1 PEFA Performance Measurement Framework Case Study - Ghana Presentation by Marcelo Andrade The World Bank November 16, 2006

2 Outline Ghana - Performer with potential PEFA Assessment - Ghana Context Do’s and Don’ts  Working with Government  Working with Donors  Working across Networks

3 Ghana: Performer with Potential Open society, political transition in 2000, first in AU to complete Africa Peer Review Mechanism Social capital, will achieve poverty MDG Top among peers, but not at its potential

4  Structural adjustment since mid-80s. Poverty down, growth sustained, economy same GPRS1 (2003 – 05) – Growth accelerated, macro stabilization, enrolment up, debt relief GPRS2 ( ) – Stronger focus on growth and structural transformation. Three key pillars: Private-sector driven growth, Human development, Governance and Civic responsibility Country’s goal - Middle-Income status by 2015 Challenges - strategic depth, results-focus, resourcing

5 PEFA Assessment: Ghana Context MDBS Partnership since Focus on key GPRS actions and outcomes  Many GPRS1 goals achieved. GBS predictability improved (~$300/year from ten MDBS partners, close to a third of resource flows representing about 10% of GDP), plus debt relief. Policy Dialogue - Budget centrality, strengthen PFM  HIPC AAP (2001 – 1 out of 15 benchmarks met; 2005 – 8 out of 16 met).  First time Budget approved before beginning of FY. Audited 2005 Consolidated Fund accounts submitted to Parliament in June External Review of PFM (ERPFM) – annual assessment within MDBS framework. Objectives:  developmental - assist Government monitor its PFM reforms. If need be, suggest options/actions to address challenges. Align with budget process.  fiduciary - inform donors providing budget support about country’s progress in strengthening its PFM systems

6 GoG PFM Action Plan adopted in January 2006 PEFA assessment part of 2006 ERPFM Link to Monitoring of OECD/DAC Paris Declaration on Aid Effectiveness (2005)

7 PEFA PMF - Do’s and Don’ts Working with Government  PMF - not only about rating countries. Measurement leg of Strengthened Approach to PFM reforms. Country-led reform agenda and coordinated donor support program also matter  How to conduct assessment? (i) external assessment without Govt. involvement - likely to generate antibodies, particularly if assessment is perceived to be linked to continuation of budget support (ii) self assessment – if insufficiently guided, might lead to unduly rosy ratings

8 (iii) Trick in Ghana – middle course. ERPFM team facilitated discussion on the standards underpinning each indicator. Joint assessment on the level of existing performance. Areas in which opinions diverted recorded in the PFM – PR  Focus on PFM systems, not budget policy  PEFA valuable to help prioritise, sequence reform measures. Helped to identify “quick wins”  Score in line with PEFA guidelines and information and documentary evidence

9  Triangulation of information, where necessary  Govt. ownership is key. Stick to principle that assessment is value neutral  Plan carefully the exercise and field work

10  Working with Donors  PEFA high level indicators - international standards, more demanding than the HIPC- AAP. Need to be understood in the proper context  PEFA assessment – not intended to be used as a scorecard for conditionalities

11  Key to quality of PFM PR is team capabilities and how assessment is conducted. Not whether is stand alone or integrated in a broader analytical product  PFM PR - if part of broader analytical product, presentation as a free standing report facilitates use as common information pool

12  Working across Networks  Working as a team, key to success  Be responsive to PEFA Secretariat’s quality reviews  PEFA PMF learning curve – key to quality