Poverty Reduction Strategies

Status of the implementation of Poverty Reduction
Strategy Papers (PRSPs) in Southern Africa
4th October 2006


Introduction and Background

This paper highlights the status of the implementation of Poverty Reduction Strategy Papers (PRSPs) in Southern Africa. It also presents some of the key challenges and emerging issues around the implementation of such policies. It provides some pointers towards the need for governments to promote a policy mix of the “rights-based approach” (i.e. a needs-driven, social justice, and supply-side focus) to ensure social equity and a “sustainable livelihoods approach” (i.e. an assets-driven, market development, and demand-side focus) to create new wealth. The paper concludes that as countries move towards the next stage in the PRSP process; issues of ownership, financing, participation, and policy targeting become crucial to the success of the implementation of poverty reduction strategies.

According to the World Bank and IMF, Poverty Reduction Strategy Papers (PRSPs) describe a country's macroeconomic, structural and social policies and programs to promote growth and reduce poverty, as well as associated external financing needs. PRSPs are prepared by governments through a participatory process involving civil society and development partners, for them to be classified as country driven. They are also supposed to be medium-to long-term in perspective, comprehensive and results-oriented and contain a development framework that is partnership-oriented.

The strong pursuance of such policy frameworks by the World Bank and IMF date back from the early 1990s following strong campaigns and criticisms by global Civil Society Orgainisations (CSOs) known as Jubilee 2000, of the failure of these institutions policies around poverty and debt relief for developing countries. These campaigners also demanded that debts should be cancelled unconditionally and that any proceeds from debt relief should be channeled towards poverty reduction. During this same period, there were also a lot of discussions going on within the IMF and World Bank on how they could improve their consessional lending to Less Developed Countries (LDCs). These efforts were later intensified when James Wolfenson took over as President of the World Bank in 1995, as he pushed for a change in mindset among the Staff of the Bank in favor of doing more work on debt relief.

It is clear from various criticisms of the past World Bank/IMF policies that their policies coined under the phrase Structural Adjustment Programmes (SAPs) showed very little levels of citizen participation in the formulation and implementation of public policy. Thus, in 1997 following the Enhanced Structural Adjustment Facility (ESAF) evaluation, there was a strong recommendation on the need for greater participation and discussion in-country of any reform process associated with poverty reduction efforts. This idea was later reinforced in 1999 when the principles of transparency, ownership, and broad based participation were agreed at the G-8 Summit in Cologne, as key elements that would drive the poverty reduction agenda.

Ownership and sound macroeconomic policies rather than quantity of aid have now become the “catch phrases” in poverty debates and discussions and are purported to be the most influential factors to development and poverty reduction.

On the other hand, PRSPs are being seen as key instruments of accountability and transparency embedded in the aid relationship between donors and recipients. This relationship is characterized by a set of recipient government priorities (agreeing to holding them accountable for their results) while donors also have committed to providing predictable and harmonized development assistance that is aligned with country priorities – an approach that centers around countries developing and implementing poverty reduction strategies (PRS). (2005 PRS review, World Bank & IMF).

PRSPs have also become the country-level operational framework for progress towards the Millennium Development Goals (MDGs). Although the implementation experience has varied with regard to process and content—both across countries as well as within individual countries’ strategies—a key contribution of the PRS approach has been to focus attention on country-specific constraints to development. 

In many low-income countries, the PRS initiative has also resulted in a sharper focus on poverty reduction, a more open participatory process and greater attention to monitoring poverty-related outcomes.

Since 2005, the IMF and World Bank reveal that 49 countries have prepared and fully completed poverty reduction strategies. Just over half of these countries are in sub-Saharan Africa; and a similar proportion is heavily-indebted poor countries (HIPCs).

In terms of implementation timeframe, countries have been implementing their strategies, on average, for just over two and a half years. Several countries are in the process of revising their original strategies. Countries like Burkina Faso, Tanzania, and Uganda have already done so. Eleven more countries have produced interim strategies, and ten have initiated processes that could result in a full PRS.

