CAR: Poverty reduction and aid effectiveness

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CENTRAL AFRICAN REPUBLIC | http://dad.minplan-rca.org

PRSP Steering Committee | 24 August 2009

Poverty reduction and aid effectiveness in

2008 and 2009Ministry of Planning, Economy and

International Cooperation

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CENTRAL AFRICAN REPUBLIC

Contents

A. Poverty reduction strategy (PRSP) financing

B. Aid effectiveness challenges

C. Focus implementation capacity

D. Perspectives for 2009

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A. Poverty reduction strategy (PRSP) financing

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Total commitments at $668m: priority needs of $1286m now 52% covered

Donor support to the PRSP

Needs

Development

Humanitarian

(1) Peace and security

(2) Governance andrule of law

(4) Human capital

3) Econ. recovery and reconstruction

Budget supp. / debtwithout HIPC

$71m

$68m

$884m$265m (31%)

$206m (79%)

$55m (81%)

$262m

$82m (115%)

$59m

* Total value of specific projects / agreements signed Oct. 2007, plus commitments made in Mar. and Sep. 2007 for road construction Baoro - Garam Boulaye,including for multi-year projects and activities

PRSP pillar

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Encouraging numbers

• New commitments of $379m received in 2008*

• $317m disbursed or made available by donors v

• Increase of more than 30% compared to 2007

• $261m spent by implementing agencies (government, UN, NGOs, etc.)

$317m disbursed in 2008 (gross)

Aid in 2008

$155m, Projects(49%)

$50m, Budget support / debt (16%)

$5m, Classic tech. cooperation (2%)

$107m, Humanitarian (34%)

* Including for multi-year projects and activitiesV Including for projects signed before Oct. 2007

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Multilateral support remains vital

• New commitments of $269m received for development projects and activities*

• $210m disbursed or made available by donors v

• Multilaterals account for 87% of disbursements

• $172m spent by implementing agencies (government, UN, NGOs, etc.)

Key donors in 2008 (Top 10)*

Development aid in 2008

EC (EDF, CEC)

World Bank

United Nations+

IMF

Global Fund

France

AfDB

GAVI

China

Germany

$66.0m

$33.5m

$23.8m

$23.2m

$18.9m

$16.2m

$9.6m

$3.5m

$2.3m

$2.2m

* Including for multi-year projects and activitiesV Including for projects signed before Oct. 2007 + Regular / own resources only

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Top 4 PRSP sectors accounted for 70% of expenditure in 2008

Limited visibility of development aid

Budget support / debt related

Health

Security, peace and justice

Transport and infrastructure

Governance

HIV/AIDS

Forest and environment

Education

Water and Sanitation

Business environment

$50m (29%)

$27m (16%)

$21m (12%)

$20m (12%)

$17m (10%)

$12m (7%)

$6m (4%)

$5m (3%)

$5m (3%)

$3m (2%)

Budget support / debt relatedHealth

GovernanceSecurity, peace and justice

Transport and infrastructureHIV/AIDS

Forest and environmentEducation

Non-specificRural development

Top 4 sectors in 2007: 81%

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Very limited field impact

> $1m> $3m> $6m> $9m> $12m> $24m> $48m

Only 23% of expenditure on projects working directly in the field

Outside Bangui 2007: 15%

Bangui

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Benefiting from 2007 advocacy

• $110m committed in 2008*

• $107m made available*

• 4.5 times more than in 2006

• Brings additional resources and new donors to CAR

• $89.5m spent in in 2008 (57% UN, 43% NGOs)

Humanitarian aid in 2008

US

MSF+

UN+

EC (ECHO)

ICRC+

Japan

UK

Sweden

Ireland

France

$23.8m

$12.8m

$12.4m

$8.6m

$8.5m

$5.3m

$4.6m

$4.6m

$3.8m

$3.4m

+ Regular / own resources only

Key donors in 2008 (Top 10)*

* Including for multi-year projects and activities

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Humanitarian expenditure concentrated on food security and health

Live-saving aid

Top 4 sectors in 2007: 75%

Food security and agriculture

Multi-sector aid IDPs / refugees

Health

Coordination / logistical support

Education

Shelter and non-food items

Protection and human rights

Water and sanitation

Safety and security

Food security and agriculture

Health

Protection and human rights

Coordination and logistical support

Water and sanitation

Education

Economic recovery / infrastructure

Shelter and non-food items

Multi-sector aid IDPs / refugees

$34m (38%)

