Transcript 2010 MDBS ANNUAL REVIEW - Ministry of Finance

An Introduction
to the Multi-Donor
Budget Support
in Ghana
Prepared by:
MDBS Communication
Group
Outline
• What is budget support?
• MDBS Six Pack:
– Financial contribution
– Alignment to government systems
– Performance & conditionality
– Donor harmonisation
– Policy dialogue
– Technical assistance & capacity support
• Future of the MDBS
What is budget support?
• Many perspectives:
– The economist’s view
– The systems specialist’s view
– The development planner’s view
– The policy maker’s view
– The critic’s view
What is budget support: an
Economist’s view
• A transfer of funds from the donor to the
Treasury of the recipient country, where it
is mixed with the recipient country’s own
resources in support of the overall budget.
• Underpinning: allocative efficiency
What is budget support: a
Development Planner’s view?
• Unearmarked support to the recipient
country’s own growth and poverty
reduction policies
• Main underpinning: without ownership no
progress
What is budget support: a
Systems Specialist’s view
• Funds spent in accordance with the
recipient country’s own procedures and
rules.
• Main underpinning: by using country
systems you strengthen them, by avoiding
them you weaken them
What is budget support:
a Policy Maker’s view
• Funds provided in view of an overall policy
and political dialogue on inclusive
development and equitable growth.
• Underpinning: Development progress can
only be achieved through strong political
will, adherence to principles of good
governance, which should be addressed
at the highest level. (Chair at the table)
What is budget support:
a Critic’s view
• Budget support is a blank cheque
transferring taxpayers’ money to corrupt
regimes who use it for personal gain.
• Underpinning: Africa’s neo-patrimonial
system does not meet any standards of
good governance and accountable use of
public funds.
What is budget support:
the six pack
1. Financial contribution
2. Alignment with government systems
3. Performance agreement & conditionality
framework
4. Donor harmonisation
5. Policy dialogue
6. Technical assistance & capacity support
The MDBS Six Pack
• MDBS = Multi-Donor Budget Support
Financial contribution (1)
DISBURSEMENT
2009 (US$M)
PLEDGES
2010 (US$M)
African Development 79.5
Bank
15.0
United Kingdom
70.2
77.5
Canada
24.3
17.9
Denmark
11.8
12.6
European
Commission
102.2
60.0
France
23.9
9.0
Japan
3.6
3.7
Germany
13.5
19.4
Netherlands
36.5
28.7
Switzerland
8.6
7.7
World Bank
151.0
200
Total
525.2
451.5
Source: Ministry of Finance and Economic Planning (MoFEP)
Financial contribution (2)
2003
2004
Pledges in
USD
281.40
302.16
Actual in
USD
277.90
309.03
2005
2006
2007
2008
285.33
372.43
319.57
347.90
2009
601.10
281.88
312.16
316.57
368.13
525.20
Source: Ministry of Finance and Economic Planning (MoFEP)
Financial contribution (3)
40
35
33,02
30,01
MDBS as % of total aid
34,62
30
29,34
26,74
26,48
25,72
2007
2008
25
20
15
10
5
0
2003
2004
2005
2006
2009
Year
Source: Ministry of Finance and Economic Planning (MoFEP)
Financial contribution
• Base component + Performance
component = total contribution
• Base component: good overall
performance, including all PAF targets and
triggers
• Performance component: good
performance in key areas (triggers),
leading to additional funding (WB and
AfDB use triggers as their prior actions)
Alignment with government
systems
• Development Partners rely on:
– Ghana’s policy plans for priority setting
– Ghana’s budget for targeting and expenditure
– Ghana’s accounting and auditing for
accountability
– Ghana’s M&E and reporting for justification
– Ghana’s Parliament for democratic
supervision
Performance & Conditionality
• Framework Memorandum (2008):
– Underlying principles
– Performance Assessment Framework
– Holistic Assessment
– National Audits (Ghana Audit Service)
Underlying principles
• Continuing sound macro-economic policies and
management
• Commitment to achieving the GPRS II objectives
and MDGs
• Sound budgeting and PFM systems
• Continuing peace and respect for human rights,
the rule of law, democratic principles and the
independence of the judiciary
• Good governance, accountability of the citizenry,
and integrity in public life, including the fight
against corruption
Performance Assessment
Framework
• Agreed set of specific targets against
which overall progress of the recipient
government is assessed.
