explained -- the process started way before the PRSP when the Poverty Eradication Action Plan was developed in 1997. In comparison, broad-based stakeholder participation in policy formulation was a relatively new concept in several other countries. NGO participants from Mali and Tanzania pointed out that they encounter resistance from civil servants on the issue of consulting others about public policy, despite political will. They noted that many civil servants feel that participation and consultation is good for formulation of NGO programs, but government must lead public policy making.

• Prerequisite for participatory processes: Despite the expectation of donors that civil society would be instrumental in identifying the needs of the poor and monitoring government activities, CSOs cannot undertake these tasks if the critical information is not disclosed. This may in turn preclude dialogue on the PRSP strategies. A clear and comprehensive strategy for information, education and communication is a prerequisite for developing successful participatory processes. In this context, several participants emphasized the need for increased donor support for capacity development of key civil society institutions in policy analysis and advocacy.

• Ownership vs. PRSP conditionality: Partners are sometimes seen as undermining country ownership, given the tension between country ownership and requirements for assessment of the PRSPs by World Bank/IMF staff. Mali felt that this could be seen as another layer of conditionality. This kind of tension may lead to a situation where countries write the PRSP primarily to satisfy IFI requirements and sacrificing the views of domestic stakeholders. Another tension has emerged with regard to the speed with which the country would desire to access debt relief under the enhanced-HIPC program and the time needed to produce a broad-based, comprehensive full-PRSP. In some cases, the tension appeared to have been resolved in favor of speed to access debt relief at the expense of a participatory PRSP process.

• Participation in Monitoring processes: Monitoring of the implementation of poverty strategies was identified as equally important as designing them. However, setting up mechanisms for monitoring the outcomes of PRSP objectives is an area that is still weak in many countries. Even though the social sector expenditure allocations in the budgets have seen increases across many African countries, there are very weak systems, if any at all, to track the outcome of these investments. The exception is Uganda, where both government and civil society jointly monitor the Poverty Action Fund. Monitoring is made even more difficult in some countries, as a lot of donor funded social sector programs are undertaken outside the budgetary processes. Moreover, accountability should be interpreted not only in the form of technical accounting but also in terms of achieving results.

V. National capacity needs

37. Substantial gaps remain in African countries between the political commitment to reduce poverty and the human and institutional capacity to undertake systematic analysis of the causes and consequences of poverty, design and implement poverty reduction policies and programs, and monitor their impact. The country studies, for the most part, indicate that capacity remains weak for planning, implementation, and monitoring. Given the scope and comprehensiveness of the PRSPs, these capacity gaps seriously undermine the national ownership of poverty reduction strategies.

38. In Tanzania, the problem of capacity were deemed to be aggravated by two factors: (a) the tightness of the timetable associated with the PRSP process; and (b) government capacity being over-stretching due to the multiplicity of reforms and review processes to which the PRSP was an additional factor. There is still considerable need to modernize data collection on poverty, strengthen policy research, and improve methods of dissemination of information. In Mozambique, the capacity problems were determined to have stemmed from shortage of qualified public service staff. Both countries have in place public service reform projects aimed at training, improving the structure and levels of civil servant salaries, developing career streams, and improving public financial management.

39. Generally, capacity for policy analysis needs strengthening in the entire sequence of policy-making activities through to the monitoring stage. Good accountants, auditors, economists, policy analysts and other human resources are needed and should be trained and paid well. Building capacity must, therefore, be given greater attention by both African governments and donor partners.

40. The discussion focused on existing capacity constraints within and outside governments, the need for capacity building and retention, the required policy reforms and areas for donor contribution. The main points are as follows:

• Strengthen capacity in the civil service: Several participants discussed the administrative pressures placed on already weak public sector capacity by the complex co-ordination requirements associated by the PRSP process. National think tanks and research institutes could well be used in helping deal with this pressure.

• Reduce burden on government: Another issue raised by several countries, particularly Uganda and Mozambique, was related to heavy demands by bilateral donors on the already stretched civil service to comply with various reporting requirements on the use of donor resources. The need to streamline and harmonize donor-reporting requirements was identified as a key necessity to release civil servants to devote more time for the PRSPs.

• Strengthen capacity in NGOs: Many NGOs in Africa do not have capacity in the technical areas of macroeconomics and planning to engage government institutions effectively and present coherent and well-articulated alternatives. Capacity building among NGOs is therefore important if they are to truly participate in policy formulation. Governments and external partners have to contribute to this effort. Pooling analytical resources across NGOs was suggested as one approach to deal with NGO capacity gaps. Zambia offers a best practice example in this context, where around 90 NGOs came together under an umbrella body to produce a comprehensive 260-page document that articulated policies and programs for multi-sectoral poverty reduction.

