Designing a Policy Matrix for Development Policy Lending
Jan 13, 2016
Designing a Policy Matrix for Development Policy Lending
Rwanda’s Poverty Reduction Strategy Paper
Budget Support to Rwanda’s Poverty Reduction Strategy
Joint PRSP matrix as a tool for the development of sectoral strategies &
basis of government led harmonization
From Conditionality to Ownership:
the experience w. integrating matrices under government
leadership
Budget Support to Rwanda’s Poverty Reduction Strategy
Joint PRSP matrix as a tool for the development of sectoral strategies &
basis of government led harmonization
From Conditionality to Ownership:
the experience w. integrating matrices under government
leadershipMohamed Toure, Agnes Soucat, Kene Ezemenari, Negda Jahanshahi,
OUTLINEOUTLINE
Background
Process
Integrating Limelette I principles
Results
Next Steps
Some remaining Issues
Background Background Genocide in 1994; 1 million deaths
Post conflict recovery; average growth rate of 7 %
Vision 2020: GoR’s long term vision
PRSP July 2002– Comprehensive, ambitious government program, including
six priority areas– Well articulated sectoral vision in education, health, water– In line with MDGs objectives
PRSP monitoring report , July 2003– Good progress on social sectors outcomes– Progress in poverty reduction– Progress on reform
Structural Reforms 1995-2003: selected examplesStructural Reforms 1995-2003: selected examples
Public enterprise reform: By 2003, 50 out of 70 public enterprises had been sold.
Trade liberalization: The trade restrictiveness index fell from 8 in 1995–97 to 2 by mid-2000.
Exchange regime: A fully liberalized and market-determined exchange rate system has been adopted, foreign exchange bureaux licensed, and current account restrictions abolished.
Domestic prices and marketing: Price controls have been eliminated for all but a handful of commodities
Significant achievements in the social sectorsSignificant achievements in the social sectors
Outcomes:– 67% primary school completion– 75% immunization coverage– 90% utilization of antenatal care
System building/reforms Strong HIV/AIDS program, good availability of essential drugs Most successful micro-insurance schemes in SSA Half of health providers are private, receiving subsidies from
government Successful experiences with contracting/performance based
payments Successful experiences with grants for demand side subsidies for
education at district level
Social sector budget allocations: Budget allocations to social sectors have increased significantly in real terms since 1998. These allocations are now protected from budget cuts.
GovernanceGovernance
Economic governance: A National Tender Board was created to oversee procurement. An independent Office of the Auditor General was established. FARAP Action Plan adopted in 2003.
Expenditure management: Expenditure monitoring system,CEPEX, MTEF process established. Pilot Joint Monitoring system implemented in 2003 ;
Relatively transparent financial management and procurement, low levels of corruption
Situation in 2003 Situation in 2003
Good understanding of sectoral issues due to very strong analytical underpinnings: PER/PEMR, PETS, FARAP, Poverty Assessment, DHS, Country Status Report on Education and Health etc…
Requests from government: focus on education, health, water, energy and agriculture (export promotion), as well as public sector reform
However: no fully developed sector strategy papers, unclear articulation of Mid Term programs
Challenges facing PRSC Challenges facing PRSC
Limited capacity at country level: PSCBP as a companion to the PRSC
Large coverage of PRSP: focus on policy dialogue in services, fiduciary/accountability; complementarity with investment projects
Preparation timing (9 months): preparation resources made available to government (Trust Funds, consultants, government workshops); emphasis on coordination (PAF); strong involvement of non Budget Supporters
ProcessProcess
November 2003, MOU on harmonization and alignment of budget support
Use of PRSMR matrix as base document Expansion and further development of sectoral sections
of PRSP matrix Government taking lead role– donors engaged behind
the government in development of sector policy matrixes as part of the sector strategy development process (“2nd generation SWAPs”)
Process (cont.)Process (cont.)
