Aid management in fragile states: the case of the Central African Republic
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Aid management is key to improving aid effectiveness. While the environment in fragile states may seem complex, implementing aid management systems can actually be easy. The example of the Central ...

Aid management is key to improving aid effectiveness. While the environment in fragile states may seem complex, implementing aid management systems can actually be easy. The example of the Central African Republic shows how strong aid management can help to make sure that aid is properly tracked, aligned with local priorities and delivering the expected results.

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Aid management in fragile states: the case of the Central African Republic Presentation Transcript

  • 1. CENTRAL AFRICAN REPUBLIC | http://dad.minplan-rca.org Aid management in a fragile, low capacity context: the case of CAR Kersten JAUER United Nations Development Programme Page 1
  • 2. CENTRAL AFRICAN REPUBLIC Contents A. What makes CAR a fragile state B. How to adapt the aid management system (DAD) to fragility C. Why fragile can be easy D. How aid management drives policy (examples) Page 2
  • 3. CENTRAL AFRICAN REPUBLIC | http://dad.minplan-rca.org A. What makes CAR a fragile state Page 3
  • 4. CENTRAL AFRICAN REPUBLIC Situated in the heart of Africa CAR Indicator Value Size 1.1 x France Population 4.2m GDP per head $398 GDP (‘07) $1.7bn Aid $317m HDI 178 of 179 Life expect. 43 years Literacy 47% Page 4
  • 5. CENTRAL AFRICAN REPUBLIC Landlocked in the fragile centre Chad Sudan Nigeria Darfur CAR Cameroon South Sudan Bangui DRC Congo Uganda Gabon Rebellion or conflict Page 5
  • 6. CENTRAL AFRICAN REPUBLIC Political instability since Emperor Bokassa Jean-Bédel Bokassa Head of state 1966-1979 Crowned emperor in 1977 Page 6
  • 7. CENTRAL AFRICAN REPUBLIC No development in more than two decades One of only two LDCs where HDI is lower, not higher, than in 1985 Human Development Index (HDI) Growth, Base = 100 (1985) +45% Burkina Faso, Niger, Guinea-Bissau, Mali, Mozambique, Chad, Ethiopia CAR DRC +30% +15% 100 -15% 1985 1990 1995 2000 2005 Source: HDR (2007) Slide 7
  • 8. CENTRAL AFRICAN REPUBLIC Almost no IT capacity and knowledge Internet users per 100 inhabitants – almost nowhere lower than in CAR United Kingdom 79.6 United States 74.0 Thailand 18.0 Pakistan 10.5 India 7.0 Armenia 6.4 Sri Lanka 5.7 Zambia 5.6 Namibia 5.3 Rwanda 3.1 Afghanistan 1.8 Yemen 1.6 Somalia 1.1 Iraq 1.0 CAR 0.4 Source: ITU (2008) Page 9
  • 9. CENTRAL AFRICAN REPUBLIC Foreign assistance fell significantly Aid to Sub-Saharan Africa rose 87% since 1985, but fell 49% for CAR ODA Growth, Base = 100 (1985) Sub-Saharan Africa +100% CAR +80% +60% +40% +20% 100 -20% -40% -60% -80% 1985 1990 1995 2000 2005 Source: OECD (2007), Development Assistance Disbursements (constant USD), All donors Slide 10
  • 10. CENTRAL AFRICAN REPUBLIC Hardly any international presence Late 2006, only 4 int. NGOs, UN/EC there, but no World Bank, IMF, AfDB Birao Ndélé Paoua Kaga-Bandoro Bossangoa Bozoum Bouar Sibut Bambari Bangui EC France Slide 11
  • 11. CENTRAL AFRICAN REPUBLIC Government disconnected from aid effort Only 25% of development projects were documented in national accounts 160 development projects entered in DAD 40 documented in public expenditure report for 2007 0 50 100 150 200 Page 12
  • 12. CENTRAL AFRICAN REPUBLIC Rapid progress since 2007 From close to zero to DAD + HIPC completion in little more than 2 years • No Poverty Reduction <> PRSP published HIPC completion point reached Strategy (PRSP) Int. advocacy Donor Round campaign Table in BXL • No effective fundraising strategy started • No humanitarian clusters or Hum. clusters Sector and dev. coordination groups started regional dev. committees • No PIP, MTEF, etc. started Democratic • Knowledge about aid forms World Bank Paris Declaration signed elections and modalities virtually clears arrears and HIPC decision inexistent in ministry of point reached DAD project planning or finance started 2005 2006 2007 2008 2009 Slide 13
