Business Case and Intervention Summary
Intervention Summary
Title: Strengthening Economic Governance
What support will the UK provide?
The UK will provide £7.1 million over a three year period to a set of programmes that aim to improve
economic governance in South Sudan. These programmes are the Capacity Building Trust Fund
(CBTF), the International Monetary Fund (IMF) Trust Fund, and the World Bank High Frequency
Survey, together supported by a small ‘fragility response’ fund. Provision is also made for funds for
monitoring and evaluation.
Why is UK support required?
What need are we trying to address?
Economic governance in South Sudan is very poor, with under-developed macroeconomic policy and
weak management of the public finances. This contributes to ineffective use of resources, corruption, a
poor climate for doing business and limited accountability of Government to its people for the way in
which the country’s resources are used. One of the major drivers of these problems is low capacity – at
both an individual and institutional level. The skills, policies, strategies, systems and processes
required to undertake economic governance are lacking across the board, and while progress has
been made since 2005, much more needs to be done. Legislation and regulations are also weak or
lacking in many areas. The UK will assist the Government of the Republic of South Sudan to acquire
the technical capacity necessary to improve governance of the country’s economy.
What will we do?
The UK will provide funding to a set of complementary initiatives to improve economic governance.
This includes support to:
1. Core resource allocation and spending institutions, as well as institutions of accountability, to
promote stronger public financial management.
2. Core macroeconomic management institutions, particularly the Bank of South Sudan
3. The National Bureau of Statistics, to enhance their ability to support evidence based planning
and budgeting, a core component of public financial management
The support will primarily be provided in the form of technical assistance and training, as well as the
acquisition of new physical systems, such as IT. In addition a small sum will be retained in order to
‘fragility proof’ the three year programme. In a quickly and dramatically changing context, flexibility to
respond to emerging economic governance challenges is vital. Funds are also earmarked for
monitoring and evaluation. All financial support will be backed up with political engagement and
support for improvements in economic governance, led by the Head of Office and Ambassador, to
bolster political will for change.
Who will implement the support we provide?
Support will be provided to:
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-
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The Joint Donor Office (JDO), as the managers of the Capacity Building Trust Fund, which will
oversee the work of the first component described above. Implementation of projects will be
undertaken by a range of contracted agencies.
The IMF will lead the macroeconomic capacity building work via their South Sudan Trust Fund,
drawing upon staff based at headquarters, regionally and locally, as well as contracted
technical assistance.
The World Bank, who will work closely with the National Bureau of Statistics to implement the
data gathering project, the South Sudan High Frequency Survey.
What are the expected results?
The proposed outcome for the programme is that key institutions of economic governance have
strengthened knowledge, skills, systems and processes. The intended impact is better economic
governance. Specific results include (though are not limited to):
1. Capacity Building Trust Fund (CBTF)
Core Skills Training. The CBTF will support a number of ministries at the state and national level with
one year of training in core skills, including English language and computer literacy.
Payroll. Payroll system expanded and sustained, via support to the Ministry of Labour, Public Service
and Human Resources Development (MoLPSHRD) and Ministry of Finance and Economic Planning
(MoFEP).
Pensions. Pension system developed and implemented, via support to the drafting of legislation and
establishment of an independent South Sudan Pension Fund, as well as its ongoing operation.
Human Resource Information System (HRIS). HRIS developed and implemented, including by
being rolled out to all state ministries.
Accountability. Enhanced capacity of selected GRSS accountability institutions to discharge their
functions. A design mission will be conducted in mid-2012 to determine the nature and extent of
support to be provided to the South Sudan Anti-Corruption Commission and South Sudan National
Audit Chamber.
2. International Monetary Fund
Macroeconomic training. The IMF Trust Fund will support on the job as well as more in depth training
for a range of civil servants in macroeconomic topics. This will be directly related to their day to day
tasks and responsibilities
Policy advice and mentoring. Advice from TA as well as visiting missions will feed into ongoing policy
debates, such as on revenue collection and exchange rate management. This will result in new and
enhanced policies in various areas, as well as stronger implementation.
Monetary statistics. The ability to compile and use monetary statistics will be supported, and the Bank
of South Sudan will begin to produce monetary statistics reports to inform their own activities as well as
wider macroeconomic management.
3. World Bank High Frequency Survey
Training of National Bureau of Statistics staff. Training will be provided to enumerators and
statisticians in practical, up to date, data collection, analysis and dissemination techniques.
