Mozambique: Is the PRSP Process Effective?

1. Mozambique: Is the PRSP Process Effective? National Directorate of the Budget & Cabinet of Studies Ministry of Finance

2. Structure of the Presentation • Background • Policy Formulation • Actors – Ownership, Political Leadership, Accountability and Capacity • Lessons Learned and Best Practices of PRSP II • Conclusions

3. I. Background Priorities defined in the Government Program • Balance economic and social development • Reduce absolute poverty; • Consolidate peace, national Unity and democracy • Apply he rule of law in all areas • Improve education and health services • Strenghen International Cooperation

4. PROGRAMA QUINQUENAL DO GOVERNO PROGRAMA QUINQUENAL DO GOVERNO QUINQUENAL PROGRAM OF THE GOVERNMENT PROGRAMA QUINQUENAL DO GOVERNO PROGRAMAÇÃO DE MÉDIO PRAZO PROGRAMMING OF MEDIUM PERIOD PLANOS OPERACIONAIS ANUAIS ANNUAL OPERATIONAL PLANS Integration Of Goalss Plano de Acção para a Redução Plan of Action for Reduction of the Absolute Poverty Marks da Pobreza Absoluta PLANO ECONÓMICO E SOCIAL ECONOMIC AND SOCIAL PLAN + + (PARPA) (PRSP) (PES) (ESA) Coordination in The Monitory process Afectação Priority Harmonization of the it Politicizes Harmonização da política prioritária de Affectation of e estratégia sectorial And Sectorial Strategyl recursos resources Planos Estratégicos Sectoriais Strategic Plans Sectorials Integration of Objectives and Sectorial targets e Provinciais And Provinces Consistência da orçamentação Consistência da orçamentação com acções e com acções e Integration of the it Integração da política Framing of The Resources and Enquadramento dos recursos objectivos de política objectivos de política e estratégia sectorial Politicizes and Strategy Sectorial e afectação inter Affectation Interr - - sectorial sectorial Cenário macro e Cenário macro e sectorial sectorial Medium Term Framework Expenditure Cenário Fiscal de Médio Prazo Ceillings Expenditure BUDGET STATE (CFMP (MTFE) ) (OE) (BS) I. Background: Instruments of Planning (Linkages) BUDGET STATE

5. II. Policy Formulation PQG, PARPA II, CFMP, PES e OE Appointment Book 2025 • To Create a national vision of long period; • To Prepare a National Strategy of Development;

6. II. Policy Formulation PQG, PARPA II, CFMP, PES e OE Government Program (five years) • Guides government action during the tenure period (2005-2009); • Was formulated in coordination with several line ministries; • Reflects the main ambitions of Country.

7. II. Policy Formulation PARPA II Three aspects became PARPA the effective process: (1) Instrument of Operacionalization; (2) Strategic Instrument; (3) Paternship development instrument;

8. II. Policy Formulation PARPA II PARPA II 2006-2009: - Links specific priorities and resource allocation - Coordination across sector policies; - Defines specific targets - Outlines a vision about medium-term priorities - Accepted by cooperating partners (donors) as a basis for budget support and concessional finance - Likely to “survive” political changes Methodology of PARPA II: Protagonists: Government institutions; civil society and donors

9. II. Policy Formulation Methodology of PARPA II

10. II. Policy Formulation Stages of preparation of PARPA: • Stage I: Elaboration of PARPA II: • 3nd Poverty Observatory • Pillars: Governing, Human Capital and Economic Development (ii) Stage II: Work Groups: • Preparation of documents (Operational Matrix and Strategic Matrizes) • Elaboration of preliminar version of PARPA II

11. II. Policy Formulation PARPA II versus MTEF • CFMP: Medium Term Strategic Document • Linkage between CFMP and PARPA II: Pillars • Assumptions: GDP growth, inflation rate and exchange rate; • Resources allocated through the CFMP reflect the actions and activities defined in PARPA II

