Transcript Slide 1

Perspectives of the Donor Community
and International Organisations
Aid for Trade/Trade Facilitation
Crown Agents Experience of Project Funding
Mechanisms
Workshop on Trade Facilitation and Aid for Trade
12-13 March 2009, Addis Ababa
Trevor Simumba - Senior Advisor- Customs & Trade
Facilitation
THE CONTEXTUAL CHALLENGE
 Donors have come to recognise that recipient country
ownership is essential to the effectiveness of aid and
development efforts.
 This can only be achieved if recipient governments begin to
take a more proactive role in determining how aid is allocated
and managed.
 To date there are relatively few examples of recipient
governments taking a lead in their relationships with donors.
 This is perhaps not surprising given the asymmetry of resources,
power and capabilities which characterises most of the links
between donors and recipients.
 This presentation highlights the efforts and experience of
Crown Agents to help bridge this gap
Donor Funding
(in response to EOI’s and RFP’s)
 Normally time consuming, laborious and hugely resource
intensive
 Not unusual to find the project objectives already partresolved by other projects by the time implementation starts
 As a result duplication of efforts from different donors arise
and, on occasion, even conflicting objectives through
misunderstanding of the needs or changes in circumstance
 The requirements for proposal completion are becoming more
and more prohibitive
 The complexity of the proposal results in a longer evaluation
period
Part Donor/Part Self-Funding
 A donor may contribute to a project’s funding in the
initial stages but assumes some form of financial
commitment from the recipient client
 The ‘pump-prime’ funding by the donor gets the
project up and running
 Success of the project (particularly with
trade/revenue enhancement projects) may even
mean minimal input from the client which may result
in lower political commitment
Self-Funded Projects
 Self-funding demonstrates real commitment and
high level political will
 Self-funding projects can be implemented more
quickly with the end-receiver client talking
directly with the service provider
 CA projects in Public Finance Management have
demonstrated that financial commitment from the
client can reap rewards from enhanced revenue
generation
Private Public Partnership
 Crown Agents has been exploring the possibility of
private public partnerships (PPP), where banks or
other financial institutions take the place of
donors
 In Customs/Tax modernisation projects, as long as
there is high level commitment it is possible for
bank funding to pump/prime a project and
repayment to come from increases in revenue
collected
Challenges experienced
 Low technical capacity of those requiring
funding to draft an appropriate request to
donors
 Reluctance to take necessary accountable
decisions to apply for funding
 Lack of understanding about funding options
 Inadequate country public finance systems that
would allow more direct budgetary support
 Poor macro-economic environment
Aid for Trade as a new Aid Funding Mechanism
‘Partnership’ and ‘Mutual Accountability’ should be the
foundations of the new aid relationship?
 Aid for Trade is a major part of this new aid relationship
 Required to assist developing countries take advantage of the
liberal global trading environment that is the expected outcome
of the Doha Development Agenda.
 However, there is also a political economic dimension to it
 Although all countries should benefit from a liberalised trading
system in the long run, in the short run there will be winners
and losers
 An Aid for Trade mechanism should assist with the buy-in of the
short-term losers
Useful Lessons Learned
 Business has a central role in developing trade
“Governments may create trade rules, but it is business
that actually creates jobs and opportunities” (ITC)
 It is important that AfT initiatives focus more on the supply
side constraints and infrastructure needs for trade
 There is also need to carefully consider the political
economic dimension in all these AfT initiatives
 It is unlikely to expect that bilateral donors (wealthy
nations) are willing to provide advice on trade negotiating
strategies or export development which conflict with donor
nations’ economic interests.
Our Approach to Aid for Trade
 “Ownership” means that key players — business,
government and non-governmental organizations (NGOs) —
need to work together closely
 CA has a unique focus on developing trading activity and
building confidence between business and government
 Our approach to Aid for Trade is based on ‘leadership’ and
‘ownership’ by beneficiary countries
 It is a process in which countries actively engage, with CA
support, in assessing trade development needs, defining
priorities and designing highly targeted projects.
The Focus of Aid for Trade Going Forward
In Conclusion, we recommend three broad areas on
which to apply aid for trade in Africa:
 Policy: National and intra-regional policies to support
trade development. At the national level, cross-border
trade facilitation; export strategies; rule-making in
conformity with international standards
 Supply side: Trade-related technical assistance that helps
countries develop the skills and capacity to export in
competitive global markets.
 Infrastructure: Trade Corridors, one stop border posts,
roads, ports, utilities and other infrastructure necessary
for trade