The government's plans of action for various programs/sectors (--i.e. FARAP, Education SWAP, and sector strategies) have been developed in consultation with donors (versus conditionality without adequate consultation or prior analytical basis)
Both budget support and non-budget support donors invited by the government to assist in developing the matrix; non budget support donors full participants in pre-appraisal and appraisal missions of PRSC. Matrix became a basis for promoting/facilitating harmonization
Identification of triggers and conditionality is taken directly from the PRSP matrix
Process (.cont)Process (.cont)
Identification of conditionality cleared with the government so they have buy in
Review cycle for PRSC and disbursement aligned with the PRSP review process and government budget cycle in line with the Partnership Framework—
In this context, having the MoU to begin with provided framework for the PRSC and harmonization
Integrating Limelette I PrinciplesIntegrating Limelette I Principles
Focus on 6 priority areas of PRSP
Led by GoR / Head of State Focus on MDGs through
growth+services+accountability “2nd generation SWAP” (health) Missions synchronized with
Fund and PRS, timeline developed
Sector groups led by government
7 field based staff, 6 staff working on WB Projects in Rwanda, 2 PRSC staff
PRSC relies on EU led FARAP
Based on PRSP
National ownership
Result Orientation
Link priority sectors with budget
Increased Use of Programmatic Support
Government lead in sector and budget support groups
Mission timing synchronized with country process
More delegation to the field
Rely on each others’ document
Results – Our assessmentResults – Our assessment
Strongly government owned policy matrix aligned with sectoral strategies- with process led by Head of State
PRSP matrix presented to Cabinet for discussion/ approval
PRSP matrix including health, education, water, energy, public sector reform, agriculture, macro-management, investment climate
PRSP matrix included in APR
PRSC focus as part of government’s programPRSC focus as part of government’s program
Focus on MDGS achievements through i) private led growth ii) services iii) strengthening of public sector underpinnings
Strong focus on outcomes:
– macro-economic stability, – time-lag to open a private business– primary school completion rates, – immunization coverage, use of bed nets, number and
rates of assisted deliveries, – access to clean water, frequency of hand-washing,– reduction in electricity shortages,
Focus on accountability: results, contracts, transparency, Voice
Next Steps (appraisal in July 2004)Next Steps (appraisal in July 2004)
Focus of PRSC on five sectors in the three years cycle, PRSC1 focuses on 2 sectors with preliminary measures for other three
Development of budget support matrix including PRSC matrix
Agreement on prior actions and triggers
Monitoring of the PRSP/PRSC: Monitoring of the PRSP/PRSC:
Rwanda approach is to monitor outcomes as part of overall assessment of program
Monitoring of Outcomes is essential
However, exogenous factors outside of government control influence outcomes; and there are key actions or intermediate outputs required in order to move toward final outcomes,
Monitoring (cont.)Monitoring (cont.)
Monitoring of intermediate process/actions plays following role:
– help identify areas where additional assistance to government is warranted (particularly in context of limited capacity)
– help to quickly identify potential problems/risks and signal need for corrective action, etc. to ensure movement toward final outcome
– helps in context of PRSC, in assessing the country's efforts towards achieving agreed triggers/targets, particularly in case where there are extenuating circumstances/exogenous shocks that have compromised achievement.
IssuesIssues
Highly committed government and ambitious program of reform; vs strong dependence on budget support (50 %) => tensions on who runs the show
Rwanda’s program development more government driven than donor driven (“2nd generation SWAP”); difficulties of donors to follow government speed => rationale for slowing down linked to government or donors’ capacity ?
Normative process versus country tailored/flexibility=> applicability of other countries’ models to special case of Rwanda
Communication: local dialogue versus HQ loop
THE END
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THANK YOU
PRSP CoveragePRSP Coverage
1. Agriculture transformation and rural development, 2. Human resources development and improving the
quality of life: including health, education and training, water and sanitation , control and prevention of HIV/AIDS.
3. Economic infrastructure: including energy for poor households and rural enterprises,
4. Good governance: including civil service reform, accountability and transparency.
5 Building an enabling environment for private sector development: including private sector investment promotion, financial sector reform, privatization of state enterprises,
6. Social capital to support vulnerable groups