The World Bank
notes
MARCH
PREM
2006
NUMBER 107
PREM ANCHOR
PREM Anchor Support to the Africa Region
The goal of the Poverty Reduction and assess how to better align PRS reporting
Economic Management (PREM) Net- with budget reporting. Work is also under
work is to shape policies and to help way to strengthen the quality of second
countries build successful national strate- generation PRSs and their relevance as a
gies for sustained, shared growth, and to framework for scaling up and improving
strengthen partnerships at the country aid effectiveness. To this end, the Anchor is
level for improved aid effectiveness. exploring ways of using the PRS process to
There is no region in which this goal is increase aid effectiveness, along with other
more challenging than in Africa. bilateral donors. A conference with several
African countries and donors on this topic
In support of the Africa Action Plan is tentatively planned for the fourth quar-
(AAP), the PREM Anchor has actively ter. Both of these activities feed directly
stepped up its support to the Africa Re- into the AAP’s objective of supporting
gion (AFR) in fiscal year 2006 (FY06). results-oriented national strategies.
As of the end of January 2006, Anchor
staff had provided nearly 83 staff weeks The effectiveness of aid will ultimately
in direct cross-support alone. Activities be judged by the impact it has on the
have included knowledge generation, ground. The Anchor’s work on poverty
high-level policy support on missions, the analysis, monitoring, and impact evalua-
development of toolkits and diagnostics tion is heavily focused on the AFR. Some
to improve policy advice on growth strate- examples of collaboration include a
gies, among others. Most of this work has conference on improving the quality of
been provided on a demand-driven basis, impact evaluations of government pro-
and PREM plans to continue providing grams in Kenya; the implementation of
such services subject to its budgetary and six country studies to identify the most
skills capacity. This note illustrates how promising institutional arrangement for
the PREM Anchor’s support to the AFR PRS poverty monitoring systems; and
connects with the objectives of the AAP. a workshop organized in collaboration
with the African Development Bank
AAP Focus: Results Framework (AfDB) and several other bilaterals on
for Achieving Impact how to deepen the growth diagnostics in
PRSs and strengthen the links to national
The PREM Anchor is working closely monitoring and budget systems.
with the AFR on ways to improve the re-
sults focus and analytical foundations of
AAP Focus: Building Capable
poverty reduction strategies (PRSs). A study
States and Improving
is under way on the integration of PRS
reporting and budget implementation Governance
covering eight African countries to im- A country’s ability to maximize and sus-
prove existing reporting instruments and tain growth depends on the quality of its
FROM THE POVERTY REDUCTION AND ECONOMIC MANAGEMENT NETWORK
and to more accurately and
Box 1: Direct Country Support for comprehensively monitor
Building Capable States and Improving progress on the ground; and
Governance
3) Helping governments im-
Strong institutions, good governance, and an under- prove the efficiency of in-
standing of the political economy in which PREM’s ternal and external controls
clients operate are necessary elements to providing solid that monitor budgetary ex-
policy advice and achieving results on the ground. Fol-
ecution to contain the mis-
lowing are examples of activities in support of this end.
In Kenya and Madagascar PREM has implemented
use of public resources.
pilot leadership and ethics programs focused on In addition to providing direct
building effective cabinet teams to further reform and country support (as illustrated
improved accountability and service delivery for the
in box 1), PREM Anchor staff
citizens. This has been done through a series of cabinet
retreats for both technical skills and team building.
have been actively involved in
Analytical and team dialogue support was provided the Africa Capacity Building
for Uganda’s political economy assessment and follow- Initiative and the committee
up discussions in response to a similar steep deteriora- responsible for the World
tion of governance. Bank’s new capacity building
PREM provided high-level support to the Ethiopia strategy for AFR. Working
country team in response to an urgent request for a with the regional manage-
governance assessment to provide the analytical and ment team, support was also
strategic foundations for an Interim Strategy Note in provided on developing a
response to the political crisis.
strategy for risk mitigation and
In Rwanda, cross-support was provided for the PRS
on Service Delivery and Decentralization & Territorial
effective control of corruption
Reform, which included a high-level conference with in the AFR, which included
the prime minister and ministers in attendance. methods to identify high-risk
On the public expenditure side, a clinic was held for countries, such as corruption
a visiting Democratic Republic of Congo delegation on and governance indicators
Public Expenditure Tracking/Managing Teachers Top and diagnostics.
Ups as part of a Development Policy Loan.
Advisory support was also provided to the Gov-
AAP Focus: Supporting
ernment of Lesotho on Medium-Term Expenditure
Frameworks and lead Public Finance Assessments for the Drivers of Growth
18 HIPC G-8 Debt Relief countries’ eligibility. Growth is at the core of PREM’s
work program. Its focus contin-
institutions and the capacity to efficiently ues to be on providing sound
and effectively deliver services. The PREM policy advice to help countries accelerate
Anchor is working with the AFR to build and sustain growth through the medium-
on efforts that African countries have term, of which supporting the drivers of
taken during the past few years and in growth is key. In FY06, the Anchor’s focus
support of the AAP’s goal of building ca- on Africa has been extended substantively
pable states and improving governance. and sharpened to reflect the priorities
Efforts have largely focused on: set out in the AAP. The topics PREM is
working on include:
1) Building capacity to strengthen gov-
ernance in client countries;
Macroeconomic Implications of Scal-
2) Creating new instruments to better ing Up: PREM Anchor is examining the
tailor CASs and operations to political macroeconomic implications of aid flows
governance and corruption realities using case studies on Uganda and Tanza-
PREMNOTE MARCH 2006
nia, and examining the consequences of Regional Integration: PREM has been
sharp increases in aid for infrastructure working closely with the AFR Vice-Presi-
development in 12 African countries. dency and the Department for Regional
A toolkit that enables users to conduct Integration in preparing a strategy for
country-specific analysis is under devel- engagement and supporting dialogue
opment. with the EC on Economic Partner-
ship Agreements. It is also providing
Medium-Term Growth Forecasts: The technical assistance for the Common
application of new approaches to bench- Market for Eastern and Southern Africa
mark medium-term growth forecasts for (COMESA).
