In a vigorous endorsement of the regional approach to technical assistance delivery and its responsiveness to member country needs, IMF Managing Director Rodrigo de Rato recently announced that a third Africa Regional Technical Assistance Center (AFRITAC), for Central African countries, could be established if the requisite external funding could be secured to complement the IMF’s contribution. The IMF’s decision follows an independent evaluation of the first phase of operations at the East and West AFRITACs and an IMF Executive Board review of the effectiveness of the IMF’s five regional technical assistance centers worldwide. Executive Directors cited the important contribution that these centers make to the IMF’s technical assistance program and lauded donors for their support, which has been crucial not only in providing financing but also in building broader country ownership of reforms and strengthening coordination of capacity-building efforts in member countries. The review also provides the basis for the East and West AFRITACs to move forward with an ambitious agenda in their second phase of operations.

Abstract

In a vigorous endorsement of the regional approach to technical assistance delivery and its responsiveness to member country needs, IMF Managing Director Rodrigo de Rato recently announced that a third Africa Regional Technical Assistance Center (AFRITAC), for Central African countries, could be established if the requisite external funding could be secured to complement the IMF’s contribution. The IMF’s decision follows an independent evaluation of the first phase of operations at the East and West AFRITACs and an IMF Executive Board review of the effectiveness of the IMF’s five regional technical assistance centers worldwide. Executive Directors cited the important contribution that these centers make to the IMF’s technical assistance program and lauded donors for their support, which has been crucial not only in providing financing but also in building broader country ownership of reforms and strengthening coordination of capacity-building efforts in member countries. The review also provides the basis for the East and West AFRITACs to move forward with an ambitious agenda in their second phase of operations.

In a vigorous endorsement of the regional approach to technical assistance delivery and its responsiveness to member country needs, IMF Managing Director Rodrigo de Rato recently announced that a third Africa Regional Technical Assistance Center (AFRITAC), for Central African countries, could be established if the requisite external funding could be secured to complement the IMF’s contribution. The IMF’s decision follows an independent evaluation of the first phase of operations at the East and West AFRITACs and an IMF Executive Board review of the effectiveness of the IMF’s five regional technical assistance centers worldwide. Executive Directors cited the important contribution that these centers make to the IMF’s technical assistance program and lauded donors for their support, which has been crucial not only in providing financing but also in building broader country ownership of reforms and strengthening coordination of capacity-building efforts in member countries. The review also provides the basis for the East and West AFRITACs to move forward with an ambitious agenda in their second phase of operations.

When East AFRITAC opened in 2002, and West AFRITAC a year later, the intent was to expand the regional technical assistance concept to other parts of Africa, but only after the first two centers had established a track record and their effectiveness could be independently evaluated. A team of three independent evaluators (each nominated by donors, recipients, and the IMF) completed its assessment in 2005.

A strong start

How well is the regional technical assistance delivery concept working in Africa? The evaluators, in a report published in April 2005, found the AFRITACs to be an effective channel for capacity building and one that all beneficiary countries appreciated. In the evaluators’ eyes, the centers “distinguish themselves from other delivery modes by their responsiveness to client needs, proximity to member countries, quick response time, familiarity with local context and issues, and relevant leadership.” The report praised the centers’ contribution to enhancing country ownership of reforms, increasing regional solidarity and the use of African experts, and improving accountability.

Nonetheless, the evaluators also saw room for improvement. They urged even greater use of African experts, stronger links between capacity-building plans and poverty-reducing strategies, and increased communication and coordination with donors and regional institutions. AFRITAC member countries and the IMF devised an action plan outlining steps to address these recommendations, better integrate the centers’ work plans with those of the IMF’s technical assistance departments, and improve the tracking of results.

And now, Phase II

The independent evaluation also provided a starting point for the IMF and other stakeholders to reflect on goals for the AFRITACs’ second phase (May 2006 through April 2009). Donor support for the AFRITACs’ first phase amounted to over $18 million, with contributions from the African Development Bank, Canada, China, Denmark, Finland, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Norway, the Russian Federation, Sweden, Switzerland, and the United Kingdom. In advance of the second phase, an IMF-sponsored donors’ conference in Paris in September 2005 discussed the funding needed to continue operations for the next three years.

In an address to the conference—attended by AFRITAC member countries, donors, other collaborating agencies, and IMF representatives—Abdoulay Bio-Tchané (Director, IMF African Department) underscored how much the AFRITACs had accomplished, thanks to the firm support of donors and collaborating agencies, but noted that more needed to be done. The impressive growth of sub-Saharan African economies in recent years, as well as the prevailing favorable economic conditions worldwide, provides opportunities, he added, to secure even greater advances in Phase II. The chairs of East AFRITAC, Dr. Abraham Kidane (Senior Economic Advisor to the Government of Eritrea), and West AFRITAC, Jean-Baptiste Compaoré, M.P. (Minister of Finance and Budget of Burkina Faso), echoed these sentiments.

