Ratification of the International Agreement of the

Collaborative Africa Budget Reform Initiative (CABRI)

Presentation to Select Committee on FinanceTuesday 26 February 2008

Lesley Fisher

Content

• History and objectives• Countries participating in CABRI• Regional and International Collaboration• Objectives of the legal status• International agreement• Hosting agreement• Recommendations

History and objectives

– Professional network of senior budget officials (SBO) in ministries of finance and planning from across Africa.

– Formed by South Africa, Mozambique and Uganda in 2004.

– Unique African-owned and led– Key objectives of CABRI

• Develop approaches, procedures and practices for managing of public finance systems

• Peer learning, training and research in PFM• Common voice in international debates

Regional and International collaboration

• Identified by the G8 as a key vehicle for implementation for Good Financial Governance Action Plan in Africa

• G20, National Treasury and CABRI co-hosted African Policy Seminar on fiscal elements of growth and development

• Joint CABRI and World Bank Institute training programme on budget management and public financial accountability.

• Conducting CABRI and OECD Budget practices and procedures survey in Africa.

• CABRI and the Strategic Partnership with Africa (SPA) commissioned a study on “putting aid on budget” in ten African countries.

Countries participating in CABRI

Objectives of Legal Status

• Draft memorandum of understanding forms the basis of existing structure of the informal network

• Enables financial and legal independence from any national government and other regional bodies

• Supports funding arrangements - membership fees, donor funding, etc.

• Enables formal engagement and cooperation with regional and international bodies

Key elements of CABRI’s international agreement

• Establishment, autonomy and legal status• Objectives and functions of CABRI• Membership• Seat of the Secretariat• Roles and functions of the 3 organs of

CABRI• Official languages• Finances and accounts• Rules and procedures

International Agreement

• 6 founding members: Ghana, Kenya, Mali, Rwanda, Senegal and South Africa

• CABRI will be launched as an international organisation during the Annual Meetings of the AfDB in May 2008.

• New members will join through accession

• Membership also entails paying membership fees, based on a three tier nominal fee structure

Membership Fees (1)Category 1: Category 2: Category 3:

> 10bn US$ > 5bn < 10bn US$ < 5bn US$

Member States

GDP1 GDP GDP

US$ bn Member States US$ bn Member States US$ bn

South Africa 241.93 Uganda 8.73 Zimbabwe 4.55

Nigeria 98.56 Senegal 8.62 Guinea 3.33

Egypt 89.79 Zambia 7.27 Swaziland 2.61

Angola 30.63 Mozambique 6.64 Rwanda 2.15

Kenya 18.73 Mauritius 6.21 Malawi 2.08

Cameroon 16.88 Namibia 6.06 Lesotho 1.49

Tanzania 12.61 Congo Republic 5.98 Sierra Leone 1.22

Ethiopia 11.37 Burkina Faso 5.62 Burundi 0.8

Ghana 10.72 Mali 5.41 Liberia 0.53

Botswana 10.2 Madagascar 5.03 Guinea-Bissau 0.3

Membership Fees (2)

• Proposed levels of membership fees for the 3 categories:– Category 1: $50,000– Category 2: $25,000– Category 3: $15,000

• 29 member countries would contribute 850.000 US$, which represents 63.90% of CABRI’s budget for FY2007/08.

South African process• International agreement signed by

Minister of Finance on 7 August 2007• Cabinet approval on 24 October 2007• Ratification in terms of section 231 of

constitution• Financial contribution effective in

2009/10.

• Legal status finalised– March to April 2008

Hosting Agreement• South Africa will permanently host the CABRI

Secretariat.• Standard agreement concluded in consultation

with DFA, SARS, DHA.• Agreement concluded as soon as reasonable

between CABRI and Government of South Africa after CABRI is legally established with clear stipulations on privileges, immunities, immigration, tax exemptions, disputes, amendments and inviolability of office.

Recommendations

• Recommended that Parliament – ratifies CABRI agreement in terms of

section 231 in three official languages– notes South Africa’s commitment to host

CABRI subject to agreement of the hosting agreement

– notes the annual financial contribution payable by South Africa

THANK YOU