“Mutual Review of Development Effectiveness” in the context of NEPAD

OECD Presentation

Aid flows and quality (chapters 5 and 6)

Policy coherence (chapter 7)

ECA Conference of African Ministers of Finance, Planning and Economic

Development Abuja, Nigeria, 11 – 13 May 2005

Aid flows and aid quality• Scaling up of aid

– Implies changing the aid business model: aid effectiveness agenda

– From “donorship” -- to ownership by African countries

– Generating systemic capacities and accountabilities: no capacity without predictability

– Predictability becomes central – A new African aid architecture needed

Aid flows and aid quality (cont)

• Scaling up of aid: current state of play

• Monterrey/G8 commitments

• Current estimates of aid requirements– UN MDG Report

– Africa Commission

– World Bank Global Monitoring Report

Chart 11. DAC Members’ ODA: 1990-2003 and simulations to 2006 and 2010,

based on commitments at Monterrey and since

0.33 0.32

0.30

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ODA as a % of GNI (left scale)

Total ODA(right scale)

Total ODA to Africa(right scale)

ODA to Africa as a % of GNI (left scale)

Aid flows and aid quality (cont)

• Scaling up of aid: comparing current commitments with new aid scenarios– Monterrey/G8 commitments imply $15 billion increase

for Africa by 2010 over 2003 (latest announcements will increase this estimate)

– MDG Project envisages ODA/GNI ratio of 0.46% in 2010 as compared with DAC simulation of 0.32%

– Commission for Africa and World Bank propose $25 billion increase for 2010 over 2003 level of around $23 billion

Current evolution of aid to Africa: ODA back to early 1990s levels

(See Annex I for additional charts)

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1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

US$ billion

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Bilateraldebtforgiveness

other ODA

Privateflows

Non-aidofficial flows

Note: Data on emergency aid are available only as from 1995.

Chart 1. Total net official development assistance (ODA), non-aid official flows and private flows in Africa, 1993-2003

Aid flows “Action Frontiers” and 2007 “Performance Benchmarks”

• Managing the scaling up of aid – for Africa– Construct overall development finance scenarios with

post-aid dependence vision– Policies for domestic resource mobilisation, including

financial sector development and tax systems – Proactive approach to aid composition and leadership

of aid management processes– MTEF frameworks operative and

effective/accountable public expenditure management

Aid flows: “Action Frontiers” and 2007 “Performance Benchmarks” • Managing the scaling up of aid: for OECD

– Commit to new ODA scenarios for Africa (Gleneagles G8 summit, UN Millennium +5 summit)

– Provide for high degree of predictability and active forward planning (forward tracking, multi-year discussions with partners, aid flows reported on national budgets)

– Strengthen aid modalities for fragile states, regional integration and infrastructure

– Definitive resolution of multilateral debt issue and associated new loans/grant policies

Aid quality: “Action Frontiers” and 2007 “Performance Benchmarks” • Remarkable progress in countries where

strong African ownership/leadership (Mozambique, Tanzania, Uganda, Ghana, Ethiopia, Burkina Faso)

• Paris Declaration: joint commitments and measurable targets for ownership, alignment, harmonisation and results-based management (Annex II of Mutual Review Report)

Coherence across the range of OECD and African public policies

• Requires government-wide approaches to policy formulation, underpinned by integrative institutional structures/processes

• Systematic promotion of mutually reinforcing policy actions across government departments and agencies, regional groupings and international institutions

Policy coherence: “Action Frontiers” and

2007 “Performance Benchmarks” For Africa• Build capacities to

– Participate effectively in international debates (African voice)

– Generate initiatives across sectors, disciplines, regions, countries c.f. NEPAD’s agriculture strategy

• Streamline and rationalise regional institutions and mandates into a coherent, strategic and interactive system.

• Concerted effort to reduce corruption

Policy coherence: “Action Frontiers” and

2007 “Performance Benchmarks” For OECD• Aid, trade and debt policies consistent with

growth/MDG attainment and viable longer-term financial development scenarios

• Improve OECD institutional mechanisms for policy coherence

• Facilitate “African voice” • Coherent government-wide support for

African conflict resolution and peace-building capacities

Policy coherence: “Action Frontiers” and

2007 “Performance Benchmarks” For OECD• Strong Doha Round outcome facilitating the

“Three Pillars”: improved market access, elimination of export subsidies and reduction of domestic support

• Trade capacity building, including for trade facilitation and standards

• Research, human and financial resources to address African health challenges

• Enforcing anti-corruption instruments and facilitating recovery of stolen assets