Proceedings of the African Plenary on National Poverty Reduction Strategies and the Implementation of the Millennium Development Goals (MDGS)

I. KEY ISSUES AND RECOMMENDATIONS

A. Growth Poverty Reduction and the MDGs 
B. Achieving the MDGs, the North African Experience in Poverty Reduction 
C. Ownership, Leadership and Accountability for the MDGs 
D. Capacity Needs for the Implementation of PRSs and Attainment of MDGs
E. The Emerging Aid Architecture, PRSs and MDGs

II. OPENING AND CLOSING SESSION HIGHLIGHTS

Opening Session 
Overview 
Wrap-Up and Closing 
Adoption of the Outcome Statement

III. ATTENDANCE

IV. WORK PROGRAMME

I. KEY ISSUES AND RECOMMENDATIONS

The main objective of the "African Plenary on National PRSs and the Implementation of the MDGs" was to assess the effectiveness of First Generation PRSs (FGPRSs) and come up with improved Poverty Reduction Strategies (PRSs) that will more effectively reduce poverty and achieve the MDGs. In this context, the Plenary acknowledged that even though FGPRSs had been associated with increased spending on social services, greater involvement of stakeholders in the preparation of the strategy and heightened attention to governance issues, both the content and processes underpinning the PRS suffered from several constraints. Weaknesses in content included: insufficient attention to growth and employment issues; weak analysis of the underpinnings of poverty and the drivers of growth; inadequate alignment of donor resources with the PRS and limited attention to gender issues. Flaws in the PRSs process include the failure of participatory processes to adequately involve political organizations and parliament as well as the virtual sidelining of civil society from discussions of the macro-economic framework. Moreover, the importance of developing capacity to sustain the implementation of PRSs was largely overlooked and, most importantly, the PRS process was invariably driven by the desire for debt relief and the need to secure endorsement by the boards of the IMF and World Bank. These weaknesses, the Plenary noted, needed to be addressed if Second Generation PRSs (SGPRSPs) are to succeed in achieving the MDGs.

Informed by the findings of ECA's PRSP-LG on the experiences of African countries with FGPRSs, the Plenary reflected on, and discussed the following issues relating to PRS process and content:

A. Growth, Poverty and the MDGs

B. Achieving the MDGs, the North African Experience in Poverty Reduction

C. Ownership, Leadership and Accountability for the PRS

D. Capacity Needs for the Implementation of PRSs and Attainment of MDGs

E. The Emerging Aid Architecture, PRSs and MDGs

A. Growth Poverty Reduction and the MDGs

Compared to other regions of the developing world, much of Africa has made limited progress in reducing poverty and achieving the Millennium Development Goals (MDGs). Although Africa's growth rate has improved, especially over the last decade or so, it has been volatile and insufficient to achieve the MDGs. Most importantly, the benefits of the growth achieved have not, for the most part, been shared broadly across society largely because growth has been concentrated in the extractive sectors.

Beyond broad-based growth, SGPRSs must take into account country specificities since country experiences on progress towards achieving MDGs vary considerably throughout Africa.

For the poorest countries, stimulating faster economic growth is essential (though not sufficient) for poverty reduction. This requires: coherent and consistent macroeconomic policies that ensure reasonable price stability; stronger international efforts aimed at coping with external shocks; and sustained prudent public expenditure policies.

For post-conflict countries,the restoration of peace and security is the first development priority, in parallel with a concerted effort to restore essential infrastructure and services. The experience of countries that have emerged from conflict, like Uganda, Mozambique, Rwanda and, more recently, Sierra Leone and Liberia, is that such a strategy can lead to a quick economic rebound. For the longer term, however, sustaining growth and ensuring a good spread of its benefits requires a special focus on developing institutions and capacities.

For middle income countries,achieving the MDGs will require that they maintain, at least, existing growth rates; emphasise targeted programmes for key disadvantaged groups; and develop effective policies to address spatial inequalities. These measures are necessary to address inequalities in such countries.