24m (27%)

$7m (8%)

$7m (8%)

$6m (7%)

$5m (6%)

$3m (3%)

$3m (3%)

$2m (2%)

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Strong field impact

> $1m> $3m> $6m> $9m> $12m> $24m> $48m

85% of humanitarian aid spent outside the capital Bangui

Outside Bangui 2007: 80%

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Govt. expenditure around $160m in 2008*

Internal resources extremely limited

$45m, Debt (28%)

$17m, Interest (10%)$9m, Current costs

(6%)

$81m, Salaries (51%)

$6m, Transfers / subsidies(4%)

$1.5m, Investment (1%)

Budget support

Too weak to invest

* Intern. resources plus budget support, but excluding aid financed projects and programmes, Source: Budget execution report 2008

• Only $1.5m in public investments financed with internal resources

• Less then 2% of projection

• 99.9% of public investment has to be financed through development aid

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B. Aid effectiveness challenges

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$261m spent in 2008 cover 68% of PRSP needs - but are largely misaligned

Aligning aid to national priorities

Needs (2008)

Development expenditure

Humanitarian expenditure

$18m

$18m

$221m$86m (39%)

$71m 107%)

$21m (117%)

$66m

$30m (167%)

$50m

* Value of expenditures in 2008, including for multiyear projects signed before Oct. 2007

(1) Peace and security

(2) Governance andrule of law

(4) Human capital

3) Econ. recovery and reconstruction

Budget supp. / debt

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> 20.000> 40.000> 80.000> 120.000> 180.000> 320.000

Bangui

Aligning aid to poverty

Number of people highest in the west and centre

7968

55

41

39

74

59

75

54

67

7369

63

72

45

56 3

Number of poor

Poverty incidence

Prefecture Pop. Poor %

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

Bamingui-Bangoran 48 28 59

Mbomou 180 120 67

Nana-Gribizi 130 96 74

Bangui 705 20 3

Basse-Kotto 274 196 72

Haute-Kotto 99 53 54

Haut-Mbomou 63 46 73

Kémo 130 89 69

Lobaye 271 153 56

Mambéré Kadéï 401 165 41

Nana-Mambéré 257 142 55

Ombella-M‘Poko 392 151 39

Ouaka 304 192 63

Ouham 406 320 79

Ouham-Péndé 473 324 68

Sangha-Mbaéré 111 50 45

Vakaga 57 43 75

1

3

4

56

78 9

10

11

12 13

1415

15

16

67Source: Census (RGPH) 2003, population projection 2008

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> 20.000> 40.000> 80.000> 120.000> 180.000> 320.000

Bangui

Development aid does not reach the poor

Humanitarian aid reaches the poorest and helps to correct misalignment

Number of poor

1

3

4

5

6

78 9

10

11

1213

1415

15

16

Prefecture Hum Dev Σ

1 7,2

59,2

1,7

6,4

1,1

2,5

3,9

1,5

1,1

14,8

8,3

5,8

2,0

24,0

18,6

4,8

9,9

Non-specified 7,4 79,7 87,1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

Bam.-Bangoran 5,6 1,6

Mbomou 0,0 1,1

Nana-Gribizi 12,7 2,1

Bangui 5,8 53,5

Basse-Kotto 0,0 1,7

Haute-Kotto 5,4 1,0

Haut-Mbomou 0,1 1,0

Kémo 0,0 2,5

Lobaye 0,0 3,9

Mambéré Kadéï 0,0 1,5

Nana-Mambéré 3,5 4,8

Ombella-M‘Poko 3,1 2,8

Ouaka 0,1 1,9

Ouham 20,6 3,4

Ouham-Péndé 16,3 2,3

Sangha-Mbaéré 0,0 4,8

Vakaga 8,9 1,0Humanitarian

Development

Expenditure 2008

2

$19m$24m

$15m

$7m $10m

$6m

$1m$1m$2m$3m$6m$8m

$60m$5m $4m

$2m$2m

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Sharp fall in wood in diamond production due to global economic crisis

Aligning aid to new challenges

01/07 01/08 07/08 12/0807/07

60,000

50,000

40,000

30,000

20,000

10,000

30,000

25,000

20,000

15,000

10,000

5,000

CaratsCubic metres

Wood (cut) Wood (sawn) Diamonds

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Bangui

< $5m> $5m> $15m> $30m> $60m> $120m

Diamonds

Woods

Lack of quick response

Limited recent commitments to heavily affected southern regions

* Projects signed in 2007/08

Commitments*

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C. Focus implementation capacity

