EDPRS – Update 25 Jan 2007

1. EDPRS – Update 25 Jan 2007 MINECOFIN

2. Presentation outline • Calendar and road map • Costing progress update • Expenditure prioritisation • Institutional capacity needs assessment • Progress on M&E • Next steps

3. 1. Calendar and road map

4. 2. Costing progress update • Financially unconstrained costing • Most sectors have completed the costing: health, water and sanitation, agriculture, social protection, environment, infrastructure transport, justice, private sector • Financially constrained costing • Completed costing models from agriculture, social protection, transport infrastructure, justice, private sector • Preliminary results for most sectors by end-January 2007

5. Financially unconstrained costing • Sectors with models are based on MDG costing framework (health, education, watsan, social protection, agriculture, energy & transport infrastructure). Scaling up is in accordance with MDG priorities. • The remaining sectors have used templates and have been requested to take into account capacity limitations (management/HR, procurement, capital equipment) and build these requirements into the models.

6. Substantial needs identified in all sectors

7. Financially constrained costing • Budget ceilings based on 2007 sector shares are projected forward according to macroeconomic framework. • Expenditure growth figures to be updated by MINECOFIN by end January 2007 and agreed with IMF in March. • EDPRS supporting activities to be held constant in real terms over time; medium scenario implies increase in share of budget to main EDPRS sectors (from 75% in 2007 to 83% in 2011). • Shares of EDPRS main sectors over 2008-2011 to change according to strategic national priorities -> to be discussed by government (National Steering Committee, High-Level Retreat Akagera).

8. Initial sector ceilings for constrained costing (2007 baseline scenario)

9. 3. Expenditure prioritisation • Why revisit the definition of priority expenditure? • The current definition: • Is too broad (covers around 1/3 of total budget) and therefore too ‘dilute’ for meaningful analysis • Changes made to the definition are not systematic • 0.1% GDP increase expected year on year – is this logical? • Creates fiscal pressure on remainder of the budget (“non-priority” items can be crowded out) • Fungibility between different budget lines • No binding commitment to particular execution levels • No unambiguous notion of what constitutes pro-poor • The Government’s priorities are defined by the whole budget and the MTEF

10. Expenditure prioritisation: New challenges for EDPRS • Address widening income disparities • Recognize difference between quantity and quality of growth • Quantity: Raise overall growth rate • Channelling resources to the most productive areas and achieving balance in expenditure • Quality: Ensure the low income earners are sucked into development process • Subset of the budget: Poverty Reducing Expenditures (PRE)

11. Expenditure prioritisation: Poverty Reducing Expenditures • PRE could include: • Programmes providing critical services to the poor, e.g. primary health, primary education, water & sanitation, social protection • Programmes that are largely based in rural areas and target the existing poor (e.g. terracing, agricultural extension, rural roads) • PRE receives special treatment: • No in-year budget cuts • Predictable cash flow • Close monitoring to ensure execution rate >90%

12. Expenditure prioritisation: Poverty Reducing Expenditures (cont.) • PRE would remain limited in scope, and not necessarily increase over time (depends on analysis of whole budget) • PRE subject to PSIA to improve effectiveness in targeting the poor • Non-PRE crucial for long term poverty reduction • Prioritisation of non-PRE done within sectors (in line with new Organic Budget Law) • Non-PRE monitored through PERs to enhance effectiveness

13. 4. Institutional capacity needs assessment • Nation-wide Skills Audit being undertaken • Includes human and institutional capacity elements • Covers public, private and civil society institutions • Methodology • Focal points created in each institution to collect information • Questionnaire delivered to institutions via focal points -> determine needs (admin, planning etc) based on existing and projected capacity levels • Outputs • Analysis of data and first draft report (February 2007) • Discussion and validation at National Steering Committee • National Skills Development Policy designed (March 2007) • National Strategic Implementation Plan and Communications Strategy produced (May 2007)

14. 5. Monitoring and Evaluation • Sectors produce limited set of key performance indicators to be included in EDPRS document (Feb 2007) • These are to be used for annual progress monitoring through imihigo framework • More extensive monitoring through Cluster system and Joint Sector Reviews

15. Current state of M&E frameworks • Completed: • Education, Health, Private Sector, Environment, Justice (awaiting stakeholder feedback) • On-going: • Water and Sanitation, Infrastructure • Beginning: • Decentralisation, Agriculture, Social Protection, Security

16. 6. Next steps • Production of first draft EDPRS for national consultation in February (National Steering Committee and Ministerial Retreat Akagera) • Further analysis of EICV and ubudehe results (Feb-April 2007) • Compile costing using macroeconomic framework (Feb 2007) • Streamline sector M&E into workable annual reporting framework – elaborate Performance Monitoring Framework

17. Thank you