Financing the implementation of PRSs will require resources beyond what can be delivered at the national level particularly in low-income countries. In recognition of this fact, the UN Millennium Project (UNMP), the Commission for Africa (CfA), the G8 and the UN General Assembly all concur that a "Big Push"¹ is needed to spur growth and achieve the MDGs. Implementing the "Big Push" strategy will, however, require that adequate absorptive capacity and fiscal space be created within the macro-economic framework to accommodate the increased revenues and expenditures associated with additional ODA inflows.

Effective utilization of resources from the "Big Push" will require an investor-friendly climate achieved through sustained macro-economic stability and the removal of administrative barriers to private sector growth. Resources must be used to scale-up investments particularly in capacity development and retention, energy, agricultural modernization, urban as well as rural development and infrastructure. Measures that promote regional trade and gender equality, while tackling the scourge of HIV/AIDS and other infectious diseases, are also critical for growth. These efforts must be underpinned by robust domestic resource mobilization initiatives to facilitate long term self-sufficiency and leveraged, where appropriate, by prudent applications of science and technology, particularly ICT. Moreover, to be sustainable, these policy measures must promote peace, security and good governance and must be anchored in principles of environmental sustainability.

SGPRSs must maximize and promote women's contribution to economic development and assess the impact, by gender, of broad-based growth policies. In this regard, emphasis must be placed on gender and age disaggregated data to inform policy implementation, and monitoring and evaluation. Furthermore, special attention must be paid to small enterprises and microfinance to ensure faster growth in employment and informal sector incomes, especially in agriculture.

Proposed Actions

1. Policymakers in Africa must improve the pro-poor growth orientation of PRSs by:

• Ensuring that they are more comprehensive and take due account of the peculiar circumstances of each country;
• Sustaining macro-economic stability as a basis for long-term growth while creating adequate fiscal space, within the macro-economic framework, to finance initiatives that generate broad-based employment and income opportunities particularly for the rural poor;
• Addressing income inequality through: targeted transfers to the poor; increased investments in human capital that benefit the poor; and balanced regional development to reduce rural-urban disparities;
• Designing and implementing monitoring and evaluation systems that assess the growth performance of Member States and continually inform and shape growth policies;
• Recognizing the potential of the informal sector as an important source of private sector development in Africa;
• Addressing existing gender disparities through targeted policy measures;
• Ensuring that PRSs effectively harness the opportunities of regional integration for trade while addressing constraints to the implementation of trade and regional integration policies;
• Reducing barriers to market access and financial services by the private sector, in general, and rural dwellers in particular;
• Identifying sectors, such as agriculture and infrastructure, with promise for growth and facilitating investments in such sectors;
• Securing access by rural dwellers to productive assets such as land, water and appropriate technology.

2. Policymakers must commit to grow the private sector by phasing out regulatory barriers without jeopardizing the rights of workers as specified in the International Labor Organization (ILO) convention on the Fundamental Rights and Principles at Work.

3. Policymakers must sustain efforts in linking the PRS with the national budget and expenditure frameworks, to ensure that development priorities find expression in national budgets and are funded and implemented as programmed;

4. Policymakers must put in place appropriate policy instruments to strengthen the capacity of the economy to absorb expected inflows from the "big push" and limit the potentially destabilizing effects of such inflows.

5. Policymakers must enjoin developed countries to fully and expeditiously fulfill their commitments on ODA, debt relief, market access and technology transfer in order to assist African countries to achieve the MDGs.

6. Policymakers must use Science and Technology, particularly Information and Communication Technologies (ICTs), as a tool to promote sectoral growth:

B. Achieving the MDGs, the North African Experience in Poverty Reduction

Growth has been central to poverty reduction and the achievement of the MDGs in North Africa. However, the growth performance has varied across countries. Tunisia and Egypt made good progress in reducing poverty and achieving the MDGs due to increased growth throughout the 1990s. On the other hand, poverty worsened in Morocco during the same period. In addition to rapid growth, poverty reduction has been accelerated by improvements in education, gender equality, and the reduction of the population growth rate. Nevertheless, inequality, particularly spatial inequality, remains a problem which is being tackled through targeted transfers to the poor.

Like most other African countries, Egypt, Tunisia and Morocco face considerable problems in terms of institutional capacity, especially with regards to the ongoing decentralization process. The capacity constraint has slowed, considerably, the reform process.

