Implementing GAC in Africa: Approach, Progress and Challenges

AFRVP Report to the GAC Council

October 22, 2008

Africa RegionOffice of the Vice

President

Office of the Vice President

Africa Region

AFR Philosophy on Governance We believe good governance is the critical issue for

development effectiveness in our countries. We recognize that this is a long term goal that requires:

regional and national leadership that is accountable; state institutions capable of providing public goods

and services, including regulatory policies that support private sector and non-profit initiatives;

Enabling mechanisms for citizen participation. Our approach targets these dimensions, developing key

partnerships while holding ourselves accountable for progress.

Office of the Vice President

Africa Region

The Starting Point We recognize the challenge of engagement, of assessment, of

implementation, of scaling up and sustaining efforts.

We intensified our dialogue with Africa’s leaders and partner institutions (e.g: NEPAD, AU, AfDB, RECs).

We are engaged in areas of our competence where we have had positive impact - PFM, procurement, and decentralized service delivery.

We are using multiple indices of governance and transparency (e.g., CPIA, Doing Business, etc) to assess progress in key dimensions.

We are undertaking innovative ESW (on political economy,corporate governance, parliamentary capacity, etc) to open up additional entry points.

We remain alert to opportunities, not fully anticipated in the GAC (as in Mauritania, Zimbabwe for example), to advance the agenda.

Office of the Vice President

Africa Region

Progress on Implementation (1) Regional: MOU with African Union (Sept. 2008) defines Bank

collaboration on governance (supported by an IDF grant). National: we rolled out 9 country pilots embedding GAC features in

the design of operations and CASs . Bank policies provide the space to engaged creatively in pressing governance issues in countries such as Chad,Mauritania, Sudan, Zimbabwe.

Sectoral: We have initiated a value chain approach to extractive

industries in partnership with IFC’s oil and gas division. We have engaged Cote D’Ivoire on governance of the cocoa

sector, the DRC on mining & forestry sectors, Ethiopia on corruption in construction, and Kenya on corruption in the judiciary and roads subsector.

We have initiated preparation of a justice sector strategy planned for FY10 and GAC-integration in regionwide sector strategies, starting with the HD sector in FY09.

Office of the Vice President

Africa Region

Progress on Implementation (2) Projects:

In key countries, we are mainstreaming a risk-based approach to project management, including the management of governance and corruption risks.

We are engaging INT in upstream consultation and as a partner in “red flag” awareness clinics for TTLs.

Increasingly, our projects feature greater focus on stakeholder engagement and transparency, applying lessons from the Kenya DIR on third party monitoring and accountability for Bank-financed projects.

We are strengthening field-based task management and fiduciary support to improve project implementation.

Learning and Knowledge Sharing:

We held a GAC learning event in Johannesburg, June 2008.

We have shared our experience on dealing with corruption in infrastructure projects at various Bank-wide learning events.

Office of the Vice President

Africa Region

Challenges and Constraints

The Urgent vs. The Important

• AFR faces a difficult challenge in balancing urgent responses to crises with sustaining the long term effort to build institutions and capabilities.

Deepening Ownership of GAC• Many managers are unfamiliar or not on-board with GAC agenda.• Some view issues in narrow fiduciary terms, others see GAC as a passing fad.• A major push is needed to raise awareness of GAC as central to development effectiveness.

Shortage of Core GAC Skills

• GAC skills are critical to implementation but are in short supply.• GAC implementation will be uneven if attempted across a large group of countries – choice is to limit countries/ sectors until skill gap is addressed.

Supporting Fragile States

• Post-conflict governance issues require specific expertise, ideally in-country.• Establishing basic state capacity requires experienced staff but we need to share such staff across countries.

Office of the Vice President

Africa Region

Priorities for FY09Re-inforce AFR GAC Commitment and Managerial Accountabilities

• RMT awareness training on GAC.• Clarify RMT accountability for GAC implementation.• AFR GAC Council focus on integrating GAC in sector strategies and projects.•Fully mainstream GAC in project.

Invest in Knowledge

• GAC sub-regional clinics for CGAC country teams.• Program to share good practice and strengthen GAC skills of AFR staff.• Learn how to integrate political economy analysis in ESW/operations.

Strategic Staffing

• Establish decentralized fragile states governance cluster in AFR.• Attract lead/senior governance specialists to AFR.• Locate Lead/Senior Specialists as field-based cluster leaders.

Deepen Partnerships

• African Union: Implement MOU. • DFID-Netherlands: Implement GPF Funded Governance Activities.• African Media Initiative: Support implementation of 4 point agenda.

Annex Material:Selected Details on Progress and Challenges in GAC Implementation in Africa

AFRVP Report to the GAC Council

October 22, 2008

Office of the Vice President

Africa Region

In FY08, GAC funded 3 sets of activities 9 CGACs

GAC in sectors/projects

NRM

Burkina Faso, Burundi, Cameroon,

DRC, Ethiopia, Kenya, Mali,

Swaziland, Zambia

PSD, PFM, Water,

Urban, etc.EITI ++

Political economy

Office of the Vice President

Africa Region

CGAC pilots: an upstream entry point for the GAC approach

Among 9 CGAC pilots, success factors have included:

Strong CMU leadership

Multisectoral GAC platform

Core GAC skills in country team

DRC CGAC: Support to “Governance Compact” of govt. has helped define a CAS roadmap for governance reforms in key sectors.

