IMF SM/01/16, Revision 1, March 28, 2001; and World Bank March 30, 2001, IDA\SECM2001-51\1. See also: http://www.imf.org/external/np/hipc/2001/track/index.htm; and http://www1.worldbank.org/publicsector/tracking.pdf.
The March 2001 Board paper included 25 countries: Benin, Bolivia, Burkina Faso, Cameroon, Chad, Côte d’Ivoire, Ethiopia, The Gambia, Guinea, Guinea-Bissau, Guyana, Honduras, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, São Tomé and Príncipe, Senegal, Tanzania, Uganda, and Zambia.
“Tracking” is defined as the identification and reporting of budgeted and actual outlays for poverty reduction.
Ghana was added after the February 2001 Board discussion. Assessment missions were not carried out for Côte d’Ivoire and Guinea-Bissau due to scheduling difficulties and the relative inactivity of the Bank- and Fund-supported programs.
See Mr. Sandstrom’s Summing-Up of the Bank Board Informal Meeting, February 6, 2001 and the Acting Chairman’s Summing-Up, IMF Executive Board Meeting 01/12, February 5, 2001.
For a detailed discussion, see SM/01/16, Revision 1, March 28, 2001. Several countries have established HIPC subaccounts, and some have started to track outflows on HIPC projects. Countries have not been advised to dismantle these accounts, but instead to broaden this tracking to all poverty-reducing spending.
PSIA is defined as the analysis of the positive and negative consequences of changes in policy on the well-being of different groups in society, with an explicit focus on the poor and vulnerable. Depending on country circumstances, PSIAs may make use of a variety of methodological tools to gauge the impact of policies. These include incidence analyses, social impact surveys, micro-simulation models using household surveys, and computable general equilibrium models.
See the recent Bank-Fund Board paper, “Poverty-Reduction Strategy Papers: Progress in Implementation,” (www.imf.org/external/np/PRSP/2001/091401.htm). The forthcoming PRGF review also assesses the state of PSIA in Fund-supported programs. The appropriate treatment of PSIA is expected to be addressed as part of the Bank’s planned update of adjustment lending policy.
The MDGs align the International Development Goals agreed to at various international fora with the Millennium Declaration by Heads of State in September 2000. The MDGs consist of 8 goals and over 40 indicators.
Countries were not requested to agree to the use or dissemination of the results beyond this exercise, other than to share them with assistance providers.
Some of these issues are indirectly included within the set of indicators. For example, a basic function of an internal audit/control system (whether French-tradition ex ante control or English-tradition ex post auditing systems) is checking compliance of expenditures with current laws and procedures, including procurement.
Broad mapping typically involves approximating poverty-reducing programs identified in PRSPs with more aggregated budget data. For example, in Burkina Faso, spending on the following is defined as poverty-reducing in the PRSP: basic education, a health-care package, rural health facilities and HIV/AIDS, and rural development (including agriculture, animal resources, water supply, and rural roads). However, the categories for which data are available are total education, total health, capital spending on rural roads, women’s welfare, and other social expenditures. Similarly, Mauritania identifies as poverty-reducing: primary, secondary, technical and vocational education; health centers, a health-care package, vaccinations, and reproductive health; and water supply and urban and rural development. Data are available for total education, total health and a category called poverty reduction.
Expenditures on these poverty-reducing programs in 16 countries are projected to increase by 2.2 percentage points of GDP and 6.8 percentage points of total government spending, on average, over 1999 levels.
The 14 countries are Bolivia, Burkina Faso, Cameroon, Ethiopia, The Gambia, Ghana, Guyana, Honduras, Madagascar, Mali, Niger, Senegal, Tanzania and Uganda. For these countries, education and health care expenditures have increased by 0.4 and 0.2 percentage points of GDP, and 1.5 and 1.2 percentage points of total government spending, respectively, since 1999.
The method and implications of decentralization differ from case to case. For example in Tanzania, subnational spending on poverty-reducing programs comprises, to a large degree, outlays on wages and salaries that are paid directly from the central government budget. Also, the purchases of goods and services are done centrally, making it easier to account for sub-national spending. However, devolution is ongoing and this situation could change in the future. In Bolivia, in contrast, all HIPC assistance to finance poverty-reducing spending will flow through local authorities.
IFMISs computerize the functional processes of fiscal management, thereby providing more timely information for improved decision-making. IFMIS implementation projects frequently include components for improved classification and coding systems, training and skills development, record-keeping, and expenditure process reengineering. Properly implemented and fully utilized, IFMISs can strengthen commitment controls and routine reconciliation of banking and fiscal accounts, as well as more timely and accurate reporting.
Some countries, such as Cameroon, The Gambia, Madagascar, Mali, Mauritania, Niger, and Zambia, have started by tracking the use of HIPC assistance rather than all poverty-reducing expenditures. As discussed previously, this is not sufficient to ensure that such funds are additive to current poverty-reducing spending, and these countries are moving beyond tracking of HIPC assistance only.
As noted above, the Bank is supporting IFMISs in roughly one-half of HIPCs, and has been a primary provider of assistance in this area generally. The sound development of well-functioning computerized financial management information systems has the potential to address many of the weaknesses identified in current systems. The Bank has been assessing its experience in IFMIS development, and found that experience in Africa to date has been mixed, while in Latin America the experience has been more successful. An important task is dissemination of lessons learned from implementing such systems to improve their impact.
PRSCs have been approved for Burkina Faso, Uganda, and Vietnam.
Budget formulation measures include, for example, integrating off-budget accounts into the overall budget (Guinea, Mozambique, and Rwanda) and adopting functional or program classifications (Benin and Rwanda). Budget execution measures include, for example, introducing integrated computerized and fiscal and accounting systems (Cameroon, Ghana, Madagascar, Mauritania, Nicaragua, Niger, and Zambia), commitment control systems (Malawi and Uganda) and verification and monitoring of arrears (Mauritania, Nicaragua, Uganda, and Zambia). In the area of reporting, the focus has been on improving the timeliness and dissemination of budget execution and treasury reports (Benin, Malawi, The Gambia, and Zambia) and on strengthening the role of audit institutions (Benin, Cameroon, Niger, Rwanda, Senegal, and Zambia).