Tunisia, Egypt and Morocco have incorporated national poverty reduction strategies into their broader national objectives over recent years. There has also been a considerable shift in the region in terms of opening the policy and poverty debate to a broader spectrum of stakeholders, including civil society and the private sector.

Aid conditionalities have been decreasing among many bilateral donors. In parallel, efforts have been made to increase the relative share of budget support in the overall aid envelope.

Political commitment and leadership are essential to growth and poverty reduction; good governance improves the chances of both pro-growth and pro-poor policies being effectively implemented. However, the PRS process, to date, has been viewed in largely technocratic terms. Meanwhile, the creation of parallel processes has contributed to the impression that the PRS is really "for donors" and not for the nation.

Second Generation PRSs must therefore: redress the imbalance between external and domestic accountability by strengthening domestic systems of accountability; consolidate and integrate the PRS with national processes, particularly by involving parliaments and other organized social and political groups; and institutionalize broad stakeholder involvement in all aspects of the process including discussions of the macro-economic framework and input into the monitoring and evaluation of PRSs.

The concept of ownership must include creative mechanisms for embracing the perspectives of women and men in their diversity and improving the quality of their engagement in the PRS process. Furthermore, PRS accountability systems must be refined to monitor the domestic, regional and international commitments, made by African governments, to promote women's rights.

Proposed Actions

7. African governments must facilitate improved stakeholder participation in the design, formulation, implementation and monitoring of national development strategies by:

• Building and enhancing technical capacity for policy design, decision-making, implementation and monitoring;
• Generating more reliable, relevant and timely statistics including gender-sensitive statistics, for decision making and accountability;
• Improving the representativeness of stakeholders and the quality of their participation;
• Improving accountability to parliaments and the citizenry in the spirit of strengthening domestic accountability

8. Policymakers in Africa and their external partners must improve ownership and accountability by avoiding the creation of parallel and duplicative institutions that could threaten the legitimacy of the fledgling institutions of representative democracy in Africa.

9. African governments must formally recognize the role of communities in the development process and encourage their mobilization and empowerment toward poverty reduction strategies and sustainable development.

Africa's capacity constraints have both internal and external dimensions. The internal dimension of the capacity problem relates to: weak organizational structures and institutional frameworks; poor and inadequate skills; and limited facilities and resources. The external dimension is rooted in a disabling policy environment that distorts incentives for capacity development and retention.

Capacity building initiatives must be coordinated, coherent and integrated with national processes and institutions. Greater consideration needs to be given to establishing institutions with a clear mandate for resolving capacity issues. Past efforts to address capacity constraints have lacked an appreciation of: the institutional context at the national level; the availability of skills within countries and in the Diaspora; and the institutional reforms (including finance) needed to mobilize them.

Capacity building initiatives must devote greater attention to building as well as retaining capacity. In the past, more effort has been devoted to stimulating the inflow of capacity than on stemming its outflow.

Strengthening the capacity of Member States to implement PRS will require investments in tertiary education and research and development as well as basic education. These institutions must be relevant to the capacity needs of both the private and public sectors taking into account gender disparities in capacity endowments.

Policy Actions

11. Ensure a balance between investments in basic education on the one hand, and investments in tertiary education and research and development on the other hand.

12. Evaluate the effectiveness of existing capacity building initiatives in nurturing and retaining capacity while adopting and implementing capacity building strategies that:

• Integrate capacity building initiatives into national and sub-national processes and development programmes;
• Build and sustain capacity for gender sensitive planning, budgeting and monitoring and evaluation systems,
• Improve and sustain public sector capacity and expedite ongoing public sector reforms;
• Explore options for improving capacity through: strategic partnerships between local and foreign based nationals; and partnerships between the public and private sector including civil society and think tanks;
• Improve capacity retention in Africa by developing appropriate incentive systems for public institutions and by enhancing the overall environment for professionalism

E. The Emerging Aid Architecture, PRSs and MDGs

African governments need to develop explicit aid management policies that promote self-sufficiency in the long term, and insist on budget support and other modalities that are more predictable and less burdensome, while at the same time strengthening their capacity to demonstrate results.

Mutual accountability systems need to be developed along with strengthened capacity at the continental level, through the AU, its NEPAD Secretariat, and ECA, to support national efforts at better aid management.

