Poverty Reduction 44959 289 April 2008 Findings reports on ongoing operational, economic, and sector work carried out by the World Bank and its member governments in the Africa Region. It is published periodically by the Operations Results and Learning Unit on behalf of the Region. The views expressed in Findings are those of the author/s and should not be attributed to the World Bank Group. PREM Anchor Support to the Africa Region The goal of the Poverty AFR connects with the Reduction and Economic objectives of the AAP. Management (PREM) Network is to shape policies and to help AAP focus: Results countries build successful framework for achieving national strategies for impact sustained, shared growth, and The PREM Anchor is working to strengthen partnerships at closely with the AFR on ways the country level for improved to improve the results focus aid effectiveness. There is no and analytical foundations of region in which this goal is poverty reduction strategies more challenging than in (PRSs). A study is under way Africa. on the integration of PRS In support of the Africa Action reporting and budget Plan (AAP), the PREM Anchor implementation covering eight has actively stepped up its African countries to improve support to the Africa Region existing reporting instruments (AFR) in fiscal year 2006 and assess how to better align (FY06).As of the end of PRS reporting with budget January 2006, Anchor staff reporting. Work is also under had provided nearly 83 staff way to strengthen the quality weeks in direct cross-support of second generation PRSs and alone. Activities have included their relevance as a knowledge generation, high- framework for scaling up and level policy support on improving aid effectiveness. To missions, the development of this end, the Anchor is toolkits and diagnostics to exploring ways of using the improve policy advice on PRS process to increase aid growth strategies, among effectiveness, along with other Findings others. Most of this work has bilateral donors. A conference been provided on a demand- with several African countries driven basis, and PREM plans and donors on this topic is to continue providing such tentatively planned for the services subject to its fourth quarter. Both of these budgetary and skills capacity. activities feed directly into the This note illustrates how the AAP's objective of supporting PREM Anchor's support to the results-oriented national strategies. The effectiveness of aid will ultimately be judged by the Box 1: Direct country support for building capable states and impact it has on the ground. improving governance The Anchor's work on poverty analysis, monitoring, and impact Strong institutions, good governance, and an understanding of the evaluation is heavily focused on political economy in which PREM's clients operate are necessary elements to providing solid policy advice and achieving results on the the AFR. Some examples of ground. Following are examples of activities in support of this end. collaboration include a In Kenya and Madagascar PREM has implemented pilot leadership conference on improving the and ethics programs focused on building effective cabinet teams to further quality of impact evaluations of reform and improved accountability and service delivery for the citizens. government programs in This has been done through a series of cabinet retreats for both technical Kenya; the implementation of skills and team building. six country studies to identify Analytical and team dialogue support was provided for Uganda's the most promising political economy assessment and follow-up discussions in response to a institutional arrangement for similar steep deterioration of governance. PRS poverty monitoring PREM provided high-level support to the Ethiopia country team in response to an urgent request for a governance assessment to provide the systems; and a workshop analytical and strategic foundations for an Interim Strategy Note in re- organized in collaboration with sponse to the political crisis. the African Development Bank In Rwanda, cross-support was provided for the PRS on Service Delivery (AfDB) and several other and Decentralization & Territorial Reform, which included a high-level bilaterals on how to deepen the conference with the prime minister and ministers in attendance. growth diagnostics in PRSs and On the public expenditure side, a clinic was held for a visiting strengthen the links to Democratic Republic of Congo delegation on Public Expenditure national monitoring and budget Tracking/Managing Teachers Top Ups as part of a Development Policy systems. Loan. Advisory support was also provided to the Government of Lesotho on Medium-Term Expenditure Frameworks and lead Public FinanceAssess- ments for 18 HIPC G-8 Debt Relief countries' eligibility. AAP Focus: Building capable states and improving developing a strategy for risk governance governance and corruption realities and to more mitigation and effective control A country's ability to maximize accurately and of corruption in the AFR, and sustain growth depends on comprehensively monitor which included methods to the quality of its institutions progress on the ground; and identify high-risk countries, and the capacity to efficiently such as corruption and and effectively deliver services. · Helping governments governance indicators and The PREM Anchor is working improve the efficiency of diagnostics. with the AFR to build on efforts internal and external controls that African countries have that monitor budgetary taken during the past few execution to contain the AAP Focus: Supporting the years and in support of the misuse of public resources. Drivers of Growth AAP's goal of building capable In addition to providing direct states and improving Growth is at the core of country support (Box 1), PREM governance. Efforts have PREM's work program. Its focus Anchor staff have been actively largely focused on: continues to be on providing involved in the Africa Capacity sound policy advice to help · Building capacity to Building Initiative and the countries accelerate and strengthen governance in committee responsible for the sustain growth through the client countries; World Bank's new capacity medium term, of which building strategy for AFR. supporting the drivers of · Creating new instruments to Working with the regional growth is key. In FY06, the better tailor CASs and management team, support Anchor's focus on Africa has operations to political was also provided on been extended substantively and