In Southern Africa, five of the 14 countries in the sub-region have fully completed PRSPs, namely (in chronological order) Tanzania, Mozambique, Zambia, Malawi and Lesotho (See Table 1). Tanzania and Mozambique were part of the first wave of countries that adopted and finalized PRSPs, and in both cases a second generation Poverty Reduction Strategy was completed in 2005. The Democratic Republic of Congo has recently finalised its full PRSP, which has to be submitted and approved by the World Bank/IMF. In addition, the Angolan cabinet approved the country’s poverty reduction strategy (Estratégia de Combate à Pobreza, ECP) in early 2004 and is scheduled for a Joint Assessment by the World Bank and the IMF during the first quarter of 2006.  (Roberts, B, 2006).

Ben Roberts (2006) adds that there are ongoing discussions on the possibility of preparing a PRSP in Zimbabwe, but the current political situation has forestalled this from being developed. However, in April 2006, the government released the National Economic Development Priority Plan (NEDPP).

The remaining six countries are not eligible for World Bank/IMF supported Poverty Reduction Strategies due to their middle income status.

Southern Africa is here defined to include: Angola, Botswana, DRC, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.

Table 1: Status of National Poverty Reduction Strategies in Southern Africa

Southern African countries finished or finalizing Poverty Reduction Strategy Papers (PRSPs) (January 2006)

Country a

I-PRSP Completionb

PRSP Completion

First progress report

Second progress report

Third progress report

Second PRSP Completion

HIPC Country

Tanzania

Mar-00

Oct-00

Aug-01

Mar-03

Apr-04

Jun-05

Yes

Mozambique

Feb-00

Apr-01

Feb-03

Mar-04

Jun-05

Mar-05

Yes

Zambia

Jul-00

Mar-02

Mar-04

Feb-05

n.a

n.a

Yes

Malawi

Aug-00

Apr-02

Aug-03

May-05

n.a

n.a

Yes

Lesotho

Dec-00

Jul-05

n.a

n.a

n.a

n.a

No

D.R.C.

Jun-02

n.a

n.a

n.a

n.a

n.a

Yes

Angola

Feb-04

n.a

n.a

n.a

n.a

n.a

No











Notes: a Countries are listed chronologically, based on the date of PRSP completion.
bThe dates in the table refer to those on the actual documents rather than dates of publication on the IMF/WB websites.
Source: Adapted from Roberts (2006)

Southern African countries not eligible for or not having initiated PRSPs (January 2006)

Country

Classification of economies 2005 a

Status of National Poverty Reduction Strategy

Botswana

UMC

National Poverty Reduction Strategy

Mauritius

UMC

National Action Plan for Poverty Alleviation (APPA 2001)

Namibia

LMC

National Poverty Reduction Action Programme (NPRAP 2000);
National Development Plan (NDP2, 2001-06)

Seychelles

UMC

South Africa

UMC

Reconstruction and Development Programme (RDP 1994);
Growth, Employment and Redistribution (GEAR 1996);
Integrated Sustainable Rural Development Strategy (ISRDS, 2000); Urban Renewal Programme (URP, 2000)
Accelerated and Shared Growth Initiative of South Africa (ASGISA, 2006)

Swaziland

LMC

Poverty Reduction Strategy and Action Plan (PRSAP, 2005)

Zimbabwe

LIC

The PRSP process has been stalled due to the current political situation in the country. However, in April 2006, President Mugabe introduced National Economic Development Priority Plan (NEDPP)


a This classification is derived from the 2006 World Development Report (World Bank, 2005:291). Economies are divided among income groups according to 2004 GNI per capita, calculated using the World Bank Atlas method. The groups are: low-income economies (LIC), $825 or less; lower-middle-income economies (LMC), $826-3,255; and upper-middle-income economies (UMC), $3,256-10,065 according to 2004 GNI per capita.
Source: Adapted from Roberts (2006)

2. Key issues in implementation of PRSPs in Southern Africa: Challenges and Emerging issues

In Southern Africa, the main issues that come to light under the implementation of PRSP processes fall into four main categories:

  1. Ownership of the PRSP programmes and processes
  2. Financing of poverty strategies in the context of donor harmonization and alignment
  3. Participatory processes related to implementation of poverty programmes
  4. Policy targeting and impact on povert

2.1. Who owns the PRSP programmes?

Although a considerable number of countries are now entering the 2nd phase of PRSP implementation, the questions that still remain unanswered are those around who owns the PRSPs programmes and which development plan a country is supposed to implement? The emerging trend is that most countries have developed PRSPs documents along side other national development plans, some of which have been incorporated into one document but for most countries, these documents still remain separate. The fact that these documents are not harmonized clearly shows that there is no ownership of the policy programme/process and this has major implications for implementation – which programmes would the countries be implementing? The World Bank and IMF also acknowledges that “where PRSPs are developed in parallel with other documents, their role in government decision-making is often unclear, although there have been encouraging shifts toward consolidation of plans in some countries.”

In addition, “there are also cases where ministries of finance have not been fully engaged in the PRSP process, which undermines the very important link to the budget. Sometimes new “PRSP units,” often dependent on external financing and assistance to manage and draft the PRSP, are created on top of the existing government structures.”

What is also fundamentally problematic is the fact that the Boards of the Bank and the Fund still play a role in endorsing what a “good or bad” PRSP should look like or be which in itself continue to undermine full ownership of these strategies.

2.2 Financing of poverty strategies in the context of donor harmonization and alignment

There is general agreement that there is an urgent need to improve donor alignment and harmonization around national strategies, in order to achieve successful implementation of PRSPs. Aid that is provided in an effective manner can reinforce, rather than undermine domestic accountability. This requires alignment, harmonization, and predictable aid flows that take into account domestic budget cycles.

The World Bank 2005 PRSP review finds evidence in some countries that donors have internalized the principle of aligning their programming to PRS priorities, a necessary prerequisite to actually adapting donor programs. This is now happening in a range of countries, including, among others, Ethiopia, and Mozambique. Effective implementation of the harmonization agenda is also spreading—beyond some of the coordinated practices mentioned above, in some countries such as Tanzania and Uganda where donors are developing joint country assistance strategies.

In terms of aligning donor support to CSO coordination and engagement in public policy processes, some key donors have embarked on an experimental initiative that allows for their resources to be channeled through an intermediary based in the region e.g the creation of agencies such as the Southern Africa Trust which act as an intermediary for channeling resources aimed at supporting organizations and processes that aim at deepening and widening engagement in policy dialogue with a regional impact on poverty.

Despite these efforts by donors to better coordinate their aid,  many countries in Southern Africa are still experiencing huge debt servicing obligations to the tune of $15million per annum and trade losses due to unequal trading opportunities, which have made their resource gap too huge too meet their activities contained in their poverty reduction strategies. (Kalima, B, 2001).

There is also growing concern that governments are spending a lot more time to adhere to the stringent reporting guidelines demanded by their move towards giving direct budget support as opposed to project support. There are claims of government exercising more accountability to the donors as opposed to the poor people in their own countries.

2.3 Participatory processes in implementation of PRSPs

In PRSP 1, participatory mechanisms in the formulation and drawing up of the PRSPs were much clearer and enabled different CSO actors, with varying degrees of success, to participate in discussions or committees which were responsible for drawing up these programmes. Emerging trends clearly show that the new challenge is that there has been a failure to maintain CSO participation during implementation. There has typically been a drop-off in engagement early on in the implementation phase.

There is a growing sense and urgency among different actors to deliberately define and carve out roles for themselves but these have been met with yet other obstacles of lack of institutionalized platforms for participation. For Non-Governmental Organizations they have continued to play a role of being suppliers of information and watchdogs in monitoring efforts of governments to live up to their PRSP commitments. However, what is now evident in some selected countries like Malawi, Zambia and Mozambique is the increasing participation in Public Expenditure Monitoring (PEM) although some civil society organizations still lack basic budget skills which limit effective engagement, and lack reliable and useful fiscal data. A continuing criticism from CSOs is that they are asked to react to existing programs rather than contribute to an overall rethink of the government’s programmes. In addition, some policies which critically underpin the PRSP, in particular, the macroeconomic framework, are not sufficiently open to public debate.