Policy Actions

14. Donors must coordinate and harmonize their aid delivery processes to minimize transaction costs and to improve alignment of aid, including technical cooperation, with national priorities as articulated in national development programs.

15. African policymakers must strive for long-term economic self sufficiency by utilizing ODA more productively and efficiently and by embarking on robust and sustainable domestic resource mobilization initiatives.

16. African policymakers must insist on sector and budget support as the preferred aid delivery modalities and, in parallel, improve national systems of governance and accountability in the use of aid resources.

17. The AU Commission, in collaboration with Member States, must institute "mutual accountability" systems to systematically monitor the effectiveness of aid, as well as donors' compliance with their commitments to support African countries, taking into account the role of the Africa Partnership Forum in monitoring mutual accountability at the pan-African level, the work of the OECD/DAC on monitoring aid flows and aid effectiveness, and the positive experience of some countries with independent monitoring of mutual accountability.

18. The AU and the ECA must play a leading role in institutionalizing aid management and monitoring systems at the continental level, in order to ensure effective use of aid and facilitate the sharing of continent-wide aid experiences.

19. African governments must promote greater awareness about initiatives and declarations on aid effectiveness, such as the Paris Declaration, in order to mobilize and inspire parliaments, civil society and other stakeholders to monitor their implementation.

20. Policy makers must ensure that aid is aligned with PRSs and that PRSs are, in turn, consistent with key AU initiatives such as NEPAD and APRM.

21. Policymakers must ensure that aid management mechanisms have in-built systems that encourage participation of gender mainstreaming.

The Next Steps

22. The ECA-initiated PRSP-LG must be strengthened and renamed the PRS-MDG Learning Group to better capture its new mandate to evaluate progress towards achieving the MDGs and the implementation of national development strategies.

23. The project, "Enhanced Knowledge Sharing Network to Support the Poverty Reduction Process in Africa", should serve as a mechanism for sustaining information sharing and policy dialogue in-between meetings of the Learning Group. In this context, the Learning Group must establish links with key policy-shaping fora and institutions, particularly the AU and its NEPAD program, the APRM, the Africa Partnership Forum (APF), the Strategic Partnership for Africa (SPA), the spring meetings of the International Finance Institutions and The Big Table. The ECA, in collaboration with the AU, must develop a mechanism that ensures that outputs of the PRS-MDG LG inform ECA's Annual Conference of Ministers of Finance.

II. OPENING AND CLOSING SESSION HIGHLIGHTS

Opening Session

The session opened with welcoming remarks by His Excellency, Ambassador Amr Helmy, Acting Assistant Foreign Minister for International Economic Relations. The Ambassador acknowledged the timeliness and relevance of the Plenary given the urgency of tackling poverty in Africa. He observed that political will by Member States and coordination amongst partners are critical for the achievement of the MDGs. He noted that as a forum for policy dialogue and exchange of ideas among Member States, the Plenary was an important step towards improving Poverty Reduction Strategies.

In his opening address, the Executive Secretary of ECA, Mr. Abdoulie Janneh, reaffirmed ECA's commitment to collaborate with the African Union Commission, the UNDP and other UN agencies in addressing Africa's development problems. Mr Janneh identified three main challenges to poverty eradication: establishing peace and security; combating HIV/AIDS, Tuberculosis, Malaria and other related diseases; and generating broad-based employment through accelerated economic growth. In this context, he reiterated the importance of: embedding the MDGs in the PRS; sharpening the growth focus of the next generation of PRSs; improving ownership, leadership and accountability for national development; insisting on enhanced predictability and harmonization of aid; strengthening domestic capacity for implementation of PRSs; and learning from the experiences of Member States. He also noted that successful implementation of PRSs requires the unwavering support of sector ministries. To this end, he called for a shared understanding of national priorities by sector Ministers and Ministers of Finance.

Speaking on behalf of Mr. Alpha Oumar Konare, Chairman of the African Union Commission, the African Union Commissioner, Mr. Maxwell M. Mkwezalamba, reminded Member States about the importance of addressing gaps in the implementation of their PRSs. He underscored the need for Member States to accord high priority to: pre-empting conflict and addressing HIV/AIDs, TB and other related diseases; pressing for debt cancellation and the removal of trade barriers; and promoting and sustaining regional integration. He reaffirmed the commitment of the African Union Commission to coordinate and harmonize continent-wide integration.

