Ethiopia: experience and process of macroecomics and health

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Designing a Policy Matrix for Development Policy
Lending
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Rwandas Poverty Reduction Strategy Paper
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Budget Support to Rwandas Poverty Reduction
Strategy Joint PRSP matrix as a tool for the
development of sectoral strategies basis of
government led harmonization From
Conditionality to Ownershipthe experience w.
integrating matrices under government leadership

• Mohamed Toure, Agnes Soucat, Kene Ezemenari,
  Negda Jahanshahi,

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OUTLINE

• Background
• Process
• Integrating Limelette I principles
• Results
• Next Steps
• Some remaining Issues

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Background

• Genocide in 1994 1 million deaths
• Post conflict recovery average growth rate of 7
  
• Vision 2020 GoRs 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

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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 199597 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  

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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/performanc
  e 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.

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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

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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
  

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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

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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)

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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

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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

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Integrating Limelette I Principles

• Focus on 6 priority areas of PRSP
• Led by GoR / Head of State
• Focus on MDGs through growthservicesaccountabili
  ty
• 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

• Based on PRSP
• National ownership
• Result Orientation
• Link priority sectors with budget
• Increased Use of Programmatic Support
• Government lead in sector and budget support
  groups
• Mission timing synchronized with country process
• More delegation to the field
• Rely on each others document

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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,
  macro-management, investment climate
• PRSP matrix included in APR

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PRSC focus as part of governments 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

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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

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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,

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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.

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Issues

• Highly committed government and ambitious program
  of reform vs strong dependence on budget support
  (50 ) gt tensions on who runs the show
• Rwandas program development more government
  driven than donor driven (2nd generation SWAP)
  difficulties of donors to follow government speed
  gt rationale for slowing down linked to
  government or donors capacity ?
• Normative process versus country
  tailored/flexibilitygt applicability of other
  countries models to special case of Rwanda
• Communication local dialogue versus HQ loop

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• THE END
• -- 000 --
• THANK YOU

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PRSP Coverage

• 1. Agriculture transformation and rural
  development,
• 2. Human resources development and improving the
  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