SPA Budget Support Alignment Survey, Introduction 1 Introduction Background and objectives of the SPA’s budget support alignment exercise This report presents the main findings of the SPA Budget Support Working Group (BSWG)1 monitoring exercise, which took place August-November 2003. The aim of this exercise was to obtain information on progress made by budget support donors in aligning and harmonising their activities in a number of PRSP countries in Africa. The results obtained from this exercise represent the most comprehensive data currently available on the progress of budget support alignment with the PRS. The exercise builds on the work of the SPA missions to Ethiopia, Rwanda and Senegal in 2002. The missions concluded that the implementation of Poverty Reduction Strategies (PRSs) would be strengthened if closer links could be forged between national policy-making processes, budget cycles and reviews of sectors and the PRS. Donors were recommended to align and harmonise their activities behind national processes, in particular to strengthen links to the annual PRS progress reviews and to budget cycles. The core message to donors was to step back and allow national processes and systems to work.2 The new approach requires that donors be aware of the potential damage caused by multiple donor demands (for example conditionalities, reviews, missions and reporting requirements parallel to national systems for reporting and policy making). The joint IMF-World Bank Concept Note entitled ‘Aligning Donor Budget Support with the PRSP Process’ captures the core messages of the SPA missions and goes beyond them by spelling out many of the operational implications. In order to take forward this agenda, the BSWG proposed to undertake a survey of progress in alignment of budget support using a questionnaire (in three parts). The survey was intended to collect useful information. However, it was also hoped that the exercise would help partners to contribute more effectively to implementing country-owned PRSs in countries in Africa. That is, the purpose of the survey was to go beyond conventional information- collection exercises. By the process of administering the questionnaires, the intention was to: (1) stimulate dialogue between donors and governments on the 1 The Strategic Partnership with Africa (SPA) is the forum of multilateral and bilateral development agencies on assistance to low-income Africa. The day to day work of the SPA is undertaken by a number of working groups of which the Budget Support Working Group (BSWG) is one. According to its work plan, the BSWG is focusing on PRS alignment issues arising from budget support provided by bilateral and multilateral donors. The BSWG’s main function is to catalyse change in specific countries: to help identify areas of misalignment; to suggest ways of overcoming these; and to support local initiatives. In drafting this report, the BSWG Co-Chairs have been assisted by David Booth and Nicola Pratt under a technical support contract between UK DFID and the Overseas Development Institute, London. 2 SPA Missions to Ethiopia, Rwanda and Senegal, ‘Harmonisation of Support for Poverty Reduction Strategies: Synthesis Report’, 2002. SPA Budget Support Alignment Survey, Introduction 2 PRS-alignment issue; (2) report on the main findings of this exercise to all respondents, SPA and OECD-DAC, in particular identifying good and bad practices; (3) identify countries where close follow-up and support by SPA would prove useful; and (4) lay the basis for monitoring progress annually. The countries listed below were selected to conduct the SPA monitoring exercise. These countries were selected because they have started a PRS process and are current (or prospective) beneficiaries of budget, and/or balance-of-payments, support. The Economic Commission for Africa (ECA) followed up with government representatives to ensure the fullest possible participation. The countries that actually responded are also listed below Countries selected to participate in the monitoring exercise Benin, Burkina Faso, Cameroon, Chad, The Gambia, Ghana, Ethiopia, Guinea, Ivory Coast, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Sierra Leone, Tanzania, Uganda, Zambia Countries that responded to the monitoring exercise Benin, Burkina Faso, Chad, Ethiopia (Part 1 and Part 3 only), The Gambia, Ghana, Kenya, Madagascar, Malawi, Mali (partially), Mozambique, Niger, Rwanda, Senegal, Sierra Leone, Tanzania, Uganda, Zambia The questionnaire The questionnaire (reproduced in Annex 1) was in three parts. ■ Part One was completed jointly by government and representatives of all budget support donors. It aimed to obtain an overview of the PRS process to date. Answers were discussed during a meeting between government and donor representatives. As a result, almost all countries returned an agreed joint answer for Part One. ■ Part Two was completed by each budget support donor. The aim of Part Two was to focus on the alignment of budget (and balance of payments) support with national PRS and budget processes. ■ Part Three was completed by government representatives. The aim of Part Three was to obtain a view from government officials of their perception of how donors are aligning with national PRS processes. Questions were asked with regard to alignment and coordination of donors in reviews, missions, reporting requirements and selection of conditionalities, amongst other issues. Governments were asked to rate donors’ performance on a scale of 1 (poor) to 5 (excellent). The purpose was not to embarrass donors but to identify further opportunities and constraints to alignment. In each country, a lead donor was identified with responsibility for organising the completion and return of the questionnaires. Their hard work was essential in SPA Budget Support Alignment Survey, Introduction 3 ensuring the relatively high rate of return for this exercise. The role of lead donors was to: ■ convene a meeting of representatives from government and budget support donors; ■ support donors in completing the questionnaires; ■ ensure government gets an adequate opportunity to comment on alignment and harmonisation; ■ attempt to form a consensus on key issues outlined in the questionnaire. The process ■ Initial findings of this exercise were presented to the OECD DAC working party on aid effectiveness meeting at the end of October 2003 and to the PRSP-LG (Learning Group) meeting on 5 December 2003. ■ The final report is due to be presented at the SPA Plenary in the third week of January 2004. Report structure and findings The report has four sections. The first three sections outline the findings corresponding to the three Parts of the questionnaire. The fourth presents general conclusions, including some thoughts on the lessons for future efforts to benchmark progress in alignment of budget support. The annexes include further details on the donor responses, as well as the text of the questionnaire and the explanatory note that accompanied it. The main conclusion of this report is inevitably that there is still some work to do in improving alignment of budget support programmes with PRSPs and national systems. The challenge includes donors doing more to align their procedures and requirements with the PRS; donors working harder at harmonising and coordinating their procedures and requirements with one another; and governments improving national systems and procedures related to the PRS, particularly the rigour and effectiveness of PRS monitoring and review.