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Mozambique’s Initiative to Review the Way Donors Deliver TC

Mozambique’s Initiative to Review the Way Donors Deliver TC. Presentation to LenCD Forum, Nairobi, October 2006, by Alfredo Mazive and Simon Vanden Broeke. Overview. 1. Mozambique’s Public sector 2. TC in Mozambique and the G18 initiative 3. Problems identified Public sector reform issues

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Mozambique’s Initiative to Review the Way Donors Deliver TC

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  1. Mozambique’s Initiative to Review the Way Donors Deliver TC Presentation to LenCD Forum, Nairobi, October 2006, by Alfredo Mazive and Simon Vanden Broeke

  2. Overview • 1. Mozambique’s Public sector • 2. TC in Mozambique and the G18 initiative • 3. Problems identified • Public sector reform issues • Donor modalities for delivering TC • Government capacity to manage TC services • 4. Gov./G18 guidelines on TC and PAF target • 5. Next steps

  3. 1. Mozambique’s Public Sector • About 150,000 (relatively small relative to population but a relatively high percentage of 7.5% GDP spent on the wage bill) • 58% have 6 yrs or less education; only 6% with university education, concentrated in capital (eg. only 3% of 712 public doctors in rural areas) • Lack of frontline workers, suitably trained staff, weak performance and career mngt, weak and neglected HR departments, pay and incentives,…. • Problems associated with donor poaching, ad hoc salary top ups, donor-related transaction costs

  4. 2. TC in Mozambique and the G18 Initiative • TC on average $210m = half the public sector wage bill and a fifth of ODA! • Dissatisfaction with the impact of this spend led JSC/G18 to set up a subgroup and commission a study

  5. 3. Problems Identified • Issues around Public Sector Reform, which the PSR working group was asked to take forward. • Problems related to donor modalities for delivering TC services, which led Government and the G18 to develop guidelines and set a target on ‘sector-wide TC’. • Limited Government capacity to manage TC

  6. A. Public Sector Reform Agenda • Pay and Incentives • Functional analysis of Ministries • Deconcentration and decentralization • Patrimonial and Financial Reform of the State • Improvement of quality of services to the citizen (quick Wins) • Managing Change (Change management network of 1500 trained civil servants) • Anti-corruption strategy; Mixed Results

  7. B. Problems related to donor modalities for delivering TC services: • Limited ownership and Government involvement in financing decisions • Coordination and planning failures. Coordination responsibility shifted to Government who doesn’t have the tools as planning and resource allocation decisions are taken in individual donor offices • Failure to appraise and assess TC with the same strategic results-based disciplines as other types of finance • Weak and dispersed accountability, directed to donors • Lack of integration in core planning, budgeting, and monitoring instruments • Imbalances in the level of TC within and across sectors, across levels of government • Heavy transaction costs arising from multiple parallel planning, financing, and reporting systems • Short-term planning horizons at the expense of LT capacity development Problems originate from the fact that whereas other types of aid have evolved to SWAps and budget support, TC has remained largely donor-driven and projectised

  8. C. Government Management of TC • Ideally, TC should be long term and with a strong role for Government’s HR department to appraise TC needs • However, capacity to appraise, procure, and manage TC is limited

  9. 4. Gov/G18 guidelines on TC modalities and agreed PAF target • Objectives: • Increase ownership by putting Government firmly in the driver seat regarding financing decisions on TC • Strategic appraisal, planning, and monitoring of TC • Ensuring opportunity costs of TC starts to be taken into account • How?: moving incrementally from donor-driven projectised TC towards sector-wide approaches

  10. The draft guidelines for sector working groups: • Integrate TC in sector plans and budgets, ensuring a single financing source can be used to prioritise TC among other activities • Where as sector has no SWAp, incrementally pool TC in a sector-wide TC programme • Government contracts TC services • Donors focus on results and financing needs, and support Gov with prioritisation and specification of TC needs, and strenghtening generic functions (management, procurement, HR,..) to ensure that Gov can assume effective leadership • The agreed target: 20% of TC to be ‘sector-wide TC’ by 2009

  11. 5. Next steps • No ‘big plan’ but Gov/G18 HoCs steer to sector working groups to adopt guidelines and move incrementally to new approach • The sector-wide TC target, as part of the G18 donor performance matrix, will be yearly assessed and yearly revised. Possibility to include in ToRs of next performance review a focus on the state of TC in a few big sectors.

  12. This will not work always and everywhere and there’s no need to aim for 100% ‘sector-wide TC’… …but currently only about 10% of TC can be considered sector-wide (within G18) and the current situation in Mozambique is unacceptable… …as one Gov official put it, “It’s a mess and it’s costing us a lot of money!”

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