Transcript Designing a Policy Matrix for Development Policy Lending

Designing a Policy Matrix for
Development Policy Lending
Rwanda’s Poverty Reduction Strategy
Paper
Budget Support to Rwanda’s Poverty
Reduction Strategy
Joint PRSP matrix as a tool for the development of
sectoral strategies & basis of government led
harmonization
From Conditionality to Ownership:
the experience w. integrating matrices under
government leadership
Mohamed Toure, Agnes Soucat, Kene Ezemenari, Negda
Jahanshahi,
OUTLINE
 Background
 Process
 Integrating Limelette I principles
 Results
 Next Steps
 Some remaining Issues
Background
 Genocide in 1994; 1 million deaths
 Post conflict recovery; average growth rate of 7 %
 Vision 2020: GoR’s long term vision
 PRSP July 2002
– Comprehensive, ambitious government program, including
six priority areas
– Well articulated sectoral vision in education, health, water
– In line with MDGs objectives
 PRSP monitoring report , July 2003
– Good progress on social sectors outcomes
– Progress in poverty reduction
– Progress on reform
Structural Reforms 1995-2003: selected examples
 Public enterprise reform: By 2003, 50 out of 70 public
enterprises had been sold.
 Trade liberalization: The trade restrictiveness index fell
from 8 in 1995–97 to 2 by mid-2000.
 Exchange regime: A fully liberalized and market-
determined exchange rate system has been adopted,
foreign exchange bureaux licensed, and current account
restrictions abolished.
 Domestic prices and marketing: Price controls have been
eliminated for all but a handful of commodities
Significant achievements in the social sectors
 Outcomes:
– 67% primary school completion
– 75% immunization coverage
– 90% utilization of antenatal care
 System building/reforms
 Strong HIV/AIDS program, good availability of essential drugs
 Most successful micro-insurance schemes in SSA
 Half of health providers are private, receiving subsidies from
government
 Successful experiences with contracting/performance based
payments
 Successful experiences with grants for demand side subsidies for
education at district level
 Social sector budget allocations: Budget allocations to social sectors
have increased significantly in real terms since 1998. These allocations
are now protected from budget cuts.
Governance
 Economic governance: A National Tender Board was
created to oversee procurement. An independent
Office of the Auditor General was established.
FARAP Action Plan adopted in 2003.
 Expenditure management: Expenditure monitoring
system,CEPEX, MTEF process established. Pilot
Joint Monitoring system implemented in 2003 ;
 Relatively transparent financial management and
procurement, low levels of corruption
Situation in 2003
 Good understanding of sectoral issues due to very
strong analytical underpinnings: PER/PEMR, PETS,
FARAP, Poverty Assessment, DHS, Country Status
Report on Education and Health etc…
 Requests from government: focus on education,
health, water, energy and agriculture (export
promotion), as well as public sector reform
 However: no fully developed sector strategy papers,
unclear articulation of Mid Term programs
Challenges facing PRSC
 Limited capacity at country level: PSCBP as a
companion to the PRSC
 Large coverage of PRSP: focus on policy dialogue in
services, fiduciary/accountability; complementarity
with investment projects
 Preparation timing (9 months): preparation
resources made available to government (Trust
Funds, consultants, government workshops);
emphasis on coordination (PAF); strong
involvement of non Budget Supporters
Process
 November 2003, MOU on harmonization and alignment of
budget support
 Use of PRSMR matrix as base document
 Expansion and further development of sectoral sections
of PRSP matrix
 Government taking lead role– donors engaged behind
the government in development of sector policy matrixes
as part of the sector strategy development process (“2nd
generation SWAPs”)
Process (cont.)
