36078 The World Bank PREMnotes M A R C H 2 0 0 6 N U M B E R 1 0 7 PREM ANCHOR PREM Anchor Support to the Africa Region The goal of the Poverty Reduction and assess how to better align PRS reporting Economic Management (PREM) Net- with budget reporting. Work is also under work is to shape policies and to help way to strengthen the quality of second countries build successful national strate- generation PRSs and their relevance as a gies for sustained, shared growth, and to framework for scaling up and improving strengthen partnerships at the country aideffectiveness.Tothisend,theAnchoris level for improved aid effectiveness. exploring ways of using the PRS process to There is no region in which this goal is increaseaideffectiveness,alongwithother more challenging than in Africa. bilateraldonors.Aconferencewithseveral African countries and donors on this topic In support of the Africa Action Plan is tentatively planned for the fourth quar- (AAP), the PREM Anchor has actively ter. Both of these activities feed directly stepped up its support to the Africa Re- into the AAP's objective of supporting gion (AFR) in fiscal year 2006 (FY06). results-oriented national strategies. As of the end of January 2006, Anchor staff had provided nearly 83 staff weeks The effectiveness of aid will ultimately in direct cross-support alone. Activities be judged by the impact it has on the have included knowledge generation, ground. The Anchor's work on poverty high-level policy support on missions, the analysis, monitoring, and impact evalua- development of toolkits and diagnostics tion is heavily focused on the AFR. Some to improve policy advice on growth strate- examples of collaboration include a gies, among others. Most of this work has conference on improving the quality of been provided on a demand-driven basis, impact evaluations of government pro- and PREM plans to continue providing grams in Kenya; the implementation of such services subject to its budgetary and six country studies to identify the most skills capacity. This note illustrates how promising institutional arrangement for the PREM Anchor's support to the AFR PRS poverty monitoring systems; and connects with the objectives of the AAP. a workshop organized in collaboration with the African Development Bank AAP Focus: Results Framework (AfDB) and several other bilaterals on for Achieving Impact how to deepen the growth diagnostics in PRSs and strengthen the links to national The PREM Anchor is working closely monitoring and budget systems. with the AFR on ways to improve the re- sults focus and analytical foundations of AAP Focus: Building Capable poverty reduction strategies (PRSs). A study is under way on the integration of PRS States and Improving reporting and budget implementation Governance covering eight African countries to im- A country's ability to maximize and sus- prove existing reporting instruments and tain growth depends on the quality of its FROM THE POVERTY REDUCTION AND ECONOMIC MANAGEMENT NETWORK and to more accurately and Box 1: Direct Country Support for comprehensively monitor Building Capable States and Improving progress on the ground; and Governance 3) Helping governments im- Strong institutions, good governance, and an under- prove the efficiency of in- standing of the political economy in which PREM's ternal and external controls clients operate are necessary elements to providing solid that monitor budgetary ex- policy advice and achieving results on the ground. Fol- ecution to contain the mis- lowing are examples of activities in support of this end. In Kenya and Madagascar PREM has implemented use of public resources. pilot leadership and ethics programs focused on In addition to providing direct building effective cabinet teams to further reform and country support (as illustrated improved accountability and service delivery for the in box 1), PREM Anchor staff citizens. This has been done through a series of cabinet retreats for both technical skills and team building. have been actively involved in Analytical and team dialogue support was provided the Africa Capacity Building for Uganda's political economy assessment and follow- Initiative and the committee up discussions in response to a similar steep deteriora- responsible for the World tion of governance. Bank's new capacity building PREM provided high-level support to the Ethiopia strategy for AFR. Working country team in response to an urgent request for a with the regional manage- governance assessment to provide the analytical and ment team, support was also strategic foundations for an Interim Strategy Note in provided on developing a response to the political crisis. strategy for risk mitigation and In Rwanda, cross-support was provided for the PRS on Service Delivery and Decentralization & Territorial effective control of corruption Reform, which included a high-level conference with in the AFR, which included the prime minister and ministers in attendance. methods to identify high-risk On the public expenditure side, a clinic was held for countries, such as corruption a visiting Democratic Republic of Congo delegation on and governance indicators Public Expenditure Tracking/Managing Teachers Top and diagnostics. Ups as part of a Development Policy Loan. Advisory support was also provided to the Gov- AAP Focus: Supporting ernment of Lesotho on Medium-Term Expenditure Frameworks and lead Public Finance Assessments for the Drivers of Growth 18 HIPC G-8 Debt Relief countries' eligibility. GrowthisatthecoreofPREM's workprogram.Itsfocuscontin- institutions and the capacity to efficiently ues to be on providing sound and effectively deliver services. The PREM policy advice to help countries accelerate Anchor is working with the AFR to build and sustain growth through the medium- on efforts that African countries have term, of which supporting the drivers of taken during the past few years and in growth is key. In FY06, the Anchor's focus support of the AAP's goal of building ca- on Africa has been extended substantively pable states and improving governance. and sharpened to reflect the priorities Efforts have largely focused on: set out in the AAP. The topics PREM is 1) Building capacity to strengthen gov- working on include: ernance in client countries; Macroeconomic Implications of Scal- 2) Creating new instruments to better ing Up: PREM Anchor is examining the tailor CASs and operations to political macroeconomic implications of aid flows governance and corruption realities using case studies on Uganda and Tanza- PREMNOTE MARCH 2006 nia, and examining the consequences of Regional Integration: PREM has been sharp increases in aid for infrastructure working closely with the AFR Vice-Presi- development in 12 African countries. dency and the Department for Regional A toolkit that