In a video presentation to the Plenary, Mr. Kermal Davis, The Administrator of the United Nations Development Programme (UNDP), stressed the need for fiscal space in the macro-economic framework to accommodate additional ODA and spur economic growth. He called on donor countries to live up to the commitments of the Paris Declaration.

Mr. Gobind Nankani, Vice-President for the Africa Region of The World Bank, observed that Member States had accorded greater priority to external accountability than to domestic accountability in the implementation of FGPRSs. This trend, he noted, was detrimental to national ownership. He therefore urged Member States to address the problem by strengthening domestic systems of accountability partly through better communications flows to stakeholders.

Ms. Zeinab El Bakri, Vice President of Operations, addressed the Plenary on behalf of Mr. Donald Kaberuka, President of the African Development Bank (AfDB). She underscored the need for continued macro-economic stability in Africa as a basis for poverty reduction and the achievement of the MDGs. The Vice President also noted, with concern, the limited progress in achieving agricultural transformation in a number of African countries despite the apparent priority accorded to the sector in most PRSs. She further observed that issues of infrastructural development had not been addressed in a systematic manner by most Member States. Furthermore, she expressed concern about the failure of PRSs to address constraints facing women in agricultural production.

Ms. Zeinab El Bakri therefore emphasized the need to channel additional resources for agricultural and infrastructure development and promote gender equity in access to productive assets. This, she urged, was critical to enhance land and labor productivity, facilitate access to national and international markets for trade in agricultural products, and improve the quality and quantity of basic social services, especially for the poor in rural areas in Africa.

His Excellency, Mr. Osman Mohammed Osman, Egypt's Minister of Planning and Local Development, emphasized the importance of anchoring the MDGs in national development strategies and accelerating growth to reduce poverty and achieve the MDGs. He noted that Egypt's growth rate in excess of 5 percent, since 2004, had enabled the government to generate 750 thousand jobs per year, undertake ambitious safety nets for the poor and to subsidize energy and food items in the order of 40 and 30 billion Egyptian pounds, respectively, per annum. He added that unemployment is expected to decline from 9.6 per cent to 5 per cent by 2012 on account of the nation's robust growth.

He attributed Egypt's success in achieving several of the MDGs to the country's strategy of anchoring its poverty reduction strategy in its long term development plan. Notable MDG successes achieved by Egypt include gender parity in access to secondary and tertiary education, improved urban access to water, and a decline in the percentage of population living on less than a dollar a day.

He also observed that the key to Egypt's success in the area of development has been to include the poor as major participants in, and beneficiaries of, a new social contract between the Egyptian government and its citizens. In this vision, the less privileged segments of the population are viewed, from an economic standpoint, as potentially productive producers and consumers, and from a political perspective, as active stakeholders in shaping the future of the country.

Overview

The Vice President of IFAD, Mr. Cyril Enweze, stated that achieving the appropriate balance between investments in social and productive sectors of the economy is vital to sustaining the implementation of agricultural modernization initiatives. He emphasized the importance of rural participation in the formulation of PRSs and the relevance of linking national strategies with sector strategies for poverty reduction.

The Overview presentation was made by the Acting Deputy Executive Secretary of the ECA, Ms. Josephine Ouedraogo. She explained that the rationale of the Plenary was to take stock of first generation PRSs, relate that experience to the challenge of meeting the MDGs and decide on the next steps. Drawing on the findings of the ECA-initiated PRSP-LG, Ms. Josephine Ouedraogo summarized the experiences of Member States in implementing the first generation PRSs and distilled the key lessons from that experience. She concluded by introducing the sessions of the Plenary and the key issues to be discussed.

Wrap-Up and Closing

In his closing remarks, Mr. Abdoulie Janneh, Executive Secretary of ECA, stressed the need for national development strategies to: support growth in parallel with a continued emphasis on the provision of social services particularly in the health, and education sectors; promote intra-regional and international trade coherent with the regional integration agenda of the African Union and the Regional Economic Communities; facilitate the design of capacity initiatives anchored on identified national priorities; and drive investments in the agricultural and rural sector where the majority of Africans live.

