Presentation on International Aid and Transparency

Initiative (IATI)Paris, October 4, 2011

Outline

1. Forward2. Liberia (AMU)’s experience with receiving information from

South-South (SSC) providers, i.e. China, India and others3. Government of Liberia existing practices for reporting aid4. Challenges5. South-south flows6. Government of Liberia Preferred Aid Modality7. Concluding notes; how does it all affect GoL planning,

coordination and budgeting

Forward

• The International Aid and Transparency Initiative (IATI) launched the Accra High Level Forum on Aid Effectiveness in September 2008 in Accra, Ghana. The forum was a multi-stakeholder initiative that seeks to increase transparency in order to improve the effectiveness of aid in reducing poverty. The Government of Liberia endorsed IATI principles on January 11, 2011, and began to take bold steps to ensure aid is placed on budget to align with GoL development goals.

• Notwithstanding, there are challenges, especially in receiving aid information with the South-south cooperation.

Liberia (AMU)’s experience with receiving information from South-South (SSC) providers, i.e. China, India and others

• Donor failure to report aid information timely and regularly (China, India and other countries).

• Increase presence of donor aids from china but reporting on aid to the Government of Liberia is lacking or does not confirm to reporting standard of the Ministry (China will report aid information outside of data collection template design by MoF. Or aid information from the Chinese is reported by MoF on the basis of project listing and not on the value of the projects).

Liberia (AMU)’s experience with receiving information from South-South (SSC) providers, i.e. China, India and others

• Unpredictability of aid ( the results of lacking aid information, proper reporting and coordination framework makes GoL planning and decision-making process difficult; further, its makes GoL looses that sense of ownership)

• No records on India• Widen and deepen inclusive development partnerships: South-

south cooperation • Limited human capacity• Lack of logistics

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Liberia (AMU)’s experience with receiving information from South-South (SSC) providers, i.e. China, India and others (Cont’d)

• Liberia is not a member of the OECD DAC (this makes it difficult to hold China and India accountable to the principles of the PD, AAA and IATI).

Government of Liberia existing practices for reporting aid.

Aid data collection is twofold; In January of each year, Development Partners (DPs) are requested to submit projections for the purpose of annexing aid flows to the National Budget. Secondly, upon the package of the Fiscal Budget in July, data collection template is sent to DPs for

actual aid disbursements by quarter. DPs quarterly reports are published in the Donor Fiscal Outturn Report. The following depicts GoL best practices (though improvement continues)

• Aid projection for new Fiscal year (July-June; information on aid is collected from donors, collated, analyzed, and annexed to the national budget)

• Quarterly reports are generated, shared with the donors and other stakeholders for verification (corrections are incorporated and final reports published on MoF web site for partners and other stakeholders consumptions)

• The Medium Term expenditure Framework (MTEF), (developed to achieve multiple deliverable objectives: improvement in the macroeconomic balances, restructuring and rationalizing resource allocation, improve budget performance, and introduce the medium term perspective in the planning process).

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Government of Liberia existing practices for reporting aid (Cont’d

ChallengesThe purpose of reporting aid information is to support sound financial management practices, promote allocation efficiency, and to enable decision-makers understand recurrent cost implications of investment project from a good macroeconomic management perspective. Unfortunately, GoL is faced with some constraints: • Collecting timely and comprehensive information from the

DPs • Capacity constraints• Donors lack provisions of predictability (there is no

comprehensive and timely medium term information on aid flows to government; direct or outside of government for planning and budgeting purposes)

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• Providing aid outside of country system (most donors do not channel aid through government),

• Clarity on aid type, modality, or disbursement channel (no information on intended objectives, expected and actual results or any condition attached to each aid flow, making it difficult to align aid with the country system to properly suit government development goals and to ensure aid meets its underlining objective)

• Donors-focused accounting and reporting systems ()• Inadequate ownership of development strategies and policies

(executing aid outside of budget undermines GoL’s ownership of development strategies and policies; to support strategic planning of full resource envelop)

Challenges (Cont’d)

South-south flows

Frantic efforts have been made since the establishment of the Aid Management Unit to get China report on the numerous development projects since 2006. The Government of the People’s Republic of China provided the following support:• 2006/2007, US$1,500,000 in budget support • 2011/2012US$6,900,000 in project support.