12. II. Policy Formulation PARPA versus PES and OE • PES and OEare annual slices of the PARPA • Methodology of PES and OE: • Ceilings are provided to spending units at the 31st of May • Spending units (ministries, provincial directorates) submit their proposals to MF e MPD until 31 of July • Analysis and aggregation of proposals by MPD and MF – August • Proposals of PES and OE to Economic Council: 15 of September • Proposals of PES and OE to Economic Council: 19 of September • Proposals of PES and OE to Parliamento: 30 of September

13. II. Policy Formulation Translating Political Priorities into Sound Policy Proposals • Define general and specifics objectives; • Delineate effective and realistic strategies • Define temporal horizon and areas which are key to the objective to reduce poverty from 54% in 2003 to less of 45% in 2010 • Stakeholders: Government, Civil Society and advice by Donors; • Results can be monitored and measured • Prepared within the expected resources envelope (not a wish list, not the tabulation of needs)

14. II. Policy Formulation Challenges Found in Preparation of Solid Proposals on Formulation Policy • Available financial resources • Duplication of activities • Multiplicity of planning instruments

15. II. Policy Formulation Evaluation Phase, Policy Adjustments and the Role of Donors • Commitments of Government are monitored through the PES implementation report (“Balanço do PES”), • Integration of indicators of the Performance Assessment Framework (PAF) in other planning instruments like the PES improved. • Responsible for monitoring: Ministry of Planning and Development - MPD • Audit of Resources Use : General Inspectorate of Finance and Audit Court

16. II. Policy Formulation Evaluation Phase, Policy Adjustments and the Role of Donors • PES Implementation Report • Identify the weaknesses of inter-sectorial approach • Provide responses in terms of descentralisation of and participation in monitoring • Results and changes communicated to actors within the same proces • Role of the Donors: degree and volume of funds affect the objectives and the results that can be achieved

17. II. Policy Formulation Evaluation Phase, Policy Adjustments and the Role of Donors Five Fundamentals Principles: • Integration • Indicators of Outcomes versus indicators of Output • Combination of monitoring of quantitative and qualitative aspects • Monitoring of PARPA • Participative Approach

18. II. Policy Formulation Efficacy of Instruments of Planning versus Governance • Traditional Model of Decision Making Preparation of Calendar (Goals of long, medium and short run) Research, Discussion and Presentation of Proposals Study/ Ponderousneoss of Costs and Benefits of each proposal Decision Making Implementation of Action Plan Evaluation

19. III. Actors - Ownership, Political Leadership, Accountability and Capacity • Perspectives and Interest: Government, Civil Society and Donors: Harmonisation • Assembly of the Republic: Substance Legislate require Ministries Accountability; • Council of Ministers: Design and follow-up strategies

20. III. Actors- Ownership, Political Leadership, Accountability and Capacity • Line Ministries: rational use of public resource and execution in 100% of programs activities; • Distrits: Identify potentials for acceleration of economic growth • Civil Society : advise the Government in the process of defining public policies • Donors: Assume realistic commitment and disburse according to agreed schedules.

21. IV. Lessons Learned and Best Practices of PARPA POSITIVE FACTORS • Both PARPA I e PARPA II were quite participative processes. • Defining strategies together with those who benefit from them and who who live the reality improves policy design. • Positive Results so far: Poverty fell from 69.4% to 54,1% between 1996/7 and 2002/3; • Expansion of basic public services in priority areas

22. IV. Lessons Learned and Best Practices of PARPA Negative Factors • Monitoring instruments still need to be improved considerably (PES/BdPES); • Impact assessments of policy changes (PSIAs) has not been applied enough so far. • Alignment of decentralisation process with requirements for participation: Poverty Observatories at national and provincial level

23. Conclusion 1. PARPA II is well aligned with the other instruments, and adds value through: • Emphasis on complementarities; • Long-term vision; • More specific on objectives and targets than other instruments 2. Participation has led to country ownership: • Likely to survive changes of government and ministers, • Accepted by donors as business basis. 3. Weaknesses: • Objectives and targets were not really costed • Objectives sometimes formulated too vaguely to cost them. 4. Absence of regional Dimension: • Average, national targets are not broken down by province • No minimum coverage per district defined

24. Thank You