enables users to conduct Integration in preparing a strategy for country-specific analysis is under devel- engagement and supporting dialogue opment. with the EC on Economic Partner- ship Agreements. It is also providing Medium-Term Growth Forecasts: The technical assistance for the Common application of new approaches to bench- Market for Eastern and Southern Africa mark medium-term growth forecasts for (COMESA). all African countries, with the intention of making risk analysis more realistic, is Debt Management: The PREM Anchor under way. Given the vulnerability of Af- has comprehensive knowledge about Af- rican oil exporters and importers, PREM rican debt issues and continues to provide is analyzing the fiscal and oil-wealth cross-support and technical advice on the management implications of the oil price implementation of the HIPC Initiative, shock for Nigeria and other African oil the low-income debt sustainability frame- exporters and importers. work,andadditionaldebtreliefproposals. For example, by the end of FY06, Anchor PREM Anchor is Creating the Export Push: The Anchor is staff will have worked with country teams currently tackling looking at the institutional and economic on debt sustainability analyses for most problems related constraints to export diversification and African IDA countries. Staff also provide to migration, labor competitiveness in Africa. In a related on-going advice on issues related to debt context, it is also studying the kinds of and growth, borrowing strategies that markets, and eco- tertiary skills that are needed to promote prevent a rapid reaccumulation of debt, nomic mobility and higher value exports in Africa. Further- and increasing debt-management capac- their links to poverty more, PREM is providing cross-support ity in African countries (in collaboration in the areas of trade policy, trade facilita- with the AfDB). and growth. tion, and standards and co-task-managing Diagnostic Trade Integration Studies in AAP Focus: Participating in and Rwanda and Niger. This work has largely Sharing Growth focused on countries in the Integrated Framework; however, significant work (Connecting the Poor to Markets--Scaling has also been conducted in Kenya, where Up Human Development) PREM has had a major role in staffing the Making Africa's growth more inclusive missions and participating in the follow- means connecting the poor to markets, up policy dialogue. scaling up human development, and ensuring that both men and women Trade Facilitation: PREM supports the participate in and share the returns from trade facilitation negotiations in Geneva growth. In support of these efforts, the and the capacity building initiatives it has PREM Anchor is currently tackling prob- or will be carrying out for African coun- lems related to migration, labor markets, tries with trust fund support from the and economic mobility and their links to European Community (EC), the United poverty and growth. For example, it has Kingdom, and Sweden. PREM staff are undertaken a joint program with the AFR also highly engaged in the Integrated to improve the quality of informal labor Framework and the broader Aid for Trade diagnostics in the region. In addition, Initiative, which will provide large returns the Moving Out of Poverty Study entailed for the AFR. close collaboration with national policy PREMNOTE MARCH 2006 institutes and country teams to deepen development and gender is under way in PREM's understanding of economic Tanzania and Ghana. PREM is working mobility, using both quantitative and with its colleagues in the AFR to organize qualitative methods. A flagship effort, workshops and training on gender and the Pro-Poor Growth Diagnostic Facility, economics during the coming months. is also under way, which will help support increased donor collaboration and sup- AAP Focus:The Scaling port for country-focused analytical work Up Agenda on the linkages among poverty, equity, and growth in the region. (Strengthening Partnerships at the Country Level) Physically connecting the poor to markets In close collaboration with the Organi- and scaling up human development will sation for Economic Co-operation and require additional investments in infra- Development (OECD)-Development structure, health, and education. PREM Assistance Committee (DAC), PREM is developing analytical tools to assess the has brought together DAC members, fiscal space available for these investments multilateral development banks, the and conducting detailed assessments of PREM has International Monetary Fund (IMF) the main dimensions of the fiscal space and the United Nations Development stepped up efforts problem. Theempiricalpilotsforthiswork Programme (UNDP) to discuss practi- to accelerate will focus on Africa. To ensure that these cal steps to help ensure the effective use progress toward investmentsareusedefficientlyandtohelp and delivery of aid and to support scal- improve the monitoring of sector specific the gender MDG ing up initiatives. The topics this group public expenditures, PREM is conducting is addressing include achieving greater and draw links an assessment of the cost performance of predictability and appropriate flexibility between gender service delivery in which pilots are also of donor financing; strengthening the being carried out in the AFR. and growth. poverty reduction strategy process; and energizing the consultative group and Finally, shared growth cannot be achieved roundtable processes to achieve clar- if more than half of the population is left ity and secure the financing needed for out. To help ensure that both men and country plans to ramp up MDG efforts. women participate in and benefit from Work is under way to strengthen the con- growth, PREM has stepped up efforts to sultative group/roundtable processes at accelerate progress towards the gender the country level to better link resources Millennium Development Goal (MDG) to results at the country level. and draw links between gender and growth. A growth and gender assessment This PREM Note was issued by the PREM VP was recently conducted for Kenya and under the guidance of Danny Leipziger, Vice- work on the links between private sector President and Head of the Network. This note series is intended to summarize good practices and key policy findings on PREM-related topics. The views expressed in the notes are those of the authors and do not necessarily reflect those of the World Bank. PREMnotes are widely distributed to Bank staff and are also available on the PREM Web site (http://prem). If you are interested in writing a PREMnote, email your idea to Madjiguene Seck. For additional copies of this PREMnote please contact the PREM Advisory Service at x87736. This PREMnote was edited and laid out by Grammarians, Inc. Prepared for World Bank staff