For the private sector, they are actively involvement in consultations with governments and, in some cases, through more formal mechanisms as they increasing get the tenders for various projects in the health, education, water sectors.

There is still limited involvement of the trade unions despite their petitioning governments, sometimes with International Labor Organization or other support groups.

Voices of the marginalized groups in society still remain excluded although the majority of recent PRSPs also point to an increased interest and involvement of parliamentarians in PRSP preparation and envisage a more significant role for the legislature during implementation.

The challenge remains, however, for governments to create institutional mechanisms to ensure effective communication to, and feedback from, civil society, as well as delineate clear roles for civil society actors to play otherwise the pace of implementation will continue to be considerably slower than expected.


Table 2: CSO Participatory approaches in PRSP Implementation in selected countries

Country

Approach

CSO activity

Challenges

Malawi

Participatory public expenditure surveys

Malawi economic Justice Network (MEJN) analyzes the national budget on a yearly basis

Little private sector involvement

Mozambique, Malawi, Tanzania, Zambia

Budget Tracking/Budget Analysis and in some countries in Latin America they refer to them as “social audits”

CSOs are now analyzing and tracking budget decisions

These are traditionally technical exercises that do not have dynamic links to implementation. Uganda and Tanzania have been cited for best practice in expenditure tracking in Africa.

None in Southern Africa

Citizen Report Cards

Tracking and evaluating quality of service delivery in municipalities/public services in a fairly technical manner, including poor people’s views, using criteria they themselves define. There is usually a wide public dissemination of the results

CSOs do not have the capacity to cover all issues relevant to PRSP implementation.

While focusing on key aspects is realistic, the civil society review process risks getting lost in too many issues

Zambia

Parliamentary Oversight

Through parliamentary committees which have been established  especially in the areas of budget execution providing support in accountability and resource allocation, overseeing draft decisions

Implementation of decisions face both technical and political constraints

Malawi, Tanzania & Zambia

Participatory Poverty Assessments (PPAs)

Poverty monitoring and poverty data collection – this exercise influences the poverty analysis for the PRSP

No explicit commitment from governments to use them regularly for  monitoring

While CSOs may introduce some data in the PRSP-debate, it risks remaining under-utilized by decision-makers, if the lobby and advocacy efforts surrounding the CSO reviews are not strong enough

None in Southern Africa

Community Monitoring

Involving people at grassroots levels monitoring public service delivery through them defining poverty indicators and collecting and analyzing the data themselves at local level – mainly in areas of health and water systems

 

Mozambique only

Poverty Observatory (composed of civil society, central ministries, private sector, donors, parliamentarians and poor peoples' organizations)

CSO participation in progress Reports and PRSP Review. The government of Mozambique adopted the CSO Poverty annual report as their own progress report.

When civil society is strong enough, they can draw up their own progress review of the PRSP  - but majority of them still lack this capacity

Source: Own Compilation – various sources.

It is clear from Table 2; that instruments  and approaches used for PRSP implementation and monitoring are underway in most countries but have not been fully utilized or institutionalized by CSOs. In countries where these approaches have been set up participation still remains in the confines of the “elite” type NGOs without necessarily involving the very poor people who are most affected by poverty. There is need to ensure that the voices of the poor are well articulated through the use of these techniques.

2.4 Policy targeting and impact on poverty

Unlike the Millennium Development Goals (MDGs) which have long term targets and indicators, PRSPs are have no specific required set of indicators although broadly they present an opportunity for countries to design policy and institutional reforms to strengthen delivery of basic services, promote growth, and reduce poverty, and consider their implications for the levels and modalities of external financing. 

