Thursday, December 21, 2006

Programming of the 10th EDF: whose priorities?

The programming process to allocate the overall amount contained in the 10th EDF to 77 ACP countries is currently taking place. The first phase of the process that led to the drafting by the delegations and local ACP officials of draft Country Strategy papers is almost finalised and the second phase taking place in the Brussels headquarters of the Commission is already engaged. It involves discussions in Country Team meetings and screening of the CSPs by the Inter-Service Quality Support Group (iQSG) attached to DG Development that will check the quality of the CSPs and their conformity with EU’s policies and guidelines. It seems that after these two stages, the CSPs will have to be confirmed by Commissioner Michel before they are revised and finalised at country level and undertake the final EC interservice consultation. The last step of the process is the approval of the CSPs by the EDF Committee composed of representatives from the 25 Member States planned for March and April 2007. This process, which happens to be sensitive and quite secret in many countries will determine the few sectors on which EC aid will focus in each country, the modality used to deliver aid (budget support, programme support, etc) and the most appropriate actors for implementation (technical assistance, donor agencies, governments, ..). The final country allocation is also part of the negotiations as the incentive envelope of € 3 billion for Governance will be distributed at the end of the process according to the success of the dialogue taking place during the programming.

In spite of the fact that the principle of ownership and alignment with national policies is everywhere in EC policy papers and guidelines on aid programming, a number of case studies show that EC priorities (as defined in the EU Africa strategy and guided by the objective of signing Economic Partnership Agreements with ACP regions at the end of 2007) greatly influence the process.

On the issue of participation, information coming from ACP civil society suggests that not only has there been little real engagement of civil society and national parliaments in the process so far, but that, in general, there appears to be even less effective influence of local stakeholders than for the 9th EDF despite the fact that in many countries civil society is getting better organised and more active (see Eurostep report, We decide, you "own").

As already detailed in EU News 6 and 8, the 10th EDF will contain an incentive envelope that will come in addition to the regular country allocation in those countries that have a good record on governance and are committed to reform according to EC predefined criteria. To that end, for each country, delegations have to establish a governance profile based on a detailed list of questions that goes far beyond usual governance criteria. This process is so precipitate that it offers very little opportunities for coordination with other donors and consultation of local actors and stakeholders who are best placed to judge and witness the quality and efforts of governance in their own country.

The special incentive fund for governance doesn’t mean that governance is not part of the focal sectors of a number of countries. Together with infrastructure and competitiveness, governance is in fact one of the major priorities of this programming exercise.

Human and Social Development concentrated in the sector of health and education is the poor parent of the process. The Commission intends to concentrate its efforts in those two sectors exclusively through the provision of budget support. The consequence is that the already low level of the 9th EDF allocated to health (4%) and education (6%) outside budget support will further decrease in the 10th EDF. Besides the many questions around the predictability and effectiveness of budget support in the fight against poverty and service delivery, one can also question the unilateral decision of the EC especially with regard to those countries that are not "eligible" for budget support.

At regional level, the main priority of the EC is to utilise the 10th EDF to support the entry into force of the EPAs as clearly stated in the programming guidelines: "the main focus of each of the regional programme shall be regional economic integration, trade and EPAs. This covers, inter alia, strengthening the capacity of regional organisations tasked with economic integration, EPA related functional co-operation and facilitating trade liberalisation including assisting the ACP states to absorb the budgetary effects of deeper regional integration through for instance tax and customs reforms. The regional indicative envelopes shall in principle be calculated on the basis of the EPAs configuration".

The funds allocated to the regional level have been increased in consequence to a total of € 1400 million (plus € 350 million from the governance incentive envelope) that represent 8% of the 10th EDF. An additional 12.3% of the 10th EDF have been earmarked for intra-ACP (namely all ACP) and inter-regional cooperation programmes whereas both envelopes - regional + intra-ACP - only represented 9.6% of the 9th EDF initial breakdown. In comparison, the initial funding envelopes allocated to ACP countries for their national indicative programmes (incentive governance fund excluded) represent only 48% of the total 10th EDF.

The way the 'intra-ACP' envelope has been used so far and the EC's intentions for its future let us think that it will support the objectives of security, big infrastructure, investment and trade (Peace Facility, Infrastructure facility, migration facility, business climate facility etc...). Moreover, the way the intra-ACP envelope is allocated and managed point to a far more proactive fund management by the EC moving away from the traditional joint (EC-ACP) management spirit of Cotonou.

New regional configurations and the almost exclusive focus on EPAs in the regional programming might seriously compromises the continuation of certain regional cooperation activities that had been undertaken under previous EDF.

Negotiations on regional programmes are particularly difficult because there is no agreement between the EU and the ACP group neither on the way the adjustment costs for EPAs should be financed nor on the financial volume and type of support that is needed. The Commission encourages the ACP states to utilise the 10th EDF regional (and national) indicative programmes in that view while the ACP side asks for an EPA Adjustment Facility to be financed in addition and outside of the 10th EDF (see article on EPAs).

Based on experience, we fear that the financial protocol for the 10th EDF will not be ratified before 2009 and that disbursements will not come before 2010 at the earliest. The ratification process might even last longer than for the 9th EDF since the EU is now composed of 25 Member States instead of 15.

First questions in such circumstances are: why does the EC rush to adopt national and regional indicative programmes that will not be implemented in 2008? Why do they put so much pressure on the delegations to establish governance, migration, gender and environment profiles without any possibility of a real consultation of local actors? Is the response to be found in the push to sign EPAs at the end of 2007?

The delay in ratification is also a real concern for ACP countries: does it mean that a transition period of minimum two years is to be expected between the last commitments under the 9th EDF (at the end of 2007) and the entry into force of the new protocol? It would seriously put into question the appropriateness of the EDF in terms of support to the implementation of the EPAs and could have serious implications on a smooth and effective transition from one EDF to the other. This situation will also have consequences on the end of term review of the 9th EDF and some fear that countries which have difficulties to absorb EC aid will loose money at the benefit of the good performers that will need additional funding to maintain budget support during the transition period.

All questions and concerns of the CONCORD Cotonou group about the 10th EDF programming will be summarised in a briefing/position paper under preparation. These concerns will be presented at the occasion of an encounter between CONCORD and the Development and ACP working parties of the Council organised by the Finnish presidency on the request of the Finnish NGO platform. The CONCORD Cotonou group has also planned to organise a seminar on that issue in February 2007 before entering in the last phase of the programming process.

Source: EU NEWS - Issue 10, December 2006 (APRODEV, CIDSE, Caritas Europa).

For more information, see the ACP-EU conference blog. See also Euforic dossier on ACP-EU cooperation.