  • 13. CENTRAL AFRICAN REPUBLIC Sharp increase in presence creates volatility Late 2008, 30 international NGOs, UN, EC, World Bank, IMF, AfDB and more Birao Gordil Ndélé Kabo Sam Ouandja Paoua Bocaranga Kaga-Bandoro Bossangoa Bozoum Mbrés Bouar Obo Sibut Bambari JUPEDEC BANGUI EC France Slide 14
  • 14. CENTRAL AFRICAN REPUBLIC Sharp increase in aid creates volatility Annual aid gross disbursements by nature (origin of funds) Development $317m Humanitarian $251m $242m 33% Clearing of debt arrears $126m $117m 67% $81m $63m 2002 2003 2004 2005 2006 2007 2008 Page 15
  • 15. CENTRAL AFRICAN REPUBLIC | http://dad.minplan-rca.org B. How to adapt the aid management system to fragility Page 16
  • 16. CENTRAL AFRICAN REPUBLIC Achieve more by doing less Adapting aid management to fragility 5 Design incentives! 1 Have one tool only • No govt. signature under AWP • Integrate humanitarian and without data in DAD development aid well (OCHA) • No portfolio, UNDAF, CAS review • No other PIP or project tracking not based on DAD data database at national level (3W) 4 Stay relevant Improve contract and tool 2 • Make DAD key tool for PRSP, dev. • Design tight technical Key steps coordination groups, dec. makers specifications and create an online (the case of CAR) • Make DAD unit a point of entry bug tracking application • Focus on accessible reporting • Reflect pooled fund contributions while avoiding double-counting Go international and learn from standards • Prepare for the future (1st and 2nd • Do not host locally, and build a website to centralize docs and reports level implementers, transaction • Be compliant with DAC reporting directives (definitions, types, markers) details) • Use OECD sector codes but remain compatible with PRSP sectors • Simplify Paris Declaration tracking 3 (work with OECD sector codes) Page 17
  • 17. CENTRAL AFRICAN REPUBLIC Implementing an aid management system Twelve months to design, install, enter data and report on aid for 3 years Contract with Synergy Prelim. data for Prelim. data for 400 signed 2007 published 1st sem. 09 and 2008 final publ.* Prelim. data for 2008 and 2007 300 final published* Core DAD pilot DAD donor profile DAD finals deployed deployed pilot deployed Pub. expen- 200 diture review Projects in DAD Design of contract Data entry and AWP PRSP ‘08 PRSP ‘09 and detailed technical training starts reviews review review specifications Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug * Exceeding OECD DAC coverage Slide 18
  • 18. CENTRAL AFRICAN REPUBLIC | http://dad.minplan-rca.org C. Why fragile can be easy Page 19
  • 19. CENTRAL AFRICAN REPUBLIC The more fragile, the harder Fragile environments do have generic disadvantages 1 Limited skills • Limited pool of potential collaborators (national and international) • High training needs everywhere (starting from zero) 4 Poor connectivity Higher turnover 2 • VSAT connection typically Disadvantages • Organisations arrive and leave 512kbps (shared with 30+ users) more quickly (the case of CAR) • Working online with DAD directly • Humanitarian projects are 12 difficult to 18 months maximum • International staff stay 3 to 12 Higher political risk months • Change of leadership • National staff move frequently • Change of staff / product preferences 3 Page 20
  • 20. CENTRAL AFRICAN REPUBLIC But also: the more fragile, the less complex Fragile environments can offer advantages to aid management 1 Simpler aid modalities • Only grants, no loans • Donors or PIUs implement projects (DEX not NEX) • Aid only through official channels 4 Clean slate Smaller group of actors 2 • Few or no legacy systems Advantages • Fewer (resident) bi- / multilaterals • Chance to build back better (the case of CAR) • Fewer int. and local NGOs • Easier access to decision makers Simpler public financial management (realistic approach) • Internal revenue limited, aid represents very high share of budget • Public investment plan is function of development projects (DAD) • Mid-term expenditure plan is function of aid (DAD) plus int. rev. 3 Page 21
  • 21. CENTRAL AFRICAN REPUBLIC Public financial management shortcut Internal revenue has little relevance for investment and budget planning Foreign aid in 2008 $317m Internal revenue $105m 0 50 150 250 350 Page 22