Conference participants generally agreed with this positive assessment and endorsed a proposed general strategy and work plan that remained focused on areas of IMF expertise but included more resident advisors in the centers, on-the-job training for member country officials, and results-based performance indicators to track center activities.

Following the Paris conference, IMF staff worked with donors and AFRITAC member countries to finalize Phase II plans before the steering committee meetings of the West and East AFRITACs, held on December 1 and December 6, respectively. Donors also pledged a total of $15.5 million to finance Phase II. Coupled with a projected Phase I surplus that donors agreed to roll over, a Phase II budget of $17.5 million was endorsed by both steering committees.

AFRITACs meet training needs

The IMF launched its Africa Regional Technical Assistance Center (AFRITAC) Initiative in response to calls from African heads of state for more help in strengthening institutions and enhancing their ability to design economic policies. East AFRITAC, which opened in Dar es Salaam, Tanzania, in 2002, serves Eritrea, Ethiopia, Kenya, Rwanda, Tanzania, and Uganda. West AFRITAC—temporarily located in Bamako, Mali—serves Benin, Burkina Faso, Côte d’Ivoire, Guinea, Guinea-Bissau, Mali, Mauritania, Niger, Senegal, and Togo.

This regional approach aims to deliver capacity-development assistance in the IMF’s areas of expertise—public resource management, financial systems, and macroeconomic statistics. This assistance is largely demand-driven and responsive to country needs, closely linked to the poverty-reducing strategies of member countries, and coordinated with technical assistance provided by other donors and IMF headquarters. To these ends, the AFRITACs are designed to deliver technical assistance primarily through resident advisors (who not only develop a deeper knowledge of country needs and circumstances, but can also react more quickly to them). The regional provision of technical assistance also recognizes the similar economic and policy challenges that neighboring countries often face, while regional training events allow country officials to share their experiences. Finally, the regional approach emphasizes the dynamic and collaborative relationship among the centers’ member countries, donors, and cooperating organizations—a relationship embodied in a strategy-setting steering committee for each center.

Since their establishment, the AFRITACs have boosted the annual volume of IMF technical assistance to the region by almost 30 percent. In FY2005 alone, some 800 participants attended 24 AFRITAC training seminars and workshops. About half of these events were organized jointly with the African Capacity Building Foundation, a major partner of the initiative. Individual countries also saw significant achievements. For example, with East AFRITAC assistance, Kenya and Uganda have now implemented fully integrated domestic tax administrations. In the West, Guinea, Mauritania, and Togo have substantially enhanced their statistical systems and now post their metadata (the methodologies underlining the production of their statistics) on the IMF’s website (www.imf.org).

What’s ahead

The East and West AFRITACs have set new priorities for the coming three years. Their goal is to consolidate and build on the gains of the past three years, with key enhancements including an added resident advisor for each of the centers; the introduction, when possible, of professional postings for civil servants from member countries; and even greater use of African expertise. Consideration will be given to the role that AFRITACs should play in coordinating technical assistance to countries and in helping them develop comprehensive capacity-building plans. The centers’ work plans and strategic direction will also be updated through new needs assessments, taking into account countries’ poverty-reducing strategies.

Technical assistance will focus on the following priorities in the second phase:

Publicfinancialmanagement. This will entail continued support of treasury management reforms and efforts to enhance the regulatory framework for managing public finances, assist in budget preparation, and address governmental fiscal relations.

Revenueadministration. Emphasis will be on the operational level to complement tax policy advice and assistance provided from IMF headquarters. The aim is to establish modern revenue administrations with a capable professional staff.

Financialsectorsupervision. The goal is to bolster capacity to build risk-based supervision systems, consolidate supervision, improve the resolution of weak banks, upgrade off-site supervision, and reform the legal and regulatory supervisory frameworks.

Monetaryoperations, publicdebtmanagement, andfinancialmarkets. The key priorities remain pursuing payment system reform and developing domestic money and government debt markets. Best practices in reserve management will continue to be introduced.

Macroeconomicstatistics. The centers will provide continued assistance with issues related to member country participation in the IMF’s General Data Dissemination System, including better links between the system and countries’ poverty-reducing strategies.

In terms of AFRITAC governance, initial arrangements have worked well and will largely be maintained. There is room, however, to better disseminate information on AFRITAC projects and work plans on the centers’ secure websites. A results-based monitoring system will also be piloted to track performance.