PEFA Performance Measurement Framework Case Study - Ghana

1. PEFA Performance Measurement FrameworkCase Study - Ghana Presentation by Marcelo Andrade The World Bank January 18, 2007

2. Outline • Ghana - Performer with potential • PEFA Assessment - Ghana Context • Do’s and Don’ts • Working with Government • Working with Donors • Working across Networks

3. Ghana: Performer with Potential • Open society, political transition in 2000, first in AU to complete Africa Peer Review Mechanism • Social capital, will achieve poverty MDG • Top among peers, but not at its potential

4. Structural adjustment since mid-80s. Poverty down, growth sustained, economy same • GPRS1 (2003 – 05) – Growth accelerated, macro stabilization, enrolment up, debt relief • GPRS2 (2006-09) – Stronger focus on growth and structural transformation. Three key pillars: Private-sector driven growth, Human development, Governance and Civic responsibility • Country’s goal - Middle-Income status by 2015 • Challenges - strategic depth, results-focus, resourcing

5. PEFA Assessment: Ghana Context • MDBS Partnership since 2003 - Focus on key GPRS actions and outcomes • Many GPRS1 goals achieved. GBS predictability improved (~$300/year from ten MDBS partners, close to a third of resource flows representing about 10% of GDP), plus debt relief. • Policy Dialogue - Budget centrality, strengthen PFM • HIPC AAP (2001 – 1 out of 15 benchmarks met; 2005 – 8 out of 16 met). • First time - 2006 Budget approved before beginning of FY. Audited 2005 Consolidated Fund accounts submitted to Parliament in June 2006. • External Review of PFM (ERPFM) – annual assessment within MDBS framework. Objectives: • developmental - assist Government monitor its PFM reforms. If need be, suggest options/actions to address challenges. Align with budget process. • fiduciary - inform donors providing budget support about country’s progress in strengthening its PFM systems

6. GoG PFM Action Plan adopted in January 2006 • PEFA assessment part of 2006 ERPFM • Link to Monitoring of OECD/DAC Paris Declaration on Aid Effectiveness (2005)

7. PEFA PMF - Do’s and Don’ts • Working with Government • PMF - not only about rating countries.Measurement leg of Strengthened Approach to PFM reforms. Country-led reform agenda and coordinated donor support program also matter • How to conduct assessment? • (i) external assessment without Govt. involvement - likely to generate antibodies, particularly if assessment is perceived to be linked to continuation of budget support • (ii) self assessment – if insufficiently guided, might lead to unduly rosy ratings

8. (iii) Trick in Ghana – middle course. ERPFM team facilitated discussion on the standards underpinning each indicator. Joint assessment on the level of existing performance. Areas in which opinions diverted recorded in the PFM – PR • Focus on PFM systems, not budget policy • PEFA valuable to help prioritise, sequence reform measures. Helped to identify “quick wins” • Score in line with PEFA guidelines and information and documentary evidence

9. Triangulation of information, wherenecessary • Govt. ownership is key. Stick to principle that assessment is value neutral • Plan carefully the exercise and field work

10. Working with Donors • PEFA high level indicators - international standards, more demanding than the HIPC-AAP. Need to be understood in the proper context • PEFA assessment – not intended to be used as a scorecard for conditionalities

11. Key to quality of PFM PR is team capabilities and how assessment is conducted. Not whether is stand alone or integrated in a broader analytical product • PFM PR - if part of broader analyticalproduct, presentation as a free standing report facilitates use as common information pool

12. Working across Networks • Working as a team, key to success • Be responsive to PEFA Secretariat’s quality reviews • PEFA PMF learning curve – key to quality