  • 22. CENTRAL AFRICAN REPUBLIC Public financial management (PFM) shortcut DAD as a tool for PFM Govt. expenditure on int. rev. + bud. support • Only $1.5m in public $81m, Salaries (51%) $45m, Debt (28%) investments financed with internal resources • 99.9% of public investment Budget support is financed through development aid, all of which documented in DAD $1.5m, Investment (1%) • DAD thus simplifies public investment and mid-term $6m, Transfers / subsidies expenditure planning (4%) $17m, Interest (10%) $9m, Current costs (6%) * Intern. resources plus non-specific budget support, but excluding aid financed projects and programmes, Source: Budget execution report 2008 Page 23
  • 23. CENTRAL AFRICAN REPUBLIC | http://dad.minplan-rca.org D. How aid management can drive policy Page 24
  • 24. CENTRAL AFRICAN REPUBLIC Track PRSP financing and alignment Monitor aid alignment to nationals goals and the poverty reduction strategy Humanitarian (1) Peace and Poverty reduction $82m (115%) $71m strategy pillar Needs security Development (2) Governance and $55m (81%) $68m rule of law 3) Econ. recovery $265m (31%) $884m and reconstruction (4) Human capital $206m (79%) $262m Budget supp. / debt $59m without HIPC * Total value of specific projects / agreements signed Oct. 2007, plus commitments made in Mar. and Sep. 2007 for road construction Baoro - Garam Boulaye, including for multi-year projects and activities Page 25
  • 25. CENTRAL AFRICAN REPUBLIC Measure alignment of aid and poverty Combine needs indicators and aid data to shape the policy debate Prefecture Hum Dev Σ Number of poor 1 Bam.-Bangoran 5,6 1,6 7,2 > 20.000 2 Bangui 5,8 53,5 59,2 $7m $10m 16 > 40.000 3 Basse-Kotto 0,0 1,7 1,7 > 80.000 4 Haute-Kotto 5,4 1,0 6,4 5 Haut-Mbomou 0,1 1,0 1,1 $24m > 120.000 4 6 Kémo 0,0 2,5 2,5 $19m > 180.000 $15m 14 7 Lobaye 0,0 3,9 3,9 15 1 $6m > 320.000 8 Mambéré Kadéï 0,0 1,5 1,5 9 Mbomou 0,0 1,1 1,1 10 $8m $6m 6 10 Nana-Gribizi 12,7 2,1 14,8 $3m $2m $1m $1m 11 Nana-Mambéré 3,5 4,8 8,3 5 12 Ombella-M‘Poko 3,1 2,8 5,8 11 $2m 13 3 8 12 $60m $2m 9 13 Ouaka 0,1 1,9 2,0 7 2 14 Ouham 20,6 3,4 24,0 $5m $4m 15 Ouham-Péndé 16,3 2,3 18,6 Expenditure 2008 16 Sangha-Mbaéré 0,0 4,8 4,8 15 Humanitarian 17 Vakaga 8,9 1,0 9,9 Non-specified 7,4 79,7 87,1 Development Bangui Page 26
  • 26. CENTRAL AFRICAN REPUBLIC Identify new challenges to development... Analysis of the impact of the global economic crisis on CAR... Cubic metres Carats 30,000 60,000 Wood (cut) Wood (sawn) Diamonds 25,000 50,000 20,000 40,000 15,000 30,000 10,000 20,000 5,000 10,000 01/07 07/07 01/08 07/08 12/08 Page 27
  • 27. CENTRAL AFRICAN REPUBLIC ... and support development partners’ response ... showed insufficient aid levels in affected diamond/wood prod. regions Commitments* < $5m > $5m > $15m > $30m > $60m > $120m Bangui Diamonds Woods * Projects signed in 2007/08 Page 28
  • 28. CENTRAL AFRICAN REPUBLIC Push for better project management Poor project management quality Budget delivery profiles compared • DAD and simple research allows aid 100% management unit to push Good: at least 50% of budget implementers spent in first 6 months 75% • Weak project management capacity in government and multilateral aid 5 months lost agencies 50% • Often, large parts of the budget are only spent during the 4th quarter 25% Budget spent • Severe deficiencies in procurement, Bad: 50% of budget spent in recruitment and finance lead to last 2 months delayed and sub-standard results 0 3 6 9 12 Month Page 29
  • 29. CENTRAL AFRICAN REPUBLIC Signal danger ahead to decision makers Development aid stabilizes while humanitarian aid is likely to decline Development $317m Humanitarian $251m $242m Clearing of debt arrears $126m $117m $81m $63m 2002 2003 2004 2005 2006 2007 2008 2009* * Based on data available as of July 2009 Page 30
  • 30. CENTRAL AFRICAN REPUBLIC For more information • http://dad.minplan-rca.org • Désiré Yassigao | desire.yassigao@minplan-rca.org Project coordinator | Ministry of Planning • Kersten Jauer | kersten.jauer@undp.org Senior Information Manager | UNDP • Tino Kreutzer | tino.kreutzer@undp.org Information Manager | UNDP Supported by the ARCAD project – Building capacity for the implementation of CAR’s poverty reduction strategy Aid coordination | Public finances | Anti-corruption measures | Administrative reform | Business environment Page 31