all African countries, with the intention
of making risk analysis more realistic, is Debt Management: The PREM Anchor
under way. Given the vulnerability of Af- has comprehensive knowledge about Af-
rican oil exporters and importers, PREM rican debt issues and continues to provide
is analyzing the fiscal and oil-wealth cross-support and technical advice on the
management implications of the oil price implementation of the HIPC Initiative,
shock for Nigeria and other African oil the low-income debt sustainability frame-
exporters and importers. work, and additional debt relief proposals.
For example, by the end of FY06, Anchor PREM Anchor is
Creating the Export Push: The Anchor is staff will have worked with country teams currently tackling
looking at the institutional and economic on debt sustainability analyses for most problems related
constraints to export diversification and African IDA countries. Staff also provide
competitiveness in Africa. In a related on-going advice on issues related to debt
to migration, labor
context, it is also studying the kinds of and growth, borrowing strategies that markets, and eco-
tertiary skills that are needed to promote prevent a rapid reaccumulation of debt, nomic mobility and
higher value exports in Africa. Further- and increasing debt-management capac- their links to poverty
more, PREM is providing cross-support ity in African countries (in collaboration
in the areas of trade policy, trade facilita- with the AfDB). and growth.
tion, and standards and co-task-managing
Diagnostic Trade Integration Studies in AAP Focus: Participating in and
Rwanda and Niger. This work has largely Sharing Growth
focused on countries in the Integrated
Framework; however, significant work (Connecting the Poor to Markets—Scaling
has also been conducted in Kenya, where Up Human Development)
PREM has had a major role in staffing the Making Africa’s growth more inclusive
missions and participating in the follow- means connecting the poor to markets,
up policy dialogue. scaling up human development, and
ensuring that both men and women
Trade Facilitation: PREM supports the participate in and share the returns from
trade facilitation negotiations in Geneva growth. In support of these efforts, the
and the capacity building initiatives it has PREM Anchor is currently tackling prob-
or will be carrying out for African coun- lems related to migration, labor markets,
tries with trust fund support from the and economic mobility and their links to
European Community (EC), the United poverty and growth. For example, it has
Kingdom, and Sweden. PREM staff are undertaken a joint program with the AFR
also highly engaged in the Integrated to improve the quality of informal labor
Framework and the broader Aid for Trade diagnostics in the region. In addition,
Initiative, which will provide large returns the Moving Out of Poverty Study entailed
for the AFR. close collaboration with national policy
PREMNOTE MARCH 2006
institutes and country teams to deepen development and gender is under way in
PREM’s understanding of economic Tanzania and Ghana. PREM is working
mobility, using both quantitative and with its colleagues in the AFR to organize
qualitative methods. A flagship effort, workshops and training on gender and
the Pro-Poor Growth Diagnostic Facility, economics during the coming months.
is also under way, which will help support
increased donor collaboration and sup- AAP Focus: The Scaling
port for country-focused analytical work Up Agenda
on the linkages among poverty, equity,
and growth in the region. (Strengthening Partnerships at the
Country Level)
Physically connecting the poor to markets In close collaboration with the Organi-
and scaling up human development will sation for Economic Co-operation and
require additional investments in infra- Development (OECD)-Development
structure, health, and education. PREM Assistance Committee (DAC), PREM
is developing analytical tools to assess the has brought together DAC members,
fiscal space available for these investments multilateral development banks, the
and conducting detailed assessments of International Monetary Fund (IMF)
PREM has the main dimensions of the fiscal space and the United Nations Development
stepped up efforts problem. The empirical pilots for this work Programme (UNDP) to discuss practi-
will focus on Africa. To ensure that these cal steps to help ensure the effective use
to accelerate investments are used efficiently and to help and delivery of aid and to support scal-
progress toward improve the monitoring of sector specific ing up initiatives. The topics this group
the gender MDG public expenditures, PREM is conducting is addressing include achieving greater
and draw links an assessment of the cost performance of predictability and appropriate flexibility
service delivery in which pilots are also of donor financing; strengthening the
between gender being carried out in the AFR. poverty reduction strategy process; and
and growth. energizing the consultative group and
Finally, shared growth cannot be achieved roundtable processes to achieve clar-
if more than half of the population is left ity and secure the financing needed for
out. To help ensure that both men and country plans to ramp up MDG efforts.
women participate in and benefit from Work is under way to strengthen the con-
growth, PREM has stepped up efforts to sultative group/roundtable processes at
accelerate progress towards the gender the country level to better link resources
Millennium Development Goal (MDG) to results at the country level.
and draw links between gender and
growth. A growth and gender assessment This PREM Note was issued by the PREM VP
was recently conducted for Kenya and under the guidance of Danny Leipziger, Vice-
work on the links between private sector President and Head of the Network.
This note series is intended to summarize good practices and key policy findings on
PREM-related topics. The views expressed in the notes are those of the authors and do
not necessarily reflect those of the World Bank. PREMnotes are widely distributed to Bank
staff and are also available on the PREM Web site (http://prem). If you are interested
in writing a PREMnote, email your idea to Madjiguene Seck. For additional copies of this
PREMnote please contact the PREM Advisory Service at x87736. This PREMnote was edited
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Prepared for World Bank staff