• Taken from national policy documents (in
particular the GPRS II)
• A selected group of these targets
determine the performance tranche. These
are called triggers.
• Currently: 42 targets of which 15 triggers
Basic PAF structure
Target 2009 Means of
(assessed
Verification
in 2010)
Target 2010 Target 2011
Expected
outcomes
45% of
deliveries
attended
trained
health
workers
55% of
deliveries
attended
trained
health
workers
Improved
maternal
health;
less
maternal
and
neonatal
mortality
Annual
Review
Report
(baseline
39.5%)
60% of
deliveries
attended
trained
health
workers
Holistic Assessment
• Annual Progress Review (i.c.w. NDPC)
• Macroeconomic performance (i.c.w. IMF)
• Sectoral progress assessments
National Audits
• Purpose: Since national systems are used
for expenditure of funds, the national
audits are used to verify whether the
budget has been executed in an
accountable way, including public debate
by Parliament.
• We use in principle:
– Audit of the Consolidated Fund
– Additional: Audit of Selected Flows
Donor harmonisation (1)
• MDBS Core Group: 11 development
partners (African Development Bank,
Canada, Denmark, European Union,
France, Germany, Japan, Netherlands,
Switzerland, UK, World Bank)
• Three co-chairs: World Bank (permanent),
Switzerland (current), Canada (incoming)
• Observers: UN, IMF, Norway, US, MoFEP,
NDPC
Donor harmonisation (2)
• 14 sector working groups, including: sector
ministries, MoFEP, NDPC, development
partners (both MDBS and others), CSOs
• Joint Heads of Cooperation
• Joint Heads of Mission
• MDBS Secretariat at MoFEP
Donor harmonisation (3)
Heads
of
Mission
Supervision
+
High level dialogue
Heads
of
Cooperation
Coordinating structures
+
Broad policy dialogue
Sector WG
Sector
Ministries
CSOs
Sector WG
Sector
Ministries
CSOs
Sector coordination +
sector policy dialogue
Sector WG
MDBS
Core Group
Sector
Ministries
MoFEP
CSOs
CSO Plaforms
Donor harmonisation (4)
• New actors the MDBS is establishing
relations with:
– Parliament
– Independent Goverment Institutions (CHRAJ,
Media Board, etc.)
– Traditional authorities
Policy Dialogue (1)
• Umbrella term for all coordinated
interaction within the MDBS harmonised
structures between (executive)
government and development partners.
• Increasingly, this policy dialogue broadens
to other actors, like CSO, media,
Parliament, etc.
Policy Dialogue (2)
• Coordinated interaction includes (but are
not limited to):
– Annual review (incl. PAF, holistic assessment)
– Forward looking PAF negotiations
– Budget discussion
– Audit discussion
– Retreats
– High-level meetings
– Sector working group meetings
Policy Dialogue (3)
• Cross-Cutting Issues: cross-sectoral
implications that cannot be dealt with in
one sector alone and/or which require a
higher-level of strategic dialogue
• Underpinning: To feed into the technical
discussions of the Consultative Group
(CG) meetings thus receiving attention at
a higher level with the hope of influencing
policy decisions
Policy Dialogue (4)
2010 Topics
• Climate Change
• Implications of Decentralisation on
Public Sector Reform
• Ensuring a Credible National M&E
Statistics System
• Budget-related Issues
Technical assistance & capacity
development
• No TA fund under the MDBS, but targeted
support provided
• Work done through sector groups and
individual DPs
• TA coordination still limited, and beyond
scope of MDBS
Future of the MDBS
• Strong focus on Sector Working Groups
• Inclusion of broad range of stakeholders
• Aid Policy: budget support preferred
modality
• Issues of concern: quality of the budget,
audits (and follow up), oil, MIC-status,
MTDF.
www.mofep.gov.gh/mdbs.cfm