sharpened to reflect the countries in the Integrated on-going advice on issues priorities set out in the AAP. Framework; however, related to debt and growth, The topics PREM is working on significant work has also been borrowing strategies that include: conducted in Kenya, where prevent a rapid PREM has had a major role in reaccumulation of debt, and MACROECONOMIC IMPLICATIONS OF staffing the missions and increasing debt-management SCALING UP: PREM Anchor is participating in the follow-up capacity in African countries examining the macroeconomic policy dialogue. (in collaboration with the implications of aid flows using AfDB). case studies on Uganda and TRADE FACILITATION: PREM Tanzania, and examining the supports the trade facilitation consequences of sharp negotiations in Geneva and the increases in aid for capacity building initiatives it AAP Focus: Participating in infrastructure development in has or will be carrying out for and Sharing Growth 12 African countries. A toolkit African countries with trust (Connecting the Poor to that enables users to conduct fund support from the Markets--Scaling Up Human country-specific analysis is European Community (EC), the Development) under development. United Kingdom, and Sweden. Making Africa's growth more PREM staff are also highly MEDIUM-TERM GROWTH FORECASTS: inclusive means connecting engaged in the Integrated The application of new the poor to markets, scaling Framework and the broader approaches to benchmark up human development, and Aid for Trade Initiative, which medium-term growth forecasts ensuring that both men and will provide large returns for for all African countries, with women participate in and the AFR. the intention of making risk share the returns from analysis more realistic, is REGIONAL INTEGRATION: PREM has growth. In support of these under way. Given the been working closely with the efforts, the PREM Anchor is vulnerability of African oil AFR Vice-Presidency and the currently tackling problems exporters and importers, Department for Regional related to migration, labor PREM is analyzing the fiscal Integration in preparing a markets, and economic and oil-wealth management strategy for engagement and mobility and their links to implications of the oil price supporting dialogue with the poverty and growth. For shock for Nigeria and other EC on Economic Partnership example, it has undertaken a African oil exporters and Agreements. It is also providing joint program with the AFR to importers. technical assistance for the improve the quality of informal Common Market for Eastern labor diagnostics in the CREATING THE EXPORT PUSH: The and Southern Africa region. In addition, the Moving Anchor is looking at the (COMESA). Out of Poverty Study entailed institutional and economic close collaboration with constraints to export DEBT MANAGEMENT: The PREM national policy institutes and diversification and Anchor has comprehensive country teams to deepen competitiveness in Africa. In a knowledge about African debt PREM's understanding of related context, it is also issues and continues to provide economic mobility, using both studying the kinds of tertiary cross-support and technical quantitative and qualitative skills that are needed to advice on the implementation methods. A flagship effort, the promote higher value exports of the HIPC Initiative, the low- Pro-Poor Growth Diagnostic in Africa. Furthermore, PREM income debt sustainability Facility, is also under way, is providing cross-support in framework, and additional debt which will help support the areas of trade policy, trade relief proposals. For example, increased donor collaboration facilitation, and standards and by the end of FY06, Anchor staff and support for country- co-task-managing Diagnostic will have worked with country focused analytical work on the Trade Integration Studies in teams on debt sustainability linkages among poverty, Rwanda and Niger. This work analyses for most African IDA equity, and growth in the has largely focused on countries. Staff also provide region. Physically connecting the poor (MDG) and draw links between initiatives. The topics this to markets and scaling up gender and growth. A growth group is addressing include human development will and gender assessment was achieving greater require additional investments recently conducted for Kenya predictability and appropriate in infrastructure, health, and and work on the links between flexibility of donor financing; education. PREM is developing private sector development and strengthening the poverty analytical tools to assess the gender is under way in reduction strategy process; fiscal space available for these Tanzania and Ghana. PREM is and energizing the investments and conducting working with its colleagues in consultative group and detailed assessments of the the AFR to organize workshops roundtable processes to main dimensions of the fiscal and training on gender and achieve clarity and secure the space problem. The empirical economics during the coming financing needed for country pilots for this work will focus months. plans to ramp up MDG efforts. on Africa. To ensure that these Work is under way to investments are used strengthen the consultative efficiently and to help improve AAP Focus: The scaling up group/roundtable processes at the monitoring of sector agenda (Strengthening the country level to better link specific public expenditures, partnerships at the country resources to results at the PREM is conducting an level) country level. assessment of the cost In close collaboration with the performance of service delivery Organization for Economic Co- in which pilots are also being operation and Development carried out in the AFR. ( O E C D ) - D e v e l o p m e n t This Findings is a reprint of Finally, shared growth Assistance Committee (DAC), PREM Note No. 107, which was cannot be achieved if more PREM has brought together issued by the PREM VP under than half of the population is DAC members, multilateral the guidance of Danny left out. To help ensure that development banks, the Leipziger. For more information both men and women International Monetary Fund about PREM and PREM participate in and benefit from (IMF) and the United Nations publications, visit their website growth, PREM has stepped up Development Programme at www.worldbank.org/prem efforts to accelerate progress (UNDP) to discuss practical towards the gender steps to help ensure the Millennium Development Goal effective use and delivery of aid and to support scaling up