In the opening session, chaired by Soumana Sakho, President of the African Capacity Building Foundation, IMF Institute Deputy Director Saleh Nsouli and Cheickh Soumaré, Minister Delegate in charge of the budget in Senegal, outlined the main issues in implementing poverty reduction strategies. Sakho emphasized the crucial role of capacity building in the design and implementation of such strategies. Nsouli, speaking on behalf of the organizing institutions, underscored the challenges of poverty, the key steps that characterize effective development strategies, and the main themes of the forum. Soumaré, as host, welcomed participants to Senegal and provided a telling account of the efforts that Senegal—one of the first countries to prepare an interim PRSP—has made to accelerate economic growth and reduce poverty.
In introducing President Abdoulaye Wade of Senegal to the forum, Nsouli noted that Wade had originated the Omega Economic Plan for Africa. That plan has now been integrated into the New African Initiative, which African heads of state adopted earlier this year. The New African Initiative (see box, page 317) is firmly anchored in the fundamental principles of African ownership, leadership, and accountability to eliminate homegrown obstacles to sustained growth, Wade said. The initiative recognizes the PRSP process as a core vehicle for integrating continent-wide priorities into national poverty reduction programs and for coordinating international support.
Ownership and accountability
Delegations provided evidence of a strong sense of ownership of the PRSP process in their countries. Broad participation has become part of the strategy setting. Participants also saw improving governance as an essential step in the effective design and implementation of poverty reduction strategies. And there was broad agreement on the need for mechanisms to provide accountability and on the importance of delineating the functions of the executive, legislative, and judicial branches.
The media also have a crucial role to play, participants agreed, in disseminating information and facilitating genuine debate—provided that national conditions permitted access to information and freedom of expression. Although the role of parliaments varied widely across countries, discussants recognized that parliamentary committees responsible for poverty reduction and finance must be kept well informed to strengthen their work and to increase their technical capacity. Local governments, which are closest to grassroots communities, need to be engaged in the design, implementation, and monitoring of strategies. Civil society groups, nongovernmental organizations, and local research institutes favorably viewed their own involvement in the process, noting that they can play a vital role in holding governments and elected officials accountable at the local and national levels.
Participants shared the view that pro-poor growth was a key ingredient in reducing poverty over time and required sound fiscal, monetary, and exchange rate policies, along with structural reform. The sessions on pro-poor policies focused on three key sectors for poverty reduction: education, health, and infrastructure. Discussants emphasized that education and health care services often failed to reach the poor and that efficiency, rather than spending, had to increase. In this respect, officials needed a better understanding of the impact and efficiency of education and health care expenditures in reducing poverty. Poverty reduction would also require improved infrastructure services in energy, telecommunications, transportation, and water and sanitation. And it will also be critical for governments to achieve a better balance between urban and rural infrastructure spending, as well as greater involvement of local governments in decision making.
In addition, participants considered it essential to take into account the regional dimensions of growth and poverty to increase the effectiveness of domestic policies. Reflecting President Wade’s call for a New African Initiative, participants pointed to the creation of an African regional market, the adoption of common policies to improve institutional and human capacities, the coordination of economic policies, and the buildup of infrastructure as some areas for cooperation.
Country delegations reported substantial, albeit difficult, progress in establishing systems and building the capacity to analyze and monitor the impact of poverty reduction strategies, particularly with regard to gender and governance. Successful monitoring systems, they said, should have the ability to quickly produce information on actions taken and on progress on key lead indicators of poverty reduction. Traditional poverty monitoring, dependent upon household surveys and participatory assessments, produced good data on impacts, but with a time lag and without immediate policy relevance. In addition, participants underscored the importance of integrating data collection on poverty and analysis—particularly the social impact analysis of macroeconomic and structural reforms—in the PRSP process.
Changing role of development partners
Nationally owned and broadly endorsed poverty reduction strategies provide an opportunity to change the culture and practice of development assistance in Africa. Participants acknowledged that once consensus was reached on national priorities and performance targets, donor practices would have to shift to empower governments to take action. Country delegations insisted that donors harmonize their policies and procedures and make them more transparent. But they also recognized that the countries themselves needed to articulate their policies more clearly, take the lead on donor coordination, and hold themselves accountable for use of resources and for achieving their strategy goals.
Within discussions of these broad issues, several subthemes emerged. Participants believed conditionality should be made less intrusive and more focused on outcomes than on policy intentions. They also stressed the need for greater predictability in medium-term financing plans and commitments. For their part, donors indicated that they are moving to shift from project to sector assistance. But to do so, they stressed, clear political commitment and domestic accountability mechanisms must be in place, particularly with respect to public expenditure management.
Issues of capacity building and utilization proved to be a recurring theme throughout the proceedings. Participants viewed a country’s capacity to develop its own strategies and implement its own policies as central to the success of poverty reduction strategies. A lack of capacity and an inability to use existing capacity effectively remain important constraints. But several countries insisted that the remedy for these constraints lies in building their own capacity over time rather than in relying on conventional technical assistance.
Ultimately, the forum helped participating countries and donors share experiences and move toward a common understanding of what has been achieved and what challenges remain. Candor, openness, and constructiveness characterized the discussions. At closing, several PRSP country groups took the initiative to set up a system of electronic exchange of documents and ideas to sustain the “spirit of Dakar”
New African Initiative
The New African Initiative focuses on putting in place the preconditions for promoting investment, growth, and reduced poverty in Africa through a regional coordinated effort. In a September 11 meeting with IMF Institute Deputy Director Saleh Nsouli, President Abdoulaye Wade of Senegal detailed the ongoing work on the initiative. Wade explained that the initiative recognizes the importance of peace, democracy, and good governance and seeks to develop regional infrastructure, enhance human capital formation through education, and improve health care. It also focuses on accelerating growth in the agricultural sector, which is the mainstay of many African economies.
The initiative envisions a key role for the private sector and seeks to promote regional integration, Wade said. It also aims to enhance Africa’s partnership with bilateral and multilateral donors, and with private sector investors. The initiative views the poverty reduction strategy paper process as an important element in implementing national efforts to reduce poverty and in coordinating international support. To help implement the initiative, a continent-wide organizational structure is envisaged, and the details of this are being worked out.