1

John Rwangombwa

Permanent Secretary and Secretary to Treasury

Ministry of Finance and Economic Planning

Republic of Rwanda

1

Challenges and opportunities for strengthening ownership, accountability and aid effectiveness through better information: Experiences from Rwanda

Background

Rwanda is heavily aid dependent > $800m per annum in ODA Equivalent to $80 per capita; half of Rwanda’s budget

Current strong government ownership of the aid agenda Rwanda Aid Policy

Sets out GoR preferences and principles for aid delivery Specific reference to the need for transparency through a

national AIMS-DAD

Adherence to Paris Declaration

Evolution of Aid Information Management in Rwanda

Pre-2006, aid data was unreliable/unavailable: No single repository Inconsistent donor reporting

There was a clear need for the development of a single, transparent channel for reporting on ODA flows to facilitate GoR processes: Sound PFM (Budget preparation, Treasury

management, Accounting) Domestic accountability Enabling the GoR to lead in coordinating donors and

monitoring development activities Supporting sound macroeconomic management

Sources of aid information

Donors self reporting through the Development Assistance Database (DAD) Web-based tool for donor reporting and GoR monitoring of aid

flows Reports on donor commitments and disbursements (reports

both BS and project aid) But currently unreliable: overestimated/underestimated, not

regularly submitted

For Government, aid information required is based on: Public financial statements Budget support disbursement schedules aligned to budgeting

process Signed agreements Information from individual project reporting Central bank recording of official transfers

What do we use aid information for?

Planning Macroeconomic forecasting & (balance of payment, monetary,

fiscal) Development planning (division of tasks, avoiding overcrowding of

sectors/ plans, avoiding parallel processes/alignment to national strategy)

Budgeting Legal requirement under our Organic Budget Law: “all official aid

must be recorded in the consolidated budget Inter-sectoral resource allocation

Reporting Development activities Use of funds (how much was absorbed) Track risks of corruption/embezzlement

Aid information and Accountability

How is government held accountable by its citizens for contracting and using ODA? All external loans are pre-approved

individually by parliament All grants & loans are required to be

included in the budget appropriated by parliament

Budget execution reports including aid on budget prepared by Ministry of Finance is presented to Cabinet & submitted to parliament on a quarterly basis

Key challenges (I)

Some aid modalities are more problematic than others: e.g. stand alone project vs GBS

Multiple reporting not matching country needs(e.g. not aligned to indicators in strategy or project components not aligned to budget lines )

Growing role in development of off budget support (foundations and specific bilateral donors)

Willingness of in-country donors representatives to match reporting cycles of governments

Key challenges (II)

Predictability of donors commitments: Few multi-year donors have MTEFs Timing of disbursements always un-predictable

Macroeconomic projections negatively affected by lack of aid information –leading to frequent & unnecessary revisions

Some aid by nature remains off-budget (aid delivered through NGOs and some bilateral donors)

ODA figures from Different sources

ODA to Rwanda from Different sources in 2007 in Million USD

CRS: 503 Gov’t Public Accounts : 543 DAD: 675- The need for a harmonized reporting

system is critical

Opportunities for improvement (I)

Rwanda has now completed for the first time a mutual review mechanism – the Donor Performance Assessment Framework

Relies on donor self-reporting to undertake an annual joint review of performance against 30 indicators covering a range of aid effectiveness issues (mainly Paris indicators)

▪ Compliance with aid information requests through the DAD form one of the criteria for performance assessment

▪ Peer pressure very important in strengthening mutual accountability

Opportunities for improvement(II)

GoR now actively working on a streamlining of business processes to link donor-reported aid data with other databases (project management; IFMIS) to simplify reporting and reduce transaction costs.

IATI has the scope to support the development of consistent definitions for use by all partners, responding to country needs

Common electronic data format agreed under IATI reduces transaction costs for both donor and partner country government, supporting timely reporting.

12

Thank you