Debate about effective aid practice has focused on monitoring the performance of recipient governments while overlooking the need to check donor performance. Mozambique, one of Africa’s most aid-dependent states, is working with the G-15 (a grouping of bilateral donors, the European Commission and the World Bank) to ensure transparent and coordinated donor support.

The 2003 Rome Declaration on Harmonisation is an attempt to reduce unpredictability of aid flows, increase donor transparency, lower transaction costs and build up skills and resources in aid recipients. A report from Gerster Consulting in Switzerland assesses the process of coordinating G-15 support to implement Mozambique’s poverty reduction strategy. While the authors commend progress, they show that even in the progressive environment for international cooperation in Mozambique much can be done to improve management and inter-agency cooperation.

An agreement signed in 2004 clarifies the performance and reporting commitments of the Government of Mozambique (GoM) as well as the Programme Aid Partners (PAPs). Of an annual total of Official Development Assistance of about US$ 700 million, the programme aid share – that dedicated to budget support, balance of payment (BoP) support and funding of sector wide approaches (SWAPs) – is estimated at 35-40 percent.

In 2003, four PAPs (Netherlands, Ireland, the UK and the European Union) had a programme aid share of 60-75 percent of total assistance, close to or beyond the GoM target figure of two thirds. Five PAPs (Finland, Norway, Sweden, Germany and the World Bank) had a share of between a third and half of all aid and France and Switzerland had a share of around 30 percent. Eight PAPs have agreed to increase support until 2007, the end of the planning period.

The primary responsibility of the GoM to prioritise and monitor public resource use by sectors, areas and tasks is difficult to fulfil because:

• There are neither agreed definitions nor a standardised reporting format in place.
• Reporting on aid programmes is not comprehensive and budget and non-budget support is not always specified.
• Some donor reporting is difficult to break down by GoM budget categories.

As almost all donors are active in a large number of sectors aid effectiveness could be improved considerably. The authors urge G-15 members and the GoM to work together to develop a common standard reporting format and to:

• establish a PAP’s Performance Assessment Framework, with sub-national levels, and evaluate and update it annually
• explicitly report budget and non-budget flows in their own financial management systems
• address the causes of delays in aid disbursement: the GoM would like greater certainty that once funds are committed they will actually be disbursed, but will also have to improve its management of funds
• develop clear links between the annual planning and review cycles for different sectors, and the general budgetary planning and review cycle
• coordinate efforts to build skills and resources and ensure that GoM needs are paid out of budget rather than non-budget sources
• strengthen domestic accountability by hosting a workshop to discuss assessment findings in dialogue with Mozambican stakeholders (GoM, parliament and civil society).

Several PAPs seem to consider membership of the G-15 donor group a sufficient step in demonstrating their commitment to coordinating activities. However, this should be seen as a forum in which further coordination needs to be discussed and then implemented.

Source(s):
‘Programme Aid Partners Performance Assessment (PAPPA) in Mozambique: Baseline Survey on PAP Performance in 2003. Report to the G-15 Programme Aid Partners and Government of Mozambique’ by Richard Gerster and Alan Harding, Gerster Consulting September 2004 Full document.

Funded by: Swiss State Secretariat for Economic Affairs

id21 Research Highlight: 26 July 2005

Further Information:
Richard Gerster
Gerster Consulting
Göldistrasse 1
CH-8805 Richterswil
Switzerland

Tel: +41 (0)1 784 83 08
Fax: +41 (0)1 784 83 17
Contact the contributor: richard.gerster@gersterconsulting.ch

Contact the contributor: info@gersterconsulting.ch

Gerster Consulting, Switzerland

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