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Below is a list of projects of the Chinese Government:

1. John F. Kennedy Memorial Hospital in Nimba;2. University of Liberia Fendell Campus;3. Central Agricultural Research Institute in Bong County;4. Renovation of the SKD Sport Stadium and Ministry of

Foreign Affairs;5. The upcoming expansion of the Monrovia Vocational

Training Center; and 6. The upcoming construction of a ministerial complex

South-south flows (Cont’d)

Government of Liberia Preferred Aid Modality

The Government of Liberia has a strong preference for direct budget support in order to increase government ownership and promote alignment to national priorities. Within four years (2007-2011), direct budget support to Government has increased from 1% to 12 %. Below is a table depicting the trench in budget support disbursements:

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Government of Liberia Preferred Aid Modality (Cont’d)

Summary Analysis of Budget Support by Partner FY2006/2007 - FY2011/2012

  FY2006/2007 FY2007/2008 FY2008/2009 FY2009/2010 FY2010/2011FY2011/2012

Projection TotalTotal by %

ADB     23,004,590     22,680,000 45,684,590 37.2%

China 1,500,000         6,900,000 8,400,000 6.8%

European Union       8,500,000 27,495,000 7,050,000 43,045,000 35.0%

France 1,200,000           1,200,000 1.0%

World Bank   4,000,000   4,000,000 11,485,200 5,000,000 24,485,200 19.9%

Total 2,700,000

4,000,000

23,004,590

12,500,000

38,980,200

41,630,000

122,814,790 100.0%

2.2% 3.3% 18.7% 10.2% 31.7% 33.9% 100.0%

Table 1: Actual Aid Disbursement by Partner and Aid Modality, FY2009/2010

Disbursements By Partner and Modality: FY2009/10

Partner Budget SupportTrust Fund Contributions

(LRTF)Pooled Fund Contributions GoL-Executed Projects Non-GoL Executed Projects Total by Partner % of total Aid

AfDB       13,807,674 16,350,600 30,158,274 8.5%

Denmark         5,848,068 5,848,068 1.6%

DFID/UK   4,025,000     13,693,050 17,718,050 5.0%

EC 8,590,394       32,356,859 40,947,253 11.5%

Foundations         3,506,432 3,506,432 1.0%

Germany   14,100,000     3,877,500 17,977,500 5.1%

Ireland     2,000,000   4,704,892 6,704,892 1.9%

Norway   2,512,563   11,072,027 12,442,210 26,026,800 7.3%

United States         59,250,000 59,250,000 16.7%

Sweden   5,600,000   210,000 19,406,000 25,216,000 7.1%

World Bank 4,000,000 7,964,000   59,232,175 6,530,000 77,726,175 21.9%

UN System     2,976,000   41,664,867 44,640,867 12.5%

-UNICEF     2,976,000   14,386,203 17,362,203  

-WFP         27,278,664 27,278,664  

Total by Type $12,590,394 $34,201,563 $4,976,000 $84,321,876 $219,630,478 $355,720,311 100.0%

Table 1 3.5% 10% 1% 24% 62% 100.0%

Table 2: Actual Aid Disbursement by Partner and Aid Modality, FY2010/2011

DonorBudget Support Pooled Fund Trust Fund

GoL-executed Projects

Non-GoL Executed Projects

Total by Partner

% of total aid

AfDB       14,513,863 909,450 15,423,313 3.6%

DFID/UK   6,440,000 4,025,000 266,455 3,458,280 14,189,735 3.3%

EC 27,495,000   42,300,000   43,040,116 112,835,116 26.5%Denmark         5,891,368 5,891,368 1.4%Foundation         2,083,988 2,083,988 0.5%Germany         3,147,368 3,147,368 0.7%

Ireland   3,525,000     891,654 4,416,654 1.0%

Norway       19,095,477 16,370,184 35,465,661 8.3%

United States         142,387,779 142,387,779 33.4%

Sweden       6,930,000 11,354,000 18,284,000 4.3%World Bank 11,485,200   9,766,538 17,202,576   38,454,314 9.0%

UN System subtotal 0 0 0 0 33,648,261 33,648,261 7.9% - UNFPA         2,844,308 2,844,308  UNICEF         3,972,025 3,972,025  

- WFP         26,831,928 26,831,928  Total by Type 38,980,200 9,965,000 56,091,538 58,008,371 263,182,448 426,227,557  

9.1% 2.3% 13.2% 13.6% 61.7% 100.0%

Concluding notes; how does it all affect GoL planning, coordination and budgeting?

The purpose of reporting aid information is to support sound financial management practices, promote allocation efficiency, and to enable decision-makers understand recurrent cost implications of investment project from a good macroeconomic management perspective. Unfortunately, the lack of accurate information; executing aid outside budget; and other practices outside of country system have the following implications:

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• Pose a challenge for budget preparation (the lack of a comprehensive picture/accurate data information on aid complicates budgeting process, overwhelm GoL development goals and creates duplication in service provision)

• Does not align donor funding with GoL development strategies

• Makes systematic reporting challenging (leaving GoL incapable to support better information exchange with donors, including vigorous tracking of ODA)

Concluding notes; how does it all affect GoL planning, coordination and budgeting? (Cont’d)

Questions?