 The government's plans of action for various
programs/sectors (--i.e. FARAP, Education SWAP, and
sector strategies) have been developed in consultation with
donors (versus conditionality without adequate consultation
or prior analytical basis)
 Both budget support and non-budget support donors invited
by the government to assist in developing the matrix; non
budget support donors full participants in pre-appraisal and
appraisal missions of PRSC. Matrix became a basis for
promoting/facilitating harmonization
 Identification of triggers and conditionality is taken directly
from the PRSP matrix
Process (.cont)
 Identification of conditionality cleared with the
government so they have buy in
 Review cycle for PRSC and disbursement aligned
with the PRSP review process and government
budget cycle in line with the Partnership
Framework—
 In this context, having the MoU to begin with
provided framework for the PRSC and
harmonization
Integrating Limelette I Principles
Based on PRSP
National ownership
Result Orientation
 Focus on 6 priority areas of
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Link priority sectors with budget
Increased Use of Programmatic
Support
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Government lead in sector and
budget support groups
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Mission timing synchronized with
country process
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More delegation to the field
Rely on each others’ document

PRSP
Led by GoR / Head of State
Focus on MDGs through
growth+services+accountability
“2nd generation SWAP” (health)
Missions synchronized with
Fund and PRS, timeline
developed
Sector groups led by
government
7 field based staff, 6 staff
working on WB Projects in
Rwanda, 2 PRSC staff
PRSC relies on EU led FARAP
Results – Our assessment
 Strongly government owned policy matrix aligned
with sectoral strategies- with process led by Head of
State
 PRSP matrix presented to Cabinet for discussion/
approval
 PRSP matrix including health, education, water,
energy, public sector reform, agriculture, macromanagement, investment climate
 PRSP matrix included in APR
PRSC focus as part of government’s program
 Focus on MDGS achievements through i) private led growth
ii) services iii) strengthening of public sector underpinnings
 Strong focus on outcomes:
– macro-economic stability,
– time-lag to open a private business
– primary school completion rates,
– immunization coverage, use of bed nets, number and
rates of assisted deliveries,
– access to clean water, frequency of hand-washing,
– reduction in electricity shortages,
 Focus on accountability: results, contracts, transparency,
Voice
Next Steps (appraisal in July 2004)
 Focus of PRSC on five sectors in the three
years cycle, PRSC1 focuses on 2 sectors
with preliminary measures for other three
 Development of budget support matrix
including PRSC matrix
 Agreement on prior actions and triggers
Monitoring of the PRSP/PRSC:
 Rwanda approach is to monitor outcomes as part
of overall assessment of program
 Monitoring of Outcomes is essential
 However, exogenous factors outside of
government control influence outcomes; and there
are key actions or intermediate outputs required in
order to move toward final outcomes,
Monitoring (cont.)
Monitoring
of intermediate process/actions
plays following role:
– help identify areas where additional assistance to
government is warranted (particularly in context of limited
capacity)
– help to quickly identify potential problems/risks and signal
need for corrective action, etc. to ensure movement toward
final outcome
– helps in context of PRSC, in assessing the country's efforts
towards achieving agreed triggers/targets, particularly in
case where there are extenuating circumstances/exogenous
shocks that have compromised achievement.
Issues
 Highly committed government and ambitious program
of reform; vs strong dependence on budget support (50
%) => tensions on who runs the show
 Rwanda’s program development more government
driven than donor driven (“2nd generation SWAP”);
difficulties of donors to follow government speed =>
rationale for slowing down linked to government or
donors’ capacity ?
 Normative process versus country tailored/flexibility=>
applicability of other countries’ models to special case
of Rwanda
 Communication: local dialogue versus HQ loop
THE END
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THANK YOU
PRSP Coverage
 1. Agriculture transformation and rural development,
 2. Human resources development and improving the
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quality of life: including health, education and training,
water and sanitation , control and prevention of
HIV/AIDS.
3. Economic infrastructure: including energy for poor
households and rural enterprises,
4. Good governance: including civil service reform,
accountability and transparency.
5 Building an enabling environment for private sector
development: including private sector investment
promotion, financial sector reform, privatization of
state enterprises,
6. Social capital to support vulnerable groups