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Help to facilitate disbursements

Improving capacity to implement

• $1050m committed to all ongoing or new development projects*

• $545m (52%) disbursed until mid-2009

• $410m spent so far, $640m to be spent between 2009 and 2012

• Concerted effort required to facilitate disbursement of committed aid

$640m to be spent until 2012

$1050mcommitted

$545mdisbursed / made available

$410mspent

* Commitments to development projects active in 2008 or 2009, signed before or afterDonor Round Table of Oct. 2007, not taking into account humanitarian aid

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Improving capacity to implement effectively

Managing projects better Budget delivery profiles compared

0 3 6 9 12

100%

75%

50%

25%

Month

Bud

get s

pentBad: 50% of

budget spent in last 2 months

Good: at least 50% of budget spent in first 6 months

5 months lost

• Weak project management capacity in government and multilateral aid agencies

• Frequent delays in delivery of annual budgets

• Often, large parts of the budget are only spent during the 4th quarter

• Severe deficiencies in procurement, recruitment and finance lead to delayed and sub-standard results

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Level of expenditure stays behind target during the first semester 2009

Meeting 2009 targets

Commitments (new) Disbursements Expenditure

1st semester 2nd sem. ‘09

50%

2008: $317m

50%

2008: $261m

50%

Gap 49%

$193m

$133m

$86m

Gap 67%

Gap 58%

2008: $379m = target

1st semester 2nd sem. ‘09 1st semester 2nd sem. ‘09

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D. Perspectives for 2009

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Falling into a recovery gap?

2002 2003 2004 2005 2006 2007 2008 2009*

$63m

$126m

$81m

$251m $242m

$117m

$317m

Development aid stabilizes while humanitarian aid is likely to declineDevelopmentHumanitarian

Clearing of debt arrears

* Based on data available as of July 2009

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Support to PRSP pillars 3 and 4

• $193m in new commitments during the first half of 2009*

• Focus on pillars 4 (education) and pillar 3 (rural development, energy)

• At least $100 to be signed for new development projects during the second half of 2009

Distribution of 2009 commitments

New commitments are better aligned

$14m, Governance Pillar 2 (7%)

$68m, Human capitalPillar 4 (35%)

$25m, Humanitarian (13%)

$43m, Security, peace Pillar 1 (22%)

$36m, Reconstruction Pillar 3 (19%)

* Including for multi-year projects and activities

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Only 30% of development projects are accounted for in national budget

Improving public financial management

500 100 150 200

167 developmentprojects enteredin DAD

48 documented in public expenditure report for 2008

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Catching up on lost time

Mobilizing more resources

• Between 1985 and 2005 aid to Sub-Saharan Africa increased 90%, but fell 50% for CAR

• 7 out of the bottom 10 countries on the Human Development Index (HDI) receive higher per capita aid

• Aid per capita to CAR has been 40% below Sub-Saharan African average

Aid per capita for bottom 10 on HDI*

* Average gross disbursements per capita for period 2005-2007. (OECD, UNDP)

Liberia

Sierra Leone

Mozambique

Burkina Faso

Niger

Guinea-Bi.

Burundi

CAR

Chad

DRC

$136

$112

$110

$91

$77

$72

$55

$42

$39

$28

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DevInfo: tracking needs indicators

• Organizes statistical time series on evolution of needs indicators

• Regular, comprehensive and representative surveys should be priority no 1 for 2009/10

Key tools for PRSP monitoring

DAD: tracking aid disbursements

• Provides financial data on projects implemented as part of the poverty reduction strategy

• Allows for comprehensive M&E in correlation with DevInfo

Primary enrolment (measure of invest. impact)*

1990 2000 2010

Education (average investment by region)*

1990 2000 2010

$9m

$6m

$12m

Situation 2008

$3m

$1m

Situation 2010

* Example, for illustration only

80%

60%

100%

40%

20%

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For more information

• http://dad.minplan-rca.org

Supported by the ARCAD project – Building capacity for the implementation of CAR’s poverty reduction strategyAid coordination | Public finances | Anti-corruption measures | Administrative reform | Business environment

• Désiré Yassigao | [email protected] coordinator | Ministry of Planning

• Kersten Jauer | [email protected] Information Manager | UNDP

• Tino Kreutzer | [email protected] Manager | UNDP

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CAR: Poverty reduction and aid effectiveness