“Mutual Review of Development Effectiveness” in the context of NEPAD OECD Presentation Aid flows and quality (chapters 5 and 6) Policy coherence (chapter 7) ECA Conference of African Ministers of Finance, Planning and Economic Development Abuja, Nigeria, 11 – 13 May 2005

Aid flows and aid quality Scaling up of aid –Implies changing the aid business model: aid effectiveness agenda –From “donorship” -- to ownership by African countries –Generating systemic capacities and accountabilities: no capacity without predictability –Predictability becomes central –A new African aid architecture needed

Aid flows and aid quality (cont) Scaling up of aid: current state of play Monterrey/G8 commitments Current estimates of aid requirements –UN MDG Report –Africa Commission –World Bank Global Monitoring Report

Chart 11. DAC Members’ ODA: and simulations to 2006 and 2010, based on commitments at Monterrey and since

Aid flows and aid quality (cont) Scaling up of aid: comparing current commitments with new aid scenarios –Monterrey/G8 commitments imply $15 billion increase for Africa by 2010 over 2003 (latest announcements will increase this estimate) –MDG Project envisages ODA/GNI ratio of 0.46% in 2010 as compared with DAC simulation of 0.32% –Commission for Africa and World Bank propose $25 billion increase for 2010 over 2003 level of around $23 billion

Current evolution of aid to Africa: ODA back to early 1990s levels (See Annex I for additional charts) Note: Data on emergency aid are available only as from Chart 1. Total net official development assistance (ODA), non-aid official flows and private flows in Africa,

Aid flows “Action Frontiers” and 2007 “Performance Benchmarks” Managing the scaling up of aid – for Africa –Construct overall development finance scenarios with post-aid dependence vision –Policies for domestic resource mobilisation, including financial sector development and tax systems –Proactive approach to aid composition and leadership of aid management processes –MTEF frameworks operative and effective/accountable public expenditure management

Aid flows: “Action Frontiers” and 2007 “Performance Benchmarks” Managing the scaling up of aid: for OECD –Commit to new ODA scenarios for Africa (Gleneagles G8 summit, UN Millennium +5 summit) –Provide for high degree of predictability and active forward planning (forward tracking, multi-year discussions with partners, aid flows reported on national budgets) –Strengthen aid modalities for fragile states, regional integration and infrastructure –Definitive resolution of multilateral debt issue and associated new loans/grant policies

Aid quality: “Action Frontiers” and 2007 “Performance Benchmarks” Remarkable progress in countries where strong African ownership/leadership (Mozambique, Tanzania, Uganda, Ghana, Ethiopia, Burkina Faso) Paris Declaration: joint commitments and measurable targets for ownership, alignment, harmonisation and results-based management (Annex II of Mutual Review Report)

Coherence across the range of OECD and African public policies Requires government-wide approaches to policy formulation, underpinned by integrative institutional structures/processes Systematic promotion of mutually reinforcing policy actions across government departments and agencies, regional groupings and international institutions

Policy coherence: “Action Frontiers” and 2007 “Performance Benchmarks” For Africa Build capacities to –Participate effectively in international debates (African voice) –Generate initiatives across sectors, disciplines, regions, countries c.f. NEPAD’s agriculture strategy Streamline and rationalise regional institutions and mandates into a coherent, strategic and interactive system. Concerted effort to reduce corruption

Policy coherence: “Action Frontiers” and 2007 “Performance Benchmarks” For OECD Aid, trade and debt policies consistent with growth/MDG attainment and viable longer- term financial development scenarios Improve OECD institutional mechanisms for policy coherence Facilitate “African voice” Coherent government-wide support for African conflict resolution and peace- building capacities

Policy coherence: “Action Frontiers” and 2007 “Performance Benchmarks” For OECD Strong Doha Round outcome facilitating the “Three Pillars”: improved market access, elimination of export subsidies and reduction of domestic support Trade capacity building, including for trade facilitation and standards Research, human and financial resources to address African health challenges Enforcing anti-corruption instruments and facilitating recovery of stolen assets