Ratification of Collaborative Africa Budget Reform Initiative (CABRI) Presentation to Portfolio Committee on Finance Tuesday 13 November 2007 Lesley Fisher

Content Background and purpose Objectives of legal status & GA recommendation Options Current membership Ratification process South Africa Founding members Hosting agreement Achievements to date

Establishment and objectives Professional network of senior government officials in ministries of finance and planning from across Africa. South African National Treasury played a leading role in establishment together with Mozambique and Uganda in 2004. Key objective of CABRI is the promotion of efficient and effective management of public finances to foster economic growth and enhance service delivery for the improvement of living standards of people living in Africa.

CABRI aims to: support senior budget officials in the management of public finance systems and develop approaches, procedures and practices for improving these; advance the development of Member States by building capacity and promoting training and research in the field of public finance management, in particular from a practitioner’s perspective; and develop and promote common African positions on budgetary issues of interest to Africa.

Objectives of Legal Status Draft memorandum of understanding forms the basis of existing structure of the informal network Enable financial and legal independence from any national government and other regional bodies Support funding arrangements - membership fees, donor funding etc. Enable formal engagement with regional and international bodies MOU is an important part of the preparatory of the legal status of CABRI. Those who participated in its drafting shared the same objectives, agreed to its content and have been mandated to accept it at a properly constituted meeting of national officials. The MoU could be viewed as a factual precursor to the final founding instrument. It can, however, only be finalized through its formal adoption.

Legal Study Considered a number of existing organisations e.g. AU, NEPAD, AFRU Identified two options: By an international legal agreement between member countries By resolution of another established pan- African body

Pros and Cons Option Pros Cons Formed by resolution of the African Union Formalised structure in place and access to all African countries Access to resources Possibly a faster route to legal establishing the network No longer an autonomous body Bureaucratic procedures and complexities of governance Reduced importance and competition of funds with the AU structure Take on a political nature Formed through an international legal agreement Constitution clearly establishes the nature of the network Easier to establish fees and receive funding Takes on a more formal nature in terms of it operations Time-consuming and extensive process of negotiating an agreement between every country and for each country to sign and then seek ratification Work as the equivalent of a technical committee on PFM. Build a relationship with the AU where you are can retain your independence yet still access their networks and resources, by undertaking the role of an otherwise technical committee on PFM

General Assembly Recommendation December 2006 To fast track process, International Agreement can be negotiated by 6 countries Thereafter, new members join through accession process Application for accession is presented at General Assembly meetings Countries have two years in which to present their application for accession

International Agreement Provide a founding instrument for CABRI, which can accommodate the various needs regarding institutions, powers, membership, finances, procedures The final product of negotiations is a signed text but this is not yet a binding treaty June 2007 Secretariat prepared draft agreement based on MoU. Agreement circulated to all countries Once all 6 countries have ratified the agreement, the agreement will come force This agreement is, therefore, also the “constitution” of the organization and will explain, in addition, the rights and obligations of the members. The national procedures for accrediting officials and developing positions may differ. Negotiators will prepare their positions beforehand and will know what they want in the eventual agreement. This will in itself require preparations. The text produced by the negotiations is normally referred back to the relevant national authorities (as a rule the executive branch of government) to finalize. A signature ceremony may also be involved. The date of formal entry into force has to be provided for in the agreement.[1] The relevant provision will usually stipulate that the agreement will enter into force a certain number of days after the final instrument of ratification has been deposited. [1] Only bilateral agreements normally enter into force upon signature. Negotiators mandated to negotiate on behalf of State (May & June) Each country is required to ratify the agreement. This process varies from country to country

Countries participating in CABRI

Legal Status Table 1: Status of the signatory countries of the International Agreement Country Signed Ratification Remark Ghana √ Ratification expected by the end of 2007 Kenya Waiting for instrument of ratification Mali Ratification expected by the end of 2007/early 2008 Senegal South Africa Rwanda

South African process Signed by Minister of Finance 7 August 2007 Cabinet approval 24 October 2007 Dialogue and negotiations Mauritius Training workshop & study tour SANT Financial contribution to be determined at next GAM Between R1m – R1.5m per annum Effective 2009/10 Legal status – April to June 2008 South African government to host CABRI and act as interim secretariat

Hosting agreement South Africa will host CABRI Agreement concluded as soon as reasonable after legally established Standard agreement concluded in consultation with DFA, SARS, DHA Priviledges, immunities, immigration, tax exemptions Disputes, amendments, inviolability of office To be finalised between Secretariat and Government of South Africa

Achievements in 2007 Membership increased from 17 countries to 28 in year and fostered a more committed and active membership base Increased the relevance of activities Dialogue and negotiations – Mauritius Training workshop and study tour SANT Received a positive feedback from members on activities Established an institutional reputation Launched CABRI as a legal entity Received acknowledgment of CABRI’s publications as resources for PFM Strengthened relationship with development partners and partnering institutions.

THANK YOU