Data. Data from the High Frequency Survey will be made available to a range of stakeholders in an
easy to use format
Support to data demand. Support to NBS to consider and operationalize a strategy to increase the
demand for and use of their data.
Together these results (along with other activities to support economic governance that will respond to
new issues and capacity gaps as they emerge) will contribute to institutions of economic governance
having people will stronger skills and abilities as well as effective systems that can enable improved
performance. This should, in turn, enable better economic governance.
Strategic Case
A. Context and need for a DFID intervention
South Sudan Context
South Sudan, the newest nation in the world, came into existence on 9 July 2011 following decades
of civil war that left over 2 million dead, many more displaced, a population dependent on
humanitarian aid for their survival and a highly militarised, fractured society. The Government of the
Republic of South Sudan (GRSS) inherited none of the institutions of a state and possessed virtually
no infrastructure and very limited human resources.
The six years since the Comprehensive Peace Agreement (CPA) have seen some important
progress. The basic institutions of a state have been established, and most of the multiplicity of
military forces in the South have been incorporated, if not fully integrated, into a single military
structure. The Republic of South Sudan (RSS) formally seceded from the Republic of Sudan (RoS) in
July 2011, following a peaceful referendum in January 2011 although there are still contested areas
along the border.
However, South Sudan faces unprecedented challenges including high levels of poverty, inadequate
government capacity and poor governance, an almost exclusive reliance on oil income (currently
suspended), high unemployment, ongoing significant internal conflicts and continued North/South
tensions, citizen insecurity, weak rule of law and very limited infrastructure.
As a result South Sudan is one of the poorest countries in the world. Years of conflict causing erosion
of physical and social infrastructure and death and displacement of millions of people have made
South Sudan one of the most underdeveloped regions in the world. Poverty is widespread. Just over
half (51%) of the 8.3 million South Sudanese live below the national consumption poverty line , most
in rural areas (92.5%). Of the 1.4 million people who live in urban areas 24% are below the national
consumption poverty line.
Prospects for progress have been seriously undermined recently by ongoing disputes with Sudan
over border areas, oil and citizenship issues. This tension with Sudan has led the Government of the
Republic of South Sudan (GRSS) to shut down their oil wells which were providing around 98% of
government revenues. Negotiations have recently made important progress, with the terms of a deal
on oil agreed but implementation of this agreement, as well as progress towards more normalized
relations, depending on progress on other outstanding CPA issues. If agreement is not reached it is
possible that the Government’s financial resources could run out as soon as next month. This will
potentially put in jeopardy many, if not the vast majority, of the gains made since the signing of the
CPA.
The UK has historically been – and remains - a key player in South Sudan, with South Sudan a
priority country for DFID. The UK was heavily involved in the negotiations that led to the CPA) in
2005 and has strongly supported CPA implementation. In addition, the UK is the second largest
OECD bilateral donor in South Sudan after the USA. Regionally, UK interests include: progress
towards the MDGs; resolving conflict; bolstering stability; accelerating sustainable growth and
development; mitigating the impact of climate change; tackling migration and countering terrorism. A
peaceful, stable and prosperous South Sudan is important to UK interests in the region and the UK
continues to be involved in current negotiations between Sudan and South Sudan including over
negotiations regarding the oil and contested border areas.
Economic Governance Context
While the majority of the basic institutions of the state are now in place, these institutions are
currently unable to drive development in South Sudan. This stems in part from low levels of generic
and job-specific skills and knowledge. This lack of individual skills contributes to weak systems and
processes - both hard (such as IT) and soft - that should form the building blocks that underpin basic
governance tasks. This twin lack of capacity is seen across a wide range of policy areas, including
the crucial area of economic governance.
‘Economic governance’ is centered upon public financial management (PFM). PFM ensures that
finances are planned, directed and controlled to meet public service goals. This covers the whole
budget cycle, as shown in the figure below, including policy based budget preparation, budget
execution and expenditure control, accounting and reporting, and external scrutiny and oversight
(such as that carried out by the Auditor General and the Anti-Corruption Commission).