Also PRSPs are expected to be framed against the backdrop of the MDGs while taking into account initial conditions and national priorities. The reality on the background is such that there is misalignment between the PRSPs plans and the MDG targets. PRSPs present poverty reduction strategies milestones over a period of three to five years, while the MDGs are global targets for 2015. The main challenge for most less developed countries has been the difficulty in translating medium-term goals, which by their nature are subject to significant uncertainty, into national budgets year by year on the basis of actual policies and available financing.

Many countries continue to have difficulties in prioritizing their PRSPs. Most of the focus areas in the PRSPs have ended up being a wish list with little prioritization which has resulted in inadequate focus, diminishing the potential value of the documents for both national authorities and donors.

To the contrary, the World Bank and IMF claim that over the past five years, there is some evidence of increases in poverty-reducing expenditures. Data for a sample of 27 countries that reached the Decision Point under the HIPC Initiative suggest that poverty-reducing spending increased by close to two percentage points to 8.3 percent of GDP between 1999 and 2004 (Table 3).

Table 3: Poverty-reducing expenditure: 27 countries that have reached HIPC decision points

 (in percent)

1999

2000

2001

2002

2003

2004

Ratio of poverty reducing expenditure to government revenue

African Countries

38.6

39.2

41.3

44.9

47.8

48.7

Latin American Countries

47.6

46.5

49.4

50.8

51.2

51.4

Total

40.9

41.3

43.5

46.4

48.5

49.3

Ratio of poverty reducing expenditure to GDP

African Countries

5.5

5.4

5.8

6.6

7.3

7.8

Latin American Countries

10.8

9.9

10.3

10.6

10.7

11.2

Total

6.4

6.3

6.7

7.4

7.9

8.3

Source: IMF/World Bank (2005)

Table 3: Poverty-reducing expenditure: 27 countries that have reached HIPC decision points

It is important to note though that public spending does not necessarily imply better results or necessarily indicate poverty reduction; although shifts in budget outlays can be early indicators of PRS implementation. The poverty level estimates stand at over 40% of the population of 230 million living under abject poverty in the SADC region, (SADC Summit, 2006).

3. What policies should drive poverty reduction efforts in Southern Africa?

3.1 Rights based approach and sustainable livelihoods

It has become apparent that the process of policy development to address poverty has to be accompanied by a system or mechanisms that ensure that the policies developed are effective. Policies are the outcome of processes of bargaining and negotiation between different interest groups of varied power and influence. The effectiveness of policies to address poverty should at once address both the supply side and the demand side of development inputs.

In a context of extreme inequality and chronic poverty such as that experienced in  Southern Africa, there is need for a mix of a “rights-based approach” (i.e. a needs-driven, social justice, and supply-side focus) to ensure social equity and a “sustainable livelihoods approach” (i.e. an assets-driven, market development, and demand-side focus) to create new wealth. This should ensure that an adaptable and responsive policy environment informed by the real experiences and practices of people living in poverty is developed. Ultimately, efforts to overcome poverty are most effective when resources are placed directly where poverty is and that social, economic, political, and human development are all essential to overcoming poverty.
With this challenge come opportunities for new partnerships and alliances, and new forms of advocacy for better public policy. There are also risks.
Effective policies that have strong popular support are a political outcome of negotiation and bargaining amongst many different interests and constituencies in society. These processes are crucial to building democratic participation and to creating accountable, responsive governance. However, if the voices of the poor are not asserted in these processes, other interests are likely to dominate in both the design and implementation of policies.
Thus there is need to:

  • develop and strengthen a vibrant, autonomous CSOs which will ensure that political processes and institutions are responsive to the needs of people and their voices asserted and;
  • build a developmental state (notwithstanding the fact that most states in Southern Africa are emerging democracies, their institutions are often fragile, lack capacity to be responsive and accountable to civil society); as this is more likely to be responsive to the needs of its citizens than small elites.