• Focus on Capacity retention: Governments need to take measures not only to build capacity but also to retain it. Brain drain was identified as a grave problem in Africa. Civil service reforms are necessary to correct the incentive and wage structures of the public sector. However, beyond the issue of capacity building and retention lies the problem of utilizing existing capacity. There was some discussion of the "dormant" African capacity due to the disconnect between African governments and the African talent that exist in and outside the continent. There was consensus that the research and policy capacity residing in African think tanks and research centers need to be tapped to bolster national capacity.

• Donor assistance must be strategic: Technical assistance has been the main answer from external partners to fill national capacity gaps. It has proven to be unsuccessful in some cases partly due to the lack of focus on ensuring skills transfer. In the future, donor strategies for building state capacity must start with local initiatives to reinforce demand for better governance and to support local ownership of state capacity building programs. This would require concentrating institutional reforms in a few critical bureaus or agencies first and tapping the African expertise in and outside the continent. Finally, African governments and their donor partners need to find innovative ways to invest resources in education, training, research, and awareness raising. They should reach out to universities and research centers to build centers of excellence and to encourage these centers to play a catalytic role in capacity building efforts.

VI. Donor policies

41. Given the fact that a significant portion of national efforts toward reducing poverty is funded through donor assistance, then the relationship with, and the policies of, donors must be considered in any assessment of PRSPs. Indeed, the PRSP process represents a major transformation in Africa's development relations with its partners. There is an implied shift from conventional conditionality towards mutual obligations for achieving shared outcomes.

42. The country studies indicate that the PRSP process is already stimulating positive changes in donor policies and practices in a few countries. In Tanzania and Uganda, for example, there has been a shift in modalities of financing away from stand-alone project aid towards program aid and budget support.

43. In Mozambique, for example, the IMF and the World Bank have supported the PRSP process without undue intrusion. This is because the external requirements that come with aid in the PRSP do not involve a radical departure from what Mozambique has been implementing since 1987 as part of the stabilization and structural adjustment programs supported by both institutions. Increasingly, bilaterals are also getting involved in the PRSP process. There is a general willingness to move more towards budget support, with the right conditions. Bilateral donors operating in the country express a willingness to provide capacity building support, particularly around sectoral planning and prioritization, analysis, monitoring, and evaluation outcome. However, there is also a feeling among some circles in the country that there is need to speed up the pace of reform and to strengthen domestic resource mobilization significantly so as to gradually reduce the country's reliance on donor funds.

44. The highlight of the discussions on donor modalities are summarized below:

• Undue emphasis on process and procedure: There was general agreement that donors still place undue emphasis on procedure and process instead of on impact. Too much tied aid and procedural rigidities have failed to recognize the priorities of governments as articulated in the PRSPs. There was a consensus that more needs to be done by external partners to respect the centrality of the strategies articulated in the PRSP and to align their programs with the PRSP priorities. Harmonization work currently undertaken by the OECD/DAC was commended.

• Need a Common approach for aid delivery: One unifying message to donors was to move away from project lending tied to their own sectoral priorities towards budgetary support to finance PRSP priorities supported by transparent public finance systems. The meeting noted that disjointed, uncoordinated projects are targeting the poor ineffectively.

• Improve Predictability in aid flows: Concern was expressed over the impact of September 11^th incidents on the already declining ODA resources to Africa. Participants felt that steps should be taken to keep Africa on the agendas of bilateral partners, IFIs, and other external partners. However, there was a consensus that the time has come to go beyond aid to address ways for improving trade and investment opportunities in Africa. The need for increased market access for goods for which African countries have a comparative advantage was emphasized.

• Reduce aid dependency: There was a strong message that African countries should aim at reducing aid dependency overtime, by articulating clear exit strategies. One speaker observed. . "we don't just need to address the immediate needs of the poor, we also need to transform our economies, especially in the actual global context, so as to come out from aid dependency. We should have an exit strategy be it long term or not, but it should be there to ensure sustainable economies increasing relying on enhanced domestic resource mobilization, increased role for the private sector, and export revenues."

• Rethink conditionalitiy: Participants emphasized that at the heart of the PRSP approach is the need to shift from conventional conditionality that is externally imposed to mutual obligations for achieving shared outcomes. In this context, participants suggested that conditionalities, particularly that of the IMF's PRGFs, should be derived from the PRSPs. One modality for conditionality was for African countries to hold themselves accountable for certain development outcomes through self-monitoring and peer review.

• Mutual Accountability: Finally, participants welcomed the partnership innovations in Tanzania and Mali as good examples of arrangements for reviewing and monitoring of mutual accountability. Tanzania is using the Consultative Group meeting, not merely as a forum for pledging of assistance, but also for reviewing ongoing donor commitment. Mali is engaged in a joint aid review with DAC to critically assess its co-operation with external partners. These mechanisms were recognized as best practice examples of mutual accountability.

VII. The way forward

45. The PRSP is not just about producing documents. It is a long-term process for achieving long-term objectives for growth and poverty reduction on a participatory basis and through transformed partnerships between governments, private sector, civil society, and development partners. The PRSP represents a major shift in how growth strategies are formulated and partnerships forged. The PRSP-LG offered a forum for African policy makers and experts to share their concerns and air their views on the practical issues involved in operationalizing the PRSPs. The following are the next steps:

• Participants requested the ECA, as the convening institution, to regularize the PRSP-LG into an annual forum. The Commission was asked to act as the clearinghouse for PRSP related peer learning and for disseminating lessons of experience and best practices in the region.

• Participants welcomed the opportunity to dialogue with donors. It was recommended that ECA should continue to convene the PRSP-LG back-to-back with the PRSP-LG/SPA joint workshop at which African policymakers and country experts can dialogue with donors. The value added from such a joint learning forum is high, due to the high level of representation, the quality of information and best practices shared, and the frankness of discussions.

• Participants agreed that there is value-added in undertaking further work jointly with external partners to develop a common framework to assess public sector financial management systems. The ECA was tasked to take the leadership in developing such a framework that reflects best practice examples and international standards.

• In terms of information and communication technology, it was proposed that the ECA could also establish an electronic forum, and a digital storehouse for archiving and disseminating information, backed up by a web site and use of e-mail.

PRSP Learning Group/SPA meeting

5-6 November 2001

List of Participants

ETHIOPIA

Mr. Asrat Kelemework
Assistant Project Coordinator
National HIV/AIDS Prevention
Addis Ababa, Ethiopia

Mr. Taye Getaneh
Regional Coordinator
PRSP Secretariat
Ministry of Finance and Economic Planning
Addis Ababa, Ethiopia
Tel. 560021/552800/263

Mr. Fantahun Belew
Acting Head, Research and Planning Department
Ministry of Finance and Economic Development
Addis Ababa, Ethiopia
Tel. 552015/552400/202
Fax: 551355/551496
e-mail: fantahun_belew@yahoo.com

Mr. Jelal Abdel Latif
Executive Director
Inter Africa Group
Addis Ababa, Ethiopia

GHANA

Mr. Peter Kofi Dadzie
Planning Analyst
National Development Planning Commission
Accra, Ghana
Tel: (233-21) 773089
Fax: (233-21) 773055
e-mail: pkdadzie@hotmail.com

Mrs. Angela Brown Farhat
Principal Planning Analyst
National Development Planning Commission
Accra, Ghana
Tel: (233-21) 771779
Fax: (233-21) 773055

MALI

Mr. Mahamadou Zibo Maiga
Expert en Gestion Stratégique du Développement
Ministère de l'économie et des finances
Bamako, Mali
Tel. (223) 237460
Fax (223) 237462
e-mail: mzibomaiga@precaged.org.ml

Mr. Modibo Dolo
Directeur National Adjoint de la Planification
Ministère de l'économie et des finances
Bamako, Mali
Fax: (223) 225339
e-mail: modibo_dolo@yahoo.fr or cnpe.mali@malinet.ml

Ms. Traore Oumou Toure
Executive Secretary of the Coordination Unit
Malian Women Association and NGO
Bamako, Mali
Tel. 223 237474
Fax 223 200651
e-mail: woiyoo@yahoo.fr

MOZAMBIQUE

Mr. Momad Jutha
Head of Department
Ministry of Planning and Finance
Maputo, Mozambique
Tel. (258-1) 491128
Fax (258-1) 492708
e-mail: djlambo@tropical.mz

Ms. Cristina Matusse
Head of Department
Ministry of Planning and Finance
Maputo, Mozambique
Tel. (258-1) 497704
Fax (258-1) 497663
e-mail: cmatusse@hotmail.com

RWANDA

Mr. Vincent Karega
National Co-ordinator
Poverty Reduction Program
Ministry of Finance and Economic Planning
Kigali, Rwanda
Tel. 250 70523
Fax 250 70522

SENEGAL

Mr. Aliou Faye
Coordinator
Unit of Political Economy
Ministry of Finance and Economic Planning
Dakar, Senegal
Tel. (221) 8 233427
Fax (221) 8 219106
Cell: (221) 6 487225
e-mail: fayealiou@hotmail.com
npemefp@telecomplus.sn

Mr. Thierno Seydou Niane
Coordinator
Unit of Poverty Reduction
Ministry of Finance and Economic Planning
Dakar, Senegal
Tel. (221) 8 217398
Fax (221) 8 231437
Cell: (221) 6 432961
e-mail: tsniane@yahoo.fr

SIERRA LEONE

Dr. James D. Rogers
Deputy Minister
Development and Economic Planning
Freetown, Sierra Leone
Tel. 232 22 241322
e-mail: kpaka_2002@hotmail.com

Mr. Desmond S. Koroma
Development and Planning Officer
Development and Economic Planning
Freetown, Sierra Leone
Tel. 232 22 225236
e-mail: deskoroma@hotmail.com or fas@sierratel.sl

TANZANIA

Mr. Paschal Assey
Coordinator - Poverty Eradication Initiatives Programme
Office of the Vice President
Dar-es-salaam, Tanzania
Tel. 255 22 2151688
Fax 255 22 2152276
e-mail: asseyp@afsat.com

Marie Memouna Shaba
Association of NGOs (TANGO)
Dar-es-salaam, Tanzania
Tel. 255 23 2440166
Fax 255 22 2762208
Mobile: 255 744 265315
e-mail: tango@africaonline.co.tz
mshabafrikan@hotmail.com

Mr. Chamba Maximillian Kajege
Associate
Hakikazi Catalyst
Dar-es-salaam, Tanzania
Tel. (255-22) 2820041/43; 255 741 608854
e-mail: kajege@yahoo.com
hakikazi@cybernet.co.tz

UGANDA

Mr. Keith Muhakanizi
Director Economic Affairs
Ministry of Finance
Kampala, Uganda
Tel. 256 41 230290

African Experts

Mr. Joe Abbey
Executive Secretary
Centre for Policy Analysis
Accra, Ghana
Tel. (233-21) 778035
Fax (233-21) 773670
e-mail: joe@cepa.org.gh

Mr. Fantu Cheru
American University
Washington D.C.
U.S.A.
Tel. (1-202) 885 1648
Fax (1-202) 885 1695
e-mail: MalkomC@aol.com

Ms. Ellen Johnson Sirleaf
Modern Africa Fund Managers
Abidjan, Cote d'Ivoire
Tel (225-22) 449887
Fax (225-22) 485394/5
e-mail: magic@africaonline.co.ci

Mr. Samuel Wangwe
Executive Director
Economic and Social Research Foundation
Dar-es-Salaam, Tanzania
Tel. (255-22) 2760260
Fax (255-22) 2760062
e-mail: swangwe@esrf.or.tz

Institutions attending as observers/Resource persons

Economic Commission for Africa (ECA)
Mr. K.Y. Amoako
Executive Secretary

Ms. Elene Makonnen
Principal Advisor
Office of the Executive Secretary

Mr. Kempe Ronald Hope
Senior Policy Advisor
Office of the Executive Secretary

Mr. Patrick Asea
Director
Economic and Social Policy Division

Mr. Hakim Ben Hammouda
Director, SRDC Central Africa

African Development Bank (ADB)

Mr. Hailu Mekonnen
Principal Poverty Reduction Specialist
African Development Bank (ADB)
Abidjan, Côte d'Ivoire
Tel. 225 20 205985
Fax 225 20 205033
e-mail: h.mekonnen@afdb.org

World Bank

Mr. Ted Ahler
irector, Regional Front Office
Africa Regional Office
World Bank
Washington D.C., USA
Tel. (202) 473 8438
Fax (202) 477 0380
e-mail: tahler@worldbank.org

International Monetary Fund (IMF)

Mr. Alexander Kyei
Resident Representative
International Monetary Fund (IMF)
Addis Ababa, Ethiopia
Tel. 627800/627803
e-mail: akyei@imf.org

SPA Secretariat

Ms. Alison Rosenberg
Acting Manager
Africa Regional Partnerships Group
World Bank
Washington D.C. USA
Tel. (202) 473 4625
Fax (202) 473 8046
e-mail: arosenberg@worldbank.org

SPA Technical Group Co-chairs (DFID/EU)

Mr. Nick Amin
Representative
Co-Chairs Technical Group
Strategic Partnerships with Africa
Tel. (44-20) 7023 0874
Fax (44-20) 7023 0342
N-Amin@dfid.gov.uk

Organization for Economic Cooperation and Development (OECD/DAC)

UNDP