The Ministry of Finance and Economic Cooperation as focal point for development cooperation and the coordination office for Global Partnership for Effective Development Cooperation (GPEDC) participated on the 2nd HLM of the GPEDC held from 28 Nov to 1 Dec 2016.
The delegation was led by Mr. Fisseha Abera, Director, and International Financial institutions and comprised of MoFEC experts Mr. Gebreegziabher Gebru and Ms. Hinjat Shamil. Delegates from the Ethiopian Embassy in Kenya including Deputy Ambassador Ato Kefelgen Amtataw, W/ro Fantaye Alemayehu, and Ato Getachew Teshome, also actively participated in the 4 day meeting.
The high-level meeting was preceded by a two-day preparatory meetings – 28-29 November 2016, which included forums on Youth and Women, as well as Parliamentarians forum and symposium on development finance, which the Ethiopian delegation actively participated on. H.E Uhuru Kenyatta and dignitaries from UNDESA, OECD and representatives of CSO opened the high-level meeting on 30th November 2016. The two days HLM was complemented by 40+ side-events.
The Ethiopian delegation actively participated on the plenary sessions as well as on the various side-events, with a particular focus on those on financing Agenda 2030, effective development cooperation and strengthening of the Global Partnership for Effective Development Cooperation, DRM and tax cooperation.
The meeting was an excellent opportunity to learn country experiences on integrated financing for development and domestic resource mobilization and contribute to discussions on the need for more country ownership of development cooperation through the use of country systems and forward looking expenditures beyond aligning to country priorities, as well as ODA as a primary tool and catalyst for development.
Highlights from the meeting include:
- Engage in discussions on how the GPEDC can be strengthened to support 2030 efforts and Agenda 2063, and the need for strengthening country ownership of development cooperation.
- Sharing experiences on how ODA can be effectively utilized for the achievement of the SDGs and as well as a catalyst for other sources of finance.
- Opportunity to lean about ongoing initiatives and country experiences, particularly in the Asia pacific, on Development Finance Assessment and the integrated finance framework (through UNDP Asia Pacific regional platform). Contacts with several potential resource people were made including the Africa regional platform.
- The growing role of regional organizations and need to intensify efforts through regional initiatives, and consolidate achievements from regional capacity building initiatives including the NEPAD’s Africa platform for development effectiveness.
- Active participation and contacts made with resource persons on tax cooperation and domestic resource mobilization including Addis Tax initiative.
The adoption of the Busan Partnership for Effective Development Cooperation at the 4th High Level Forum on Aid Effectiveness took the global partnership agenda to a new level. By recognizing the new challenges and opportunities in the world and gaps in previous aid effectiveness commitments, the Bussan Partnership agreement came up with a new partnership framework that is broader in scope, results-oriented and more inclusive than before. It is also founded on shared principles, common goals and stronger commitments for effective international development. To monitor the progress that has been made in implementing the Bussan Partnership, a global monitoring exercise was conducted under the guidance of the Steering Committee of the Global Partnership for Effective Development Co-operation. Among ten indicators used globally, five were measured at country level.
The Mexico High Level Communique agreed on 16 April 2014 builds on the Busan outcome and recognizes the progress made in upholding the Busan principles of country ownership, focus on results, inclusiveness, transparency and mutual accountability, while conceding that much more effort is required to fully implement these commitments. Special emphasis is placed on domestic resource mobilization; middle-income countries; south-south, triangular cooperation and knowledge sharing; and business as a partner in development. As many as 38 voluntary initiatives were annexed to the Communique.
What does this mean for Ethiopia?
In 2013-14, Ethiopia participated in the post-Busan monitoring survey. At the country-level, the survey examined five indicators explained in further detail below. Ethiopia was above the global average for all five of these indicators.