3.2. The role of Agriculture in poverty reduction

The discussion on the role of agriculture in poverty reduction is anchored within a case study of Zambia conducted by the Civil Society for Poverty Reduction (CSPR) on “Targeting small farmers in the implementation of Zambia's PRSP - An assessment of the implementation and effectiveness of the Fertilizer Support Programme, (CSPR, May 2005).
This report clearly reviews that Zambia’s Fertilizer Support Programme has had very little impact on food security and poverty reduction due to a number of factors which include; inconsistent supply of inputs and sometimes fertilizers arriving earlier than seed; delays in input supply; few buyers and poor transport facilities; inadequate supply of farm inputs; poor marketing arrangements which includes delays in payment to farmers for farm produce during the marketing season;  lack of or non- use of satellite depots; poor record keeping of the fertilizer applicants and delivery records; high input prices and low prices for farm produce; and lack of monitoring and evaluation of the programme.
The report suggests that if the above issues were dealt with appropriately, Zambia’s agriculture sector would contribute significantly to addressing the food security problems.

By citing this example, this paper does not suggest that this is the entire picture for the whole of Southern Africa .The important point here is that the supply factors driving the agricultural industry in most of Southern African countries are just as important as the demand factors and these have to be carefully examined and cannot be underestimated. In this case, despite the Fertilizer Support Programme being in place, the lack of timely supply of inputs to farmers such as fertilizer has had drastic effects on the Zambian government’s efforts to dealing with food insecurity and poverty. Thus, it is important that these factors are taken seriously in the fight against poverty.

3.3 Adopting responsive policies and processes

On the other hand, the Global Monitoring Report 2004  also suggests areas for particular attention for the three main groups of actors involved in poverty reduction efforts, namely developing countries, developed countries and international financial institutions:

Priorities for developing countries:

  • improving the enabling climate for private sector activity
  • strengthening capacity in the public sector and improving the quality of governance 
  • scaling up investment in infrastructure and ensuring its effectiveness
  • enhancing the effectiveness of service delivery in human development

Priorities for developed countries:

  • sustaining stable and strong growth in the global economy
  • ensuring a successful, pro-development and timely outcome of the Doha Round
  • providing more and better aid
  • improving policy coherence for development

Priorities for international financial institutions:

  • refining and strengthening institutional roles in low-income countries
  • furthering progress on the results agenda
  • improving selectivity and coordination of agency programs

I have decided to add a fourth category that talks to priorities for CSOs which would include but not exclusive to:

  • developing their capacity in building their knowledge around  analyzing and monitoring  poverty trends -  after all emphasis is now being placed upon grounding the formulation of poverty strategies on poverty analysis and upon ensuring that the policies and projects which are supported by donors/development partners are those which promise the largest impact in terms of poverty reduction
  • push for the institutionalization of their participation (eg the Mozambique Poverty Observatory) in official processes on poverty reduction strategies
  • build a regional agenda around poverty interventions that is informed and driven by experiences of  the poor by which the negative impact of certain policies is most felt

3.5 Monitoring and Evaluation of PRSP implementation

In terms of monitoring and evaluating the implementation of PRSPs, there is need to consider cost effective methodologies to monitor poverty (eg Poverty Mapping exercises in some countries have taken a long time to complete) – countries may want to explore the example of South Africa, where they have used Integrated Household Surveys, and other sources to provide maps of the poverty scale and also use of simple surveys that are done by some selected CSOs like the Afro Barometer.

In conclusion, it is clear that as countries move towards the next stage in the PRSP process issues of ownership, financing, participation, and policy targeting becomes crucial to the success of the implementation of poverty reduction strategies.

References

Civil Society for Poverty Reduction (CSPR), 2005, “Targeting small farmers in the implementation of Zambia's PRSP - An assessment of the implementation and effectiveness of the Fertilizer Support Programme, Zambia.

Global Monitoring Report, 2004
IMF & World Bank, 2005
Kalima, B, 2001, “PRSPs, SAPs in disguise?” , AFRODAD
Roberts, B, 2006
SADC Summit Communiqué, 2006, Maseru, Lesotho
World Bank, 2005 PRS Review




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