Burundi CGAC: Political economy analysis and civil society consultations have shaped CAS design and risk mitigation strategy.

Zambia CGAC: Upstream political-economy analysis applied to key sectors has helped CAS focus on incremental, politically viable reforms

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Office of the Vice President

Africa Region

CGAC pilots: the way aheadFY08, some successes, as noted but also

Some pilots failed to launch, reflecting skills shortage, inadequate support and coordinationOthers, such as Ethiopia, were selective and focused analysis on specific sectors and were able to engage government in dialogue on follow up actions

Lesson learned: starting with 9 pilots needed to be supported by rapid enhancement of GAC skills. Active technical coordination needed to monitor progress Excessive reliance on bottom up processes Need for AFR GAC Council engagement to provide top-down guidance

FY09, deepening and catalyzing changeMaintain focus on same set of countries Invest in learning and sharing events to build knowledgeUse CAS as spearhead for progressively mainstreaming GAC in the region, together with sector and project level innovation

Office of the Vice President

Africa Region

GAC in Extractive Industries – A Sector ExampleEstablished a common value chain framework for coordinated (with IFC) Bank-group support to countries

Undertook scoping missions to countries to identify key areas to focus

Initiating background work on political economy to improve design of institutions/ policies for extractive industries

Set up an External Advisory Group to advise on approach

Achieved in FY08:

Political economy of natural resource management piloted in 5 countries (DRC, Ghana, Guinea, Mauritania and Nigeria)

Supporting RoC and Equatorial Guinea in EITI implementation Key inputs to CAS is operations/sector-specific activities

Next steps:

Enhancing Bank focus on Public Investment Management in PERs

Supporting design of EITI++ framework and implementation

Office of the Vice President

Africa Region

GAC in Sectors – Other Examples c’ed Analysis of corruption in the construction sector

influenced Ethiopian government to join the Construction sector Transparency (CoST) Initiative

Use of political economy analysis to understand decision-making in sectors, e.g. infrastructure and telecom sectors in Zambia, Nigeria power project

Development of Justice Sector Strategy for the Region (by early FY10)

Forthcoming HD strategy on health systems

Office of the Vice President

Africa Region

GAC in PSD in FY08

Dissemination and strengthening of Corporate Governance in State-owned Enterprises – in Burkina Faso, DRC, Kenya, Mali, Mauritania, Nigeria.

Governance-oriented ICAs: identify the impact of corruption on the private sector through developing and roll out of a customized survey instrument to be used as part of Investment Climate Assessments – pilot started in FY08

Office of the Vice President

Africa Region

GAC in Projects Since July 2008, AFR has adopted a new framework for management of

investment lending (MRIL) and Country/Sector/ Operational risks to development effectiveness and Bank reputation.

Lessons learned from Kenya DIR review led to a number of new initiatives to strengthen fiduciary risk management in projects, including but not limited to: piloting the mainstreaming Institutional Risk Management Policy Framework

(IRMPF) at portfolio-level. This framework would provide effective internal controls, strengthened Audit Committees, enhanced corruption and fraud prevention structures, among other things.

strong partnership with INT to facilitate smart project design. This includes upstream consultation during project preparation, and awareness clinics for TTLs for projects under supervision.

We have initiated a dialogue on the use of country procurement systems in Ghana, Rwanda, Senegal and Tanzania as part of a Bankwide pilot.

Office of the Vice President

Africa Region

Media/Demand-side Interventions Media: Support dialogue on Freedom of Information laws and ongoing

efforts by regional and international organizations to strengthen Africa’s media industry so that they can enrich public debate on development goals in Africa. AFR will also support implementation of the four point agenda (policy, training, infrastructure, and research) reflecting extensive research funded by a consortium of donors under the framework of the African Media Initiative.

Third Party Monitoring: A greater focus on stakeholder involvement that can “crowd in” more stakeholders to ensure that public resources are efficiently and effectively used for the purposes intended, e.g. Madagascar, Tanzania, Kenya, Sierra Leone public sector projects.

Support for Parliament: Going beyond traditional Bank support to strengthening Public Accounts, Investment, and Finance Committees, to a broader analysis that highlights options for engaging and/or providing assistance for capacity building to African legislatures.

Office of the Vice President

Africa Region

Learning from GAC Workshop, Jo’burg, June 2008The Workshop concluded that:

Long term engagement is necessary to yield results on GACSmart project design should be scaled upHuman resources are key constraint and should be a regional priorityPeer learning should complement strategic staffing

Clear Take-away message

Learning needs to be scaled up – including opportunities for peer learning within the region and with other regions

GAC workshops planned in FY09 as part of regional Learning plan Sector governance will be a key issue in forthcoming senior policy

conference with the AU on infrastructure (January 2009)

Office of the Vice President

Africa Region

AFR GAC Learning in FY09

GAC sub-regional clinics for selected CGAC countries – key entry point to ensure GAC approach reflected in CAS portfolio choices and project design and implementation

Program to train trainers in country teams

Program to strengthen GAC skills of AFR staff

Dynamic learning program on NRM/EITI++ issues

Disseminate good practice in design and application of political economy analysis

Learning from risk management