The Executive Secretary reaffirmed ECA's commitment to assist in advancing the agenda for the design and implementation of national development strategies that put African countries on track to achieving the MDGs. In close collaboration with the African Union Commission and the African Development Bank, this objective will be achieved by: building on the work of the PRSP-learning Group and expanding its mandate to focus on exchanging experiences on MDG-related policy interventions at the national level; ensuring that the project, "Enhanced Knowledge Sharing Network to Support the Poverty Reduction Process in Africa", serves as a mechanism for sustaining information sharing and policy dialogue in-between meetings of the Learning Group, and; continuing to provide technical and analytical support to Africa's campaign for debt cancellation.

Mr. Maxwell M. Mkwezalamba, Commissioner for Economic Affairs, African Union Commission, thanked the people and Government of Egypt for hosting the Plenary and expressed his gratitude to the ECA and UNDP for making the meeting a success.

The Plenary was officially closed by His Excellency, Mr. Aly El Sayed Aly Moselhy, Egypt's Minister of Social Solidarity. In his closing address, the Minister affirmed his Government's commitment to implement the recommendations contained in the Outcome Statement of the Plenary.

Adoption of the Outcome Statement

The Plenary adopted the Outcome Statement on 28 March 2006.

III. ATTENDANCE

IV. WORK PROGRAMME

Sunday, 26 March 2006

8:30 - 9:00 Registration

9:00 -10:00 Opening Session

• Mr. Abdoulie Janneh, UN Under Secretary General and Executive Secretary of ECA
• Mr. Maxwell M. Mkwezalamba, Commissioner for Economic Affairs, African Union Commission
• Video Message from Mr. Kemal Dervis, Administrator UNDP
• Mr. Gobind Nankani, Vice President, Africa Region, World Bank
• Ms. Zeinab El Bakri, Vice President Operations, AfDB

Opening Address by His Excellency, Mr. Osman Mohammed Osman, Minister of Planning and Local Development, Egypt

10:00 - 10:15 Coffee Break

10:15 - 11:30 Overview of the Plenary

11:30 - 13:30 Plenary Session 1: Growth, Poverty Reduction and the MDGs

Presenter : Mr. Augustin Fosu, Director, Economic and Social Policy Division, ECA

Discussants:

• Ms. Botlhale O. Tema, Director for Education, Science and Technology, African Union Commission

• Mr. John Page, Chief Economist, Africa Region, World Bank

13:30 - 15:00 Lunch Break

Presenter: Ms. Nivine Mostafa El Oraby, Consultant Economic Research Forum, Cairo, Egypt

Discussants:

• Mr. John Okidi Executive Director, Economic Policy Research Centre, Uganda.

• Mr. Sami Bibi, University of Tunis, Faculty of Economics, Tunisia.

18:00 Cocktail to be hosted by His Excellency, Mr. Osman Mohammed Osman, Minister of Planning and Local Development, Egypt

Monday, 27 March 2006

• Ms. Yassine Fall, AWOMI/UN Millennium Project, Senegal

• Mr. Fredrick Mutsea, Researcher, University of Zambia

• Mr. Lamin Manneh, UNDP

• Mr. Kithinji Kiragu,Public Sector Reform Specialist, Price Waterhouse Coopers, Kenya

13:15 - 15:00 Lunch Break

15:00 - 17:00 Plenary Session 5: The Emerging Aid Architecture, PRSs and the MDGs

Presenter: Mr. Sam Wangwe, Policy Advisor, President's Office United Republicof Tanzania.

Discussants:

• Ms. Linda Van Gelder, PREM, World Bank

• Ms. Barbara Barungi, Regional Bureau for Africa, UNDP

• Mr. Richard Carey, Development Cooperation Directorate, OECD

Tuesday, 28 March 2006

9:00 - 11:00 Wrap Up Session: The second generation of PRSs

Presenter: AU/ECA

11:00 - 11:15 Coffee Break

11:15 - 12:00 Closing Session

17:30 - 18:30 Steering Committee Meeting (only members of the committee)

 1 The Big Push will require at least a doubling of aid plus an acceleration in domestic investment