Monitoring of Aid For Trade at regional and national level By Calvin Djiofack Zebaze,

1. Monitoring of Aid For Trade at regional and national level By Calvin Djiofack Zebaze, International Lawyers and Economists Against Poverty (ILEAP)

2. Outline of presentation • Why to monitor A4T • How to monitor A4T Conclusion

3. I. Why to monitor A4T • Strengthening the confidence among stakeholders • create conditions of efficient utilization of aid: • By allowing the recipient countries to extract lessons from the experiences and integrate them into the country’s overall development plans • To manage risk linked to aid: • like other forms of Aid flow, Aid for trade have a theoretical risk of Deutsch disease (see Adams et al, 2005) : the form of aid and its utilization is therefore essential

4. II. How to built Indicators for the monitoring in Recipients Countries? • Our approach consists to examine the channel through which the A4T initiatives can achieve its main objective of Poverty Reductions, and • Identify intermediate indicators for each stage of the channel. • propose Mean Indicators and Performances Indicators for each objective. • The illustration is as follows:

5. How to monitor: Channel of A4T to poverty • Channel of A4T to poverty

6. 11 objectives identified

7. Suggestion of indicators • We focus on two Objectives: • Mainstreaming and • Donors responses

8. Sugestion of indicators: Mainstreaming • Mean Indicator: • the Extent to which the DTIS is introduced in PRSPs: “number of priority projects included in the PRSP”. • However, merely mainstreaming trade into PRSPs is not enough to improve A4T outcomes. • World Bank (2006) evaluation of IF find that the relatively few Bank lending operations have directly resulted from mainstreaming. • An ongoing evaluation of IF by ILEAP found that LDCs who have completed their DITS and are more advanced in mainstreaming are receiving more aid compared to others.

9. Sugestion of indicators: Mainstreaming • Result Indicator: • This allow to capture the effective weight of A4T in the country strategy: • “the share of total Public aid allocated to Aid for trade”.

10. Suggestion of indicators: Donor responses • Mean indicator: • Increasing in amount of AFT flow • However, this could not work without satisfying some conditions:

11. Suggestion of indicators: Donor responses • Result indicators • (1) Increasing in flow toward priorities identified by the beneficiaries • in DITS for example in LDCs • (2)Increasing in flow toward supply side projects. • This is essential to outweigh the potential Dutch disease resulted from augmenting foreign currency that could lead to appreciation of exchange rate • Pycroft (2008) in the case of Ethiopia shows that the extra inflow of aid of 3 % of GDP without any compensating effects on the supply side, cause an 11 % fall in exports

12. Sugesttion of indicators: Donor responses • (3) Share of A4T which is not linked • There are important donors maintaining their aid linked notably to: • Donor enterprises • Literature shows strong link between aid and economic interest of donors (numbers of enterprises) • Donor entrants origin • Increased cost of maintenance • Donor employees • Increasing practice from some donors

13. Sugesttion of indicators: Donor responses • (4) pro-poor orientation of flow: • Share of A4T allocated to rural infrastructure (appropriate in Africa context) • (5) stable and predictable flow: • Gap of aid flow with the average of the last five year

14. Conclusions • International community should mobilize effort to render beneficiary monitoring of A4T effective ( As recommended by task force) • Regional institutions may have comparative advantage to assume this responsibility in some regions • Monitoring A4T should not focus only on mean deployed but also on results through intermediate objectives.