Figure one: stages of the PFM cycle
• Annual reporting
• External audit
• Legislative
scrutiny of
accounts
• Publication of
accounts
• Social policy
• Economic policy
• Fiscal policy
• Debt policy
Policy
review
Reporting
and audit
Judicial
Authorities
• Transaction
recording
• Accounting
• Budget
monitoring
• Internal
audit
•
•
•
•
•
Inspectorates
Accounting
and
monitoring
Treasury mgmt
Payroll mgmt
Procurement
Internal control
Mgmt
arrangements
• Risk mgmt
• Asset mgmt
Accountant
General
Cabinet /
President’s
Office
Cross-cutting issues:
accountability and
transparency
PAC / Parliament
AntiCorruption
bodies
Budget
execution
SAI
Revenue
authority
MoF
Strategic
planning
• Macroeconomic
planning
• PRS
• MTEFs
• Sector
plans
Ministry of
Planning
Line
ministries
Budget
preparation
• Annual budget
• Needs Based
Service Plans
• Legislative
scrutiny of
budget
Alongside this, economic governance also includes related elements of economic management, such
as inflation and exchange rate management. It is vital that the government is has the capacity to plan
and control policy in these areas, which are related to the management of public finances but go
beyond it.
The institutions charged with these tasks of economic governance have some stronger components.
Some of the senior leadership of the key institutions - such as the Ministry of Finance and Economic
Planning (MoFEP), the Ministry of Labour, the Auditor General and the Anti-Corruption Commission are capable and dedicated – as are some of the more junior staff across the range of economic
governance institutions. This is due in part to the institutions having gained some of the most
educated and skilled staff available, but also due to previous government and donor efforts in this
area since the signing of the Comprehensive Peace Agreement. Support has been political and
programmatic, with strong Troika (UK, US and Norway) engagement on accountability, amongst
interventions by others. There are also a range of donor-supported initiatives of note, including:
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The Capacity Building Trust Fund, which has supported public administration and public
financial management capacities in a number of key economic governance institutions at
central and state level between 2005 and 2012. This has helped to build both the skills of the
personnel working there as well as the systems that they use to undertake their work. Key
successes include strengthening the public service payroll system, improving local
government public financial management, and providing mid-level civil servants with training
in core administrative and financial skills.
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USAID’s support to economic governance through the Strengthening Institutional Structures
in Southern Sudan project, currently implemented by Deloitte. Advisers have been placed in
key ministries and institutions, including MoFEP and the Bank of South Sudan (BoSS). This
support has been central to developing many of these institutions, helping to set policy
direction, put in place processes and systems, and working with local counterparts to build
capacity. Some examples of areas of focus include establishing an institutional structure for
BoSS and implementing the Integrated Financial Management Information System (IFMIS).
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UNDP has supported a wide range of key economic governance institutions - MoFEP, the
Anti-Corruption Commission and the Auditor General. Perhaps most significant has been
work with state level Ministries of Finance to put in place state level PFM systems, in close
collaboration with USAID and CBTF. UNDP have also undertaken important support to the
National Bureau of Statistics, with staff training, secondments, policy advice and technical
assistance.
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The ODI Budget Strengthening Initiative (ODI/BSI), which addressed key PFM processes,
working closely with Deloitte technical assistance in MoFEP. This included budget setting and
budget execution, and key successes have included putting in place a system to ensure that
budget commitments to spending ministries are actually met. ODI/BSI is funded by DFID.
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DFID is also in the process of starting up a programme providing technical support to the
South Sudan Anti-Corruption Commission to enhance its core organisational capacity and its
ability to fulfil its mandate
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Support from Norway to the National Bureau of Statistics, including on the National Strategy
on the Development of Statistics, and to MoFEP with macroeconomic and budgetary analysis,
focused in particular on accounting for and managing oil revenues.
Together this combined donor and government effort has put all the basic institutions of public
financial management and wider economic management in place. However, despite the progress
that has been made, and the bright spots in some areas of economic governance capacity, South
Sudan is still far from having a set of functional economic governance institutions.
South Sudan’s economic governance record
Because of these constraints, South Sudan has an exceptionally weak record of economic
governance. This is clear from a number of reports – for example the Auditor General’s recent
reports, which highlights the government’s inability to manage public funds, and DFID’s own
Fiduciary Risk Assessment, which rates South Sudan’s risk as ‘high’ (the highest possible rating). It
is also seen from assessment of some key components of South Sudan’s economic governance
performance.
