Natural Resources &

Environmental (NRE)

Governance in Ghana

Government of Ghana

WB, NL, DFID, EC, France

CEA Workshop

28 Oct 2008

NRE context in Ghana

NRE policy trade-offs - underestimated consequences

Government’s own Strategic Env Assessment neglected

6% growth - agriculture & private sector key

Environmental degradation counts for 10% GDP loss

Constraints on growth prospects

Rethink policy dialogue & operational support to NRE

Inconsistent consideration of NRE in-country

Shift to budget support, harmonisation &

alignment; country priorities & systems

Disengagement from NRE policy support

NRE marginal to "on-budget" support,

aid instruments & development policy

3 year NRE process & dialogue

Country environmental analysis & analytical gap-filling

• Language from stated GPRS II priorities

• Ministry of Finance to centre stage, workshops

• NRE back to machinery of Government

In-country dialogue

• Sector group, Consultative Group meetings

• Triggers for financing of forestry in general budget support

• Need for NRE engagement beyond general budget support

Cross-cutting priority in

Joint Assistance Strategy

• 14 donors

• 90% of ODA flows to Ghana

Country Environmental Analysishistory

2006: Country Env Analysis with France, NL & DFID

– Underlying causes of depletion/degradation in 4 sectors underpinning economic growth in Ghana

• Forestry & wildlife, agricultural soils, mining, urban environment

• policy/institutional/public expenditure analyses

– Policy/ institutional/ management recommendations

– Environmental health effects related to

water & air pollution

2005: Economic & Sector Work (WB,DFID) on NR Management & Growth Sustainabilityforestry, wildlife, agricultural soils, lake Volta, coastal

fisheries

NRs = Ghana’s golden goose

Need stewardship for long-term growth

1.57

0.560.27

3.49

0.16

2.1

1.4

0.35

0

1

2

3

4

Agriculture Wildlife Fisheries Forests Lake Volta Air

Pollution

(outdoor )

Air

Pollution

(indoor)

Water

Supply,

Sanitation

and

Hygiene

Mea

n E

stim

ate

(per

cen

tag

e o

f G

DP

)

• NRs = 15% GDP

• NRs = 25% Govt revenues

• Substantial source of

livelihoods

• Loss of NR stocks &

degradation of urban

environment cost

approximately 10% GDP

• Reducing potential growth

by 1% each year

Donor

Donor

Donor

Donor

Ghana Partnership Strategy

Joint Assistance Strategy

Multi-Donor (General)

Budget Support Prog Prog Prog

Development Partners & GPS coordination

Government & donor alignmentNew aid architecture

Growth & Poverty Reduction Strategy II

Ghana - initial constraints

Institutional capacity• Effectiveness of NRE country systems &

processes to address development agenda

Analytical work on NRE• Scarcity of analytical work to make economic case

for NRE

• Scarcity of institututional or expenditure analyses

Evolution of Ghana dialogue

Country Environmental Analysis

– Technical expertise, mission mode

– National & international consultancy

– Anchored in ENR sector group

– Drew on long-term institutional memories

– Coalition around economic impacts, links to GPRS II agenda of public financial management & governance

NRE Governance Programme

– Rent-seeking sectors (forestry, mining) + environment

– Artisanal issues, civil society, climate change

– Cross-Government working, with Finance at centre

– Multiple development partners

Sector programmes - SBS/SWAp

5 typical elements

Sector policy

in macro-framework

Public finance

management

Accountability &

performance

monitoring

Institutions &

capacities

Aid alignment and

harmonisation

Services &

enabling

environment

www.train4dev.net

Government

leads..

SBS/SWAp harmonisation & alignment

The ideal….

Do

no

r 2

Donor 3

Based on assumptions:

• Trust & personal ties

• Joint objectives or shared

cause

• Loyalty towards the country

group

• Everybody has a voice

•Once you are in, you stay in

www.train4dev.net

NREG preparation process (not linear)Government of Ghana

Development Partners

Missions,

virtual

networksNREG

task team

Ghana Poverty & Reduction Strategy II

Ghana Joint Assistance Strategy

Policy Dialogue – General Budget Support

Analytical work

NREG

Ministries &

Agencies

Civil society

Policy

matrices

Finance

(MoFEP)

High level

committee

Budgets &

fund flows

ENR Sector

group

NREG - evolving mix of financing

instruments?

Shift from

enclave projects

2006 2010 2015

Consolidating

accountability

Sustaining

successes

Multi-Donor Budget Support

€$ - MoFEP

Sector budget programmes

€$ - MoFEP & Ministries

Sector-aligned programmes

€$ - Ministries

Projects

€$ - Sector agencies

Paris linkages I - links

NREG leverage of other (vertical) financing

– Forestry (EC Voluntary Partnership Agreement on timber trade)

– Minerals (EITI, artisanal issues, revenues – oil & gas?)

