National Program of Action: Costing and Funding UGANDA APRM PROCESS National Program of Action: Costing and Funding Harmonizing the United Republic of Tanzanian APRM - NPoA with the existing Development Strategies and MTEF Max Ochai September 26, 2012 Dar es Salaam

Presentation Purpose: To share Ugandan experience in costing and funding the APRM-NPoA. To inform recommendations, measures, challenges and strategies for the Tanzanian case.

The Story Critical path defined. Required inputs determined. Costs estimated and aggregated. Costs integrated into MTEF ceilings. Single budget executed. Challenge: resource constraints. Recommendations: get priorities right!

Outline Introduction Practical Experience Key Challenges and Lessons Concepts Practical Experience Costing, Funding and Implementation Key Challenges and Lessons Effort Some Recommendations Conclusion

1. Introduction APRM-NPoA: A comprehensive program that guides and mobilizes a country’s efforts in implementing necessary changes to improve its state of governance and socio-economic development (vide APRM Base Document). Integral part of CRR: Key input into peer review process

1. Introduction Cont’d Serves to present and clarify a country’s: Priorities identified Activities undertaken Responsibility of stakeholders Derived from APRM-CSAR Prepared in a participatory manner Financed largely thru’ National Budget

1. Introduction Cont’d MTEF: a whole of government framework for supporting a strategic and policy-based approach to budget preparation: a medium-term fiscal framework; future costs of existing policy; and sector strategies. an integral part of the Budget Cycle

1. Introduction Cont’d Consists of: a top-down resource envelope; a bottom-up estimation of current and medium-term costs of existing policies; and, ultimately, matching of these costs with available resources – budgeting!

1. Introduction Cont’d Development Strategies (DS): Inclusive of NPoA, provides the roadmap for policy priorities MTEF is where DS confronts budget realities MTEF is, therefore, critical to effective implementation of DS

2. Uganda: Practical Experience NPoA: Methodology Desk research Expert panel interviews – 200 units Focus group discussions – 96 units National sample survey – 1,588 HHs Country-wide consultations Public hearings Submission of memoranda by interest groups

2. …Experience Cont’d NPoA: Results 463 recommendations were made o/w 307 recommendations in CRR o/w 156 recommendations added by APR Panel of Eminent Persons 200 recommendations prioritized And, costed in NPoA over three years

2. …Experience Cont’d Costing: Institutional Arrangement APRM-NC Costing Team: Professional Cost Accountants Technical Experts from: Central Government MDAs Bank of Uganda Costing Team mandated to cost NPoA

2. Cost of... Cont’d Costing: Methodology Participatory approach Stakeholders Head of Public Service MDAs LGs NDP Preparation Core Technical Team APRM-NC

2. Cost of... Cont’d Costing: Mechanics Step 1: Selected a specific objective Step 2: Selected a required action Step 3: Determined critical tasks Step 4: Ascertained required inputs Step 5: Determined associated costs Step 6: Adjusted costs upwards, for: Inflation, by 10% p.a. Contingency, by 10% p.a. Step 6: Validated costs

2. …Experience Cont’d Total cost estimated at US$ 4.9 billion, 2008/09 to 2010/11 FYs NPoA was NOT resource-constrained

2. Cost of... Cont’d Costing: Basic References BFP, 2008/09 – 2010/11 FYs Inputs PPDA Budget Guidelines, 2008/09 FY Unit costs www.michaelpageinternational.com Consultancy rates

2. …Experience Cont’d NPoA NDP NDP MTEF MTEF Budget Thematic Paper on Governance NDP MTEF Sector Budget Framework Papers MTEF Budget Annual Budget Call Circulars

2. …Experience Cont’d Sources of Funds Domestic: External: National Treasury – tax and non-tax MDAs - own receipts LGs - own collections External: Development Partners Multi-lateral Bilateral

2. …Experience Cont’d Uses of Funds Budgetary: Extra-budgetary: Subjected NPoA to national, sectoral and sub-national prioritization Provided for implementation of NPoA in National Budget, within MTEF Extra-budgetary: Discretionary

2. …Experience Cont’d

2. …Experience Cont’d

2. …Experience Cont’d Disbursements National Budget: Extra-budget: Annual and Quarterly Workplans Annual and Quarterly Releases Annual and Quarterly Progress Reports Extra-budget: Annual and Quarterly Requisitions

2. …Experience Cont’d Institutional Mechanism MFPED APRM National Focal Point: Political oversight Funding MDAs, LGs and Private Sector Implementation Monitoring implementation Reporting progress

2. …Experience Cont’d APRM-NGC: NPA, as APRM National Secretariat: Monitoring, at national level Reporting, at national level NPA, as APRM National Secretariat: Support services

2. …Experience Cont’d Capacity Institutional: Human: Financial: Equipment, systems and networks Human: Technical officers and experts Financial: Own and other funds

2. …Experience Cont’d Risks and Mitigation Perceived Risks Failure to mobilize adequate funds Inability to build requisite capacity Mitigation Measures Prioritization of critical tasks Performance Contracting

3. Challenges and Lessons Key Challenges Constrained resource envelope assumed full support of Development Partners; and Limited monitoring capacity limited influence over resource allocation

3. … Lessons Cont’d Effort Single account system MTEF Bank of Uganda MTEF Multi-sectoral Institution-based Capacity-building and -development

3. … Lessons Cont’d Lessons Initial conditions matter budget basics enhance implementation of MTEF Strong case for a single budget agency and for NDP to be co-ordinated there; Alternatively, clear institutional arrangements for managing integration

3. … Lessons Cont’d Giving priority to strategic phase of budget preparation enhances stakeholder engagement Strategic management of policy and planning process at sector level is key SWGs have proven effective, facilitated by PEAP and NDP

4. Some Recommendations Same macro-framework for MTEF and Plan MTEF process should cover all sectors Budget comprehensiveness is key Opening up the budget-making process to stakeholders as part of the development of the MTEF Improved costing and target-setting to facilitate Parliamentary engagement in debate about the budget and the Plan

5. Conclusion MTEF process is key to effective implementation of NPoA MTEF must cover whole Government Apply same macro-fiscal framework for MTEF and Plan Cost required inputs, for critical activities. Execute a comprehensive budget

END THANK YOU