Annual predictability results are in line with the results from the previous survey with 89% of funds disbursed as planned in 2013 compared to 88% in 2010, at the time of the last (Paris Declaration) monitoring survey. The indicator measures the proportion of scheduled disbursements that were actually disbursed. Seven partners disbursed 100% of what was scheduled for disbursement (African Development Bank, Australia, Germany, Ireland, Italy, UK, World Bank), while eight others did not communicate any scheduled disbursements despite disbursing ODA in the year under review (Canada, Czech Republic, GEF, Global Fund, Kuwait, Saudi Arabia, Sweden, and the United States).
A new indicator measuring commitment to medium-term predictability was introduced in 2013. The indicator refers to the estimated proportion of total funding reflected in rolling three- to five- year expenditure plans communicated to the Government. In Ethiopia, coverage for the next three years was 85%. Interestingly, partners that could provide plans for the next year could also do so for the second and third years, providing a steady percent of flows covered by medium-term plans over the years, whereas at the global level the availability of forward information decreases over the planning horizon.
Aid on budget examines the proportion of scheduled disbursements actually recorded on budget (and approved by Parliament). In 2010 only 49% of aid was recorded in the Government’s annual budget, but great progress was made in the latest round of monitoring, with 66% of aid on budget. Data for this indicator was determined based on the amount of development cooperation recorded as part of the Government’s EFY 2004 national budget proclamation, which was discussed and approved by the House of Peoples’ Representatives. The indicator serves to record domestic oversight and accountability for the use of development cooperation funding and results (funds can be recorded on budget even if they do not pass through the country’s Treasury).
Ethiopia meets the requirement on mutual accountability, as it did in 2010, by having country-level targets, assessments toward targets, involving non-executive stakeholders, and public results. Although Ethiopia does not have an aid policy or partnership policy, the Development Assistance Group (DAG) and the Ministry of Finance and Economic Development (MoFED) have previously agreed on an aid effectiveness action plan with clear indicators to measure progress. In addition, the Government and the DAG jointly monitor the Growth and Transformation plan and have identified 80 indicators to track progress. The annual High Level Forums (HLF), together with various sector working group and program meetings, regularly discuss the implementation of sector strategies and national priorities. Non-government organizations and CSOs are involved through participation in ad hoc sector working group meetings.
On gender equality and women’s empowerment Ethiopia is cited as one of the few countries with a system in place to track and make public allocations on gender equality. Ethiopia finalized its national gender-responsive budgeting guidelines for mainstreaming gender in the program budget process in November 2012. The focus should now be on the implementation of these guidelines.
The quality of the country’s public financial management systems is based on the World Bank’s Country Policy and Institutional Assessments criteria 13. Ethiopia scores the same as it did in 2010 (3.5 on a scale of 1-low to 6-high). Globally speaking, the advantage of using this criteria is that it provides regularly-updated and comparable data across countries; however, Ethiopian officials and other representatives have expressed frustration regarding the use of this indicator to measure the quality of systems since they do not believe it takes into account progress made over the past few years. The concern is shared by other countries and was discussed at the post-Monitoring Workshop. The final report reflects the fact that the data on the quality of country systems has not been validated by participating countries.
Since 2010, there has been an overall decrease in the use of the country’s PFM and procurement systems by development partners in Ethiopia. This was measured by examining 4 elements: national budget execution; financial reporting; national auditing; and usse of national procurement systems.
An average of 51% of total ODA used the country’s PFM and procurement systems compared to 66% in 2010 (the 2010 figure was revised to correspond to the 2013 methodology). The 51% total use of country systems represents an average of the 4 elements listed above. While strong systems are a prerequisite to ensure that providers will disburse their funds through them and reduce their reliance on parallel systems or their own procedures and implementation, using developing countries’ own institutions and systems also serves as a means to strengthen these institutions and systems themselves, reduce transaction costs and enable greater country-level accountability towards citizens and parliament.
The share of untied aid in Ethiopia as reported to the DAC in 2012 was 87% compared to 70% in 2010. “Traditional” providers of development assistance are delivering on commitments to untie more ODA despite pressures on ODA budgets.