Firstly, the government has had little control over expenditure. Budgets have been passed very late –
the 2011/12 budget was approved by Parliament nine months after the start of the financial year –
and not adhered to in any case after approval. Total expenditure, expenditure by Ministry,
expenditure per line item have all varied dramatically – frequently by up to or above 100% - as
compared to amounts budgeted. For example in 2011 a number of Ministries dramatically overspent,
including MoFEP (645%), the Office of the President (275%), and the Ministry of Humanitarian Affairs
& Disaster Management (213%). A further 7 agencies spent over 150% of their budgets.
A similar pattern is evident at an aggregate level, as shown in the figure below. This depicts the
budgets for each of the years since the CPA was signed, alongside actual outturn, or budget
performance, in each of those years. Total revenues for each year are also provided, which show
that expenditure has followed revenues rather than the budget.
This poor budget performance is driven by a combination of factors, including political pressure to
spend, limited understanding of the implications of weak expenditure control, and lax procedures for
allocating and spending money. Until recently MoFEP had neither the skills nor the IT systems
required in order to be able to ensure individual Ministries received their budgeted allocations.
These lax systems not have not only promoted fiscal looseness, however, but also created significant
space space for corruption. This is widely believed to have been rife, with the President recently
asserting that $4 billion is missing, presumed stolen, since the CPA. This constitutes up to 1/3rd of all
oil revenues from this period.
Secondly, the Government has had no medium or long term plan for revenues or expenditure.
Limited progress has been made to develop non-oil sectors and promote non-oil revenues, at least
until the decision to shut oil production down was made. This resulted in 98% dependence on oil
income to fund the budget. Despite the size of South Sudan’s oil revenues making it one of the
richest countries (per capita) in the region, very little oil income has been saved. These trends
combine to give the very narrow gap between revenues and expenditure depicted in the figure
above.
Thirdly, inflation has received inadequate policy attention, which has seen it - partly as a result of the
high uncontrolled expenditure laid out above - running at very high rates. It hit 80% in May, as shown
in the figure below. Should the oil shutdown continue, driving the continued depreciation of the South
Sudanese Pound (see point four) it is likely to only rise further.
Fourth, the exchange rate has been poorly managed. There is little clarity about what the exchange
rate regime actually is, as it is not clear that the Central Bank Act has ever actually been followed.
There is also serious concern about the dual exchange rate that has emerged, including about the
corruption that could result. The official rate remains at 2.95 SSP : 1 USD (sold at 3.15 to allow for a
mark-up for banks and FOREX bureaus), but the black market rate has generally been at 3.5 or
above – a sizeable mark up / profit margin for those who can access finance at one rate and sell at
another. Since the oil shutdown it has climbed fairly steadily past the previous high of 4.2 and
currently sits at about 5.4 SSP : 1 USD, as shown in the figure below.
Concerns about exchange rate management have deepened with the oil shutdown not only because
of the growing premium’s corruption implications, but also because the increasingly challenging
economic context makes appropriate exchange rate management significantly more difficult. While
some elements of the Central Bank’s response to the oil shutdown have seemed sensible, the official
exchange rate has not been changed, and there appears to be significant reluctance amongst Bank
management to consider in any depth what the appropriate regime may now be, or engage in a
substantive discussion of this issue with partners such as the IMF.
Without improvement in these areas South Sudan will not be able to sustainably develop.
Macroeconomic stability – for which sound fiscal, inflation and exchange rate management is
required – is essential to broader stability and growth. This is perhaps one of the best established
facts in development, and is born out by neighbours’ experiences. Uganda is particularly instructive,
having experienced high inflation which decimated the economy (alongside political turmoil and
conflict), followed by macroeconomic stability that produced immediate growth, plus a rise in external
financing.
Development is also hampered in other ways by government’s inability to exercise effective
economic governance. If GRSS cannot reliably allocate its money to the purposes set out in its
development plans, those plans will fail. Plus, the lack of accountability implicit within in poor
economic governance is likely, over time, to promote corruption, erode confidence in the political
system, and make policymaking less responsive to realities on the ground. These are all likely to
pose profound developmental problems for a fragile, conflict ridden country like South Sudan.
Need for an Intervention
It is crucial therefore that government’s ability to provide good economic governance is strengthened,
covering relevant skills and systems across a range of institutions. This includes capacity to manage
the economy in institutions such as the Ministry of Finance and Economic Planning and the Bank of
South Sudan. This is one side of successful economic governance – the supply side. The other
component is the demand for good economic governance, which needs to be met through
accountability within government and externally, including via the Audit office and Anti-Corruption
Commission. Systems and skills are being developed, but there is clearly a much longer way to go
(alongside support to the legislative framework and addressing the inadequate budget allocations
provided to accountability institutions.)
