Foreign Assistance Reform: An Overview for Africa

1. Foreign Assistance Reform:An Overview for Africa African Ambassadors Policy Roundtable 1 Woodrow Wilson Center April 10, 2007

2. THE OBJECTIVE: To Use Foreign Assistance to Achieve the Goal of Transformational Diplomacy The goal: “Helping to build and sustain democratic, well-governed states that will respond to the needs of their people, reduce widespread poverty and conduct themselves responsibly in the international system.” The five priority objectives to drive attainment of the goal: • peace and security • governing justly and democratically • investing in people • economic growth • humanitarian assistance

3. THE PROBLEM: Foreign Assistance Has Not Been Strategically Focused • Lack of clear goal and subsequent indicators has resulted in inconsistent prioritization of resources and subsequent diminished effectiveness of foreign assistance • Opaque, duplicative budgeting process has ineffectively used staff time and obscured rationale behind budget decisions • Overlapping roles in Washington and the field has underutilized the comparative advantage of each group • Inability to track funds and results centrally to an appropriate level of detail has resulted in inadequate accountability

4. THE SOLUTION INCLUDES: Key Principles of Foreign Assistance Reform • Focus foreign assistance on the five priority objectives that, if achieved, will drive the attainment of the transformational diplomacy goal • Integrate State and USAID foreign assistance • Focus Washington on setting strategic direction and priorities • Focus Field on developing tactical plans for implementation of the strategic priorities – and implementing • Strengthen accountability to ensure foreign assistance resources are actually used for the achievement of the strategic priorities and are used efficiently and effectively

5. THE SOLUTION INCLUDES: A New Strategic Framework For Foreign Assistance • Each of the 158 countries currently receiving foreign assistance is best defined by one of five country categories, based on requirements shared with similarly situated countries: • REBUILDING COUNTRIES – States in or emerging from and rebuilding after internal or external conflict • DEVELOPING COUNTRIES – low or lower-middle income States; not yet meeting MCC performance criteria • TRANSFORMING COUNTRIES – low or lower-middle income States; meeting MCC performance criteria • SUSTAINING PARTNER COUNTRIES – States with upper-middle income or greater; U.S. support is provided to sustain partnerships, progress, and peace • RESTRICTIVE COUNTRIES – States of concern where there are significant governance issues

6. THE SOLUTION INCLUDES: A New Strategic Framework For Foreign Assistance By focusing the allocation of resources for each country on the circumstances generally present in the relevant country category we will: • Strategically deploy foreign assistance resources to the specific needs and circumstances identified by the framework • Drive the achievement of progress in those program areas with the greatest leverage from among the five priority objectives and thus drive the achievement of the transformational diplomacy goal • Assist in moving countries along a trajectory to the next higher country category, and eventually to graduation from all or most foreign assistance

7. THE SOLUTION INCLUDES: A New Leadership Structure for Foreign Assistance • Director of Foreign Assistance (DFA) has direct authority over all foreign assistance funding and programs within State and USAID • DFA serves concurrently as Administrator of USAID • DFA provides overarching leadership for all foreign assistance with specific coordinating role for other agencies and independent programs (MCC and PEPFAR) • DFA charged with ensuring all foreign assistance resources are working together to achieve the transformational diplomacy goal • Establishment of DFA has enabled Secretary to have one senior officer direct all foreign assistance and thus drive rather than react to the foreign assistance resource allocation process

8. FOREIGN ASSISTANCE REFORM: Expected Outcomes • Establishes one strategic foreign assistance goal • Establishes strategic direction up front from Washington – reducing ad hoc decision making • Establishes the field as the principal designer of implementation plans • Consistently integrates regional and functional expertise into country plans • Provides a “full picture” of country programs, and promotes comprehensive programming for greater impact • Fully integrates – at every stage – State/USAID planning processes • Improves accountability and transparency – results to be measured and compared across countries, programs, and partners • Streamlines process – gives country teams more time to implement Note: Reform well-received by DAC Peer Review

9. USG Funding for Sub-Saharan Africa,FY 2006 (in $000s) • Development Assistance (DA) 596,273 • Child Survival and Health (CSH) Funds 391,936 • Transition Initiatives 14,583 • International Disaster and Famine Assistance 179,790 • Economic Support Funds 133,135 • P.L. 480 Food Assistance 850,873 • Global HIV/AIDS Initiative 1,239,152 • Peacekeeping Operations 110,866 • Foreign Military Finance 13,860 • International Military Education and Training 10,177 • Nonproliferation, Anti-Terrorism, Demining 26,446 • International Narcotics Control and Law Enforcement 3,168 • Millennium Challenge Account 14,674 Total Program Funds $3,584,933

10. United States $3,504 Other Donors $6,028 France $2,964 African Development Fund $897 United Kingdom $2,265 European Commission $2,915 Germany $1,204 Netherlands $1,155 International Development Association (World Bank) $3,822 Portugal $803 Top Bilateral and Multilateral Donors (in $US Millions) 2004 Total Net Official Development Assistanceto Sub-Saharan Africa: $US 25.557 Billion

11. Education: 4% Population and Health: 5% Government and Civil Society: 7% Other: 14% Emergency Relief: 13% HIV/AIDS: 16% Food Aid*: 38% Debt Action: 3% * Emergency Food Aid included in Food Aid U.S. Foreign Assistance in Africa by Sector Calendar Year 2004, Total: $3,504,050,000

12. 4,000 Child Survival and Health 3,000 Development Assistance Economic Support Funds 2,000 Global HIV/AIDS 1,000 PL 480 Food Assistance 0 2004 2005 2006 2007 Source: US Foreign Operations Budget, FY2006 and FY2007 Summary Spigots Tables. Title II figures are from USAID Congressional Budget Justification Growth in Appropriations for Sub-Saharan Africa by USAID-Managed Account (in $000s)

13. Priority Countries In FY08 US foreign assistance in Africa is concentrated in 12 countries: • Sudan $679 million • South Africa $609 million • Kenya $541 million • Nigeria $534 million • Ethiopia $506 million • Tanzania $342 million • Zambia $336 million • Uganda $329 million • Mozambique $281 million • Rwanda $142 million • Liberia $116 million • DRC $ 90 million

14. Status of 2007 Legislation • Congress ordinarily passes a single appropriations bill each year for foreign assistance. • The previous Congress did not enact a foreign aid bill. Consequently, we are operating under a “Continuing Resolution,” set to expire tomorrow. • A regular appropriations bill or new Continuing Resolution must be passed. • Expectation is that Congress will enact a year-long Continuing Resolution that will fund foreign assistance in FY07 at roughly the same level as in FY06.

15. Questions? • For more information on Foreign Assistance Reform please visit: www.state.gov/f