– Environment (SEA, climate change, intersectoral dialogue)

– Complementary civil society & accountability facility

Central elements

– Anchored in sector dialogue & issues

– Public financial management focus – revenues & financial flows

– Overarching platform for dialogue – tripartite

– Consolidate on use of SEA in national planning & GPRS III

Paris linkages II – country-focus

Ownership

– Letter of Development Policy - statement of Govt priorities

– Finance coordinating inputs by line Ministries

– Medium-Term Expenditure Frameworks & financial flows

– Nat’ Dev’ Plan’ Commission guidance on sectoral planning

Alignment & harmonisation

– Single set of indicators, set by line Ministries & Agencies

– Finance commissioning related studies using country procurement mechanisms

– Multi-year budget commitment, annual assessments

– Flexibility in evolving indicators & targets

– Reinforcing country sectoral & national planning & systems, including SEA, PSIA, public financial management

Paris linkages III – challenges

National institutions

• Function separation & mandate clarity

• Weak strategic planning, M&E

National funding

• Fragmentation of budgets, lack of ‘‘openness’’,

available budget resources

• Lack of engagement with national budget

processes due internally generated funds

• Inconsistencies in financial reporting &

administration / audit

• Accountability of NRE expenditure & flows

(Parliament, Finance, civil society)

Paris linkages IV - challenges

High transactions & quality costs in set-up

• for both Government & development partners

• Bringing NRE agencies to speed with aid instruments

• Policy matrices & indicators – sector plans vs dialogue

• “Matrix fatigue” & “guided ownership”

• Civil society engagement sensitive

Harmonisation & alignment

• Incoherence in donor positions & practice & Paris

principles, esp. environmental assessment

• Donor procedures differ, only some flexibility

• Joint conclusions from joint assessments?

• Reconciling HQs with in-country offices & processes

Government

leads..

SWAp/SBS … occasional reality

Donor 3

May also be:

• Multiple objectives,

not always shared

• Distrust & rotation

• Loyalty towards HQ

& patrons

• Some have bigger

voices than others

•Suddenly you go

HQ and

hinterland

HQ and

hinterland

HQ and

hinterland

HQ and

hinterland

HQ and

hinterland

NGOs

www.train4dev.net

NGOs

Paris linkages V - reflections

Harmonisation & alignment

• Active sector group dialogue key

• General budget support useful for existing policies,

not reform

• Linkage to general budget support dialogue

problematical – need focus

• Anchor in dedicated staff & in-country processes

Capacity

• Local NRE targets & M&E focus, capacity

• Capacity for cross-sectoral policy coherence

• Division of labour – NRE expertise can disappear

• Multi-stakeholder dialogue & accountability

Background information

if required for Q&A

Typical challenges in SWAp/SBS

For donors

– take the back seat

– recognise own limited capacity to understand

& deal with complexity

– accept that ownership is more important than

perfection

– curb disbursement & visibility pressure

– patience

Typical challenges in SWAp/SBS

For governments

– open books & embrace dialogue – also on

sensitive issues

– build additional order in own house

– get results on the agenda, curbing patron-

client relations

– patience

Joint challenges in SWAp/SBS

• Initially higher transaction costs

• Get a critical mass of development

partners & sectors aboard

• Balance quick results with long term

capacity development

• Take decentralisation & reality outside

capital into account

Considerations for sector budget support

• In principle, most completely aligned modality

• Requires ‘adequate’ PFM

• May undermine PRS and wider coherence

• Fear of mismanagement

• Excessive donor focus on PFM

• Dialogue on policies & medium term outcomes, losing touch with ground realities

• May add inputs without addressing capacity constraints

• Longer term sustainability

Ghana - donor coordination on NRE

• 2001 Coordination

– on project basis around NR Management Programme

– not strong, focus on disbursement

– differing project requirements

• 2004 Sector group started

– information exchange

• 2005 Economic & Sector Work

– discussion at different level

– economic case, not " protection"

• 2006-7 Country Environmental Analysis

– platform for dialogue during workshops

• 2007-8+ NRE Governance sector budget support

Environmental degradation = ½ of ODA 2003-4 rates

180

30

115

135

270

0

50

100

150

200

250

300

Water &

Sanitation

O utdoor air

pollution

Indoor air

pollution

A gric ultural

Land

T imber

Mil

lio

ns U

S$

NREG objectives (2007-2009/’13)

Sub-sector Policy objectives

Environment • Improve cross-sectoral environmental management,

including climate change response

• Apply SEA to inform decision-making & mainstream

environment in sectors

• Improved EIA processes & compliance

Forestry &

wildlife

• Ensure effective law enforcement (trade agreement)

• Ensure predictable & sustainable financing of the forest

& wildlife sectors

Mining • Address social issues in mining communities

• Enhanced policy & regulatory framework & effective

coordination among key government agencies

• Improve mining sector revenue collection, management,

& transparency