Poor economic governance performance, and poor underlying skills and systems are one component
of the need for an intervention by DFID. Alongside this, however, is a gap in donor provision. A
number of the key programmes providing support in this area are planned to continue, in particular
the USAID funded work, UNDP’s support, Norway’s contributions, and the ODI/BSI work funded by
DFID. CBTF, however, requires additional funds if it is to maintain a similar sized presence,
potentially leaving an important gap. It is therefore important to consider whether there are additional
interventions that could be put in place to complement the work already being done.
The context, and South Sudan’s state-building project, has been fundamentally affected by the oil
shutdown, which has removed 98% of GRSS revenues and the country’s major source of foreign
exchange. This is causing a range of serious problems, including - most relevant to this business
case – civil servant salaries which are likely to fall, or go unpaid, thereby making it less likely that
they will be present and motivated in their work.
However, while it makes economic governance work more challenging, austerity has created a much
stronger demand for improvements. Some Ministers, civil servants, and Parliamentarians are placing
a stronger emphasis on good economic governance – from the management of expenditure to
increasing accountability. Where the money goes, and the impact of spending, have a much greater
emphasis than before. This has translated into quite practical support for initiatives in this area, with
the the GRSS electronic payroll system, for example, financed under CBTF, now viewed as critically
important to minimize the scope for misappropriation of limited resources.
B. Impact and Outcome that we expect to achieve
The change that an intervention in this area seeks is better economic governance – seen in better
daily decision making and stronger economic and accountability policies, and therefore better
economic trends and outcomes. This will be delivered by focusing on the institutions of economic
governance, and strengthening their individual and collective capacities. The desired impact and
outcome are therefore:
Impact – Better economic governance. This is composed of results related to the three components
of public financial management:
 Fiscal discipline (i.e. effective control of overall expenditure)
 Allocative efficiency (i.e. expenditures are based on policy priorities)
 Operational efficiency (i.e. expenditures efficiently serve the purposes to which they are put).
as well as in relation to macroeconomic governance.
Outcome – Key institutions of economic governance have strengthened knowledge, skills and
systems, and hence the ability to improve policies and decision-making.
Appraisal Case
A. Theory of Change
Building on the above analysis of context, it appears that an intervention based upon the following
theory of change would be appropriate.
Outputs
Input
 DFID UK£6.75
million over three
years.
 Influencing
government policy
 Coordination with
other donors
 Training of officials
 Data and information
gathered to inform decision
making
 Codification of knowledge
in key documents such as
manuals
 Mentoring and exchange
visits to transfer of skills
and knowledge
 Technical advice to
policymaking institutions
 New / strengthened hard
and soft systems (from IT
to new administrative
processes)
Impact
Outcome
Key institutions of economic
governance have
strengthened knowledge,
skills and systems, and
therefore the ability to
improve policies and
decision-making.
Better economic
governance
Specific
Assumptions
 Implementing partners have the
capacity to implement projects to
sufficient technical quality and
operational flexibility
 Partners, Government and donor
interest and time are not
overwhelmed by changing
context
 Partners and donors learn and
are able to adapt programmes as
needed
 Implementing partners’ projects
respond to real capacity building
needs, and are in line with the
priorities of those who are to have
their capacity built
 Programme beneficiaries have
ownership over the programmes
 Support is intensive, in terms of
both time and money.
 Support continues into the
medium and long term
 Political will to improve key
aspects of economic governance
remains strong
 All institutions relevant to public
financial management have been
included in capacity building,
particularly accountability
institutions
 All institutions relevant to
macroeconomic management
have been included in capacity
building, particularly accountability
institutions
 Attempts to cover all relevant
constraints does not lead to an
unrealistic scope of work
 Support continues into the
medium and long term
This theory of change is based on the concept that technical assistance (in the form of training, new
data, manuals, mentoring, the implementation of new systems etc) results in institutional capacity
development which in turn enables the government to exercise good economic governance. There is
an evidence base to support this theory of change, though it is not as strong as one might like.
A World Bank evaluation finds, for example, that about 2/3rds of countries that borrowed from them for
PFM purposes show improvements in this area, while only 32% of countries who did not receive such
support saw improvements. The available econometric analysis also suggests that donor support to
PFM is associated with