CABRI response to Accra Action Agenda 5th Annual Seminar Dakar, Senegal 7-8 April 2009

A reminder of AAA adopted at the High Level Forum Context A reminder of AAA adopted at the High Level Forum An overview of the work CABRI undertook that relates to ‘use of country systems’ Developing a response to the AAA Discussion

Accra Action Agenda Purpose: acceleration of actions towards achievement of aid effectiveness targets as set out in Paris Declaration Three main focus strategies Increasing country ownership Build more effective and inclusive partnerships Achieving development results Important implications for bringing aid on budget Points under: Acceleration of actions towards achievements of aid effectiveness targets as set out in Paris Declaration Remind key strategies to achieve greater aid effectiveness are ownership, alignment, harmonisation and mutual accountability Alignment and use of country systems important towards ownership and building effective states Sub-strategies discussion Increasing country ownership and particularly use of country systems main focus of CABRI response. Improving quantity and quality of aid on budget will help broaden dialogue by making aid more transparent at country level. On other hand, some actions set out in the AAA under making aid more transparent and increasing medium term predictability of aid crucial or a first condition for bringing aid on budget successfully, for example Donors will publicly declare regular, detailed and timely info on the volume, allocation and if possible results of development expenditure to enable more accurate budgeting, accounting and reporting by developing countries Developing countries will strengthen their budget planning for managing external and domestic resources Donors will provide full information on annual commitments and actual disbursements Donors will provide information on their three to five year forward expenditure and implementation pans and indicative disbursements. Mention that there are many other important items in the AAA eg with regard to donor harmonisation, but less important to bringing aid on budget

…what AAA said on Use of Country Systems Accelerate the strengthening and use of country systems to the maximum extent possible Provisions Use country systems as a first option Donors must provide reasons for, safeguards and measures when not using country systems Mutual assessments of country systems Donor plans to implement, incentivise staff, etc. 65% of aid as programme-based aid 50% of aid use country fiduciary systems Important to remember purpose of PD and AAA Increase effectiveness of aid Paris Declaration and AAA commitments are the means towards this end With last set of bullets can expand a bit that Paris Declaration learnt from decades of ineffective aid practice and is a new way of delivering aid, based on the understanding now of the relationship between alignment, country ownership and use of country systems and (i) sustainability of aid, (ii) the contribution or damage aid delivery can cause to states building long-term capacity to manage themselves. It is not only WHAT aid is delivered, but HOW that counts. However, ultimately it is about whether aid leads to development. The declaration commitments and indicators are the means to this end

CABRI work on Aid on Budget CABRI’s response aimed at ensuring that use of country systems result in improved aid effectiveness Draws on CABRI’s work and SBOs experience Aid on Budget Study Discussions of SBOs Aid on Budget Working Session in Rwanda

Lessons from Aid on Budget work Use of country systems can contribute to improved aid effectiveness Not all systems used at once; countries should make measured progress weighing up risks Bringing Aid on Budget does not equal budget support: progress should be made in all modalities Putting effort into clear, useful, commonly understood definitions of aid categories helpful Countries should define criteria for use of country systems Streamlined country systems The Brief has examples for each of these points which can be drawn on to fill presentation out.

… allows for development of a response CABRI recognises role of aid and international recognition of developing country ownership and leadership. But Use of country systems should not be applied as a blanket approach A developing country also faces risks when integrating aid into country systems Development, fiduciary and reputational risks Unreliable and unpredictable aid flows Unreliable and unpredictable flow of aid information Cost of putting aid through fiduciary systems can outweigh its benefits

Greater emphasis on upstream budget cycle – planning and budget …but Greater emphasis on upstream budget cycle – planning and budget Stronger role for developing countries in determining whether and where aid should be integrated into budget cycle Putting forward targets and use of fiduciary systems as a first choice for donors, can undermine developing country choice and increase developing country risk Upstream budget cycle: Putting aid on plan, budget and report essential for effective domestic resource use, transparency and accountability and carries no risk for donors But not putting aid on plan etc carries high risk for recipient countries Emphasis on fiduciary systems encourages use of these systems above priority use of planning, budgeting and reporting systems

questions to guide discussion Are the five points appropriate given country experiences Use of country systems not used as blanket approach Acknowledge risks for developing countries Aid on plan and on budget as default? Stronger role for developing countries Default use of fiduciary systems undermine developing country choice, ignore developing country risks Other points? What are appropriate forums for presenting CABRI position?

thank you!