PAM: Selected Strategic Issues ARTF Quarterly Meeting, April 5, 2009 Yoichiro Ishihara World Bank

1. Background Performance Assessment Matrix (PAM) was produced in response to the 1st ARTF recommendation and demands from donors; PAM is a Result Framework for the ARTF and aims to provide a broad- based assessment of the effectiveness of the central government; PAM provides a platform for dialogue based on retrospective performance; PAM complements the ARTF incentive mechanism, which secures forward-looking policy and reform progress; PAM covers five themes/sectors: (i) public financial management (PFM); (ii) aid effectiveness; (iii) education; (iv) health and (v) public administration reforms (PAR); PAM was presented at ARTF Quarterly Meeting in March 2008; 2

2. PFM Revenue and fiscal sustainability: Domestic revenues reached Af 41.6 billion (US$832m), met the target and up by 24%. But the fiscal sustainability indicator fell from 66% in SY1386 to 59% in SY1387; Core development expenditure execution: Fell by 4% in absolute values; Procurement: Slow progress- Only 2 ministries out of 6 key spending ministries prepared procurement monitoring schedule; Control framework: Progress but challenge remains- As of SY1387, 135k (about 30% of total) received salaries directly through bank accounts. Further improvement requires banking facilities in provinces; Program budgeting: The number of pilot ministries increased from 7 in SY1387 to 14 in SY1388. Not only quantity but also quality of program budgeting should be improved (e.g. simplification of program budgeting); ARTF eligibility ratio (non-salary): O&M eligiblity has declined: ratio fell from 73% in SY1384 to 62% in SY1386. 3

3. Aid Effectiveness and PAR Ownership related indicators deteriorate or stagnant % of ARTF un-preferenced paid-in has declined from 70% in SY1385 to 51% in SY1387; Absolute volume of un-preferenced has also declined over last two year from US$381million in SY1386 to US$275 million in SY1388 (scheduled); Discretionary resources as % of total core development budget was almost zero in SY1387 compared with 20% in SY1386; Direct budget support as % of total ODA through core budget remains almost same at 21% in SY1386 (per Paris Declaration Survey) Predictability of ARTF funding % of ARTF RC need pledged at start of FY improved; % of ARTF pledges deposited by donors by end of FY improved; Pay and Grading: % of positions regraded is scheduled to increase from 10% in SY1387 to 60% in SY1388 and 100% in SY1389. 4

4. Education and Health Education: Quantity: Gross enrollment rates is likely to exceed 100% in SY1387; % of female teachers has been stable at around 30% in last three years; Quality: Teacher registration almost completed by MoE; competency framework for pre-service teacher training being piloted; Health BPHS: BPHS contracted districts reached 87% (in terms of population coverage); a balanced score card improved from 70% in 2007 to 72% in 2008; Quality of secondary/tertiary hospitals: % of provinces initiated hospital reform process increased from 50% (17 provinces) to 60% (20 provinces); a balance score card improved from 57% in 2007 to 66% in 2008; 5