Budget Support and Beyond: Can the Paris Agenda on Aid be Delivered? The case of Rwanda
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1 Budget Support and Beyond: Can the Paris Agenda on Aid be Delivered? The case of Rwanda GS Muhura ESSA Gisenyi Collège ST André Collège Christ-Rois Lycee de Zaza E.S.Shyangi
2 Introduction Key Policy instruments Vision 2020 PRS, NIS, PRGF, MDGs & NEPAD EDPRS External Aid Policy Rwanda receives in excess of $400 million of Aid per year (about 51% of the national budget) Debt relief - Rwanda has reached HIPC completion point
3 After Rome Declaration on Harmonization (Feb. 2003) Aid coordination, harmonization and alignment (ACHA) framework Development Partners Coordination Group or DPCG (Government, Multilaterals, Bilaterals, NGOs) Budget support harmonization group or BSHG (PRS review (June), Public Financial Management + FARAP (March & September) and Macroeconomic performance (March & September)) Harmonization and alignment in Rwanda of projects and programmes or HARPP Cluster system
4 Key problems Capacity problems (genocide, multiple aid modalities and processes, etc ) Many frameworks, MoUs and agreements for aid management (Bilaterals, multilaterals, UN, development funds) Predictability in terms of volume, quality and timing of aid (politicisation of aid, excessive conditionality) Transaction costs (Donors continue to place significant demands on Govt in terms of time, reporting needs, and use of resources through
5 Key Problems Cont d Incomplete reporting of ODA including that provided through NGOs, especially for projects (reduces transparency, and hinders the ability of Govt to monitor and manage ODA. This info is critical to planning, budgeting and execution) Alignment (weak Govt strategies/planning, some donor agencies still constrained by their own institutional arrangements, off-plan and offbudget) Vertical funds and technical assistance (distortionary and lack of skills transfer.
6 After Paris Declaration on Aid Effectiveness (March 2005) Current Aid Policy (approved on 26th July 2006) Preferred Aid Modality Un-earmarked budget support, sector budget support followed by stand-alone projects which must be on-budget and on-plan and prefers pooled resources rather than ear-marked for specific projects Support to decentralized entities to be channelled through Common Development Fund (CDF) All technical assistance to be provided in a coordinated manner through national systems (be overseen by the Human Resources and Institutional Capacity Development Agency (HIDA) Govt will encourage pooling of resources for this initiative) NGOs undertaking service delivery function to provide concise and timely information on all activities (Laws and new manuals for local & International NGOs)
7 Current Aid Policy Vertical funds to align with sector plans and on-budget (guidelines will be provided to avoid any distortions) Data on Aid flows to be collected from donors in a structured manner using the Development assistance database (DAD) info shared b/w Govt and Donor agencies Responsibilities in the mobilization, negotiation and management of external assistance clarified (Finance, Foreign Affairs, Line Ministries, External Finance Unit, CEPEX, etc ) Clear role of DPCG formalized (in overseeing aid coordination and reviewing progress made in the fulfilment of commitments identified in the Paris and Rome declarations)
8 Current Aid Policy Prefers assistance in the form of Grants but loans will only be considered if they are highly concessional with low transaction costs Govt will decline assistance where transaction costs are unacceptably high, insufficient alignment to Govt priorities or conditionalities are excessive. Mutual accountability Govt accepts the principle of an independent mechanism for regular monitoring of the performance of both Govt and its partners against accepted criteria. Preference for Joint Missions and analytical work, and delegated cooperation.
9 Key issues for Budget Support Strengthening Planning Process (sector wide approach, sector plans, development plans) Strengthening Public Financial Management and accountability Government ownership and leadership (Policies, plans, processes) Framework for coordination, information sharing and dialogue at the national level (Partnership) Capacity for national monitoring and evaluation system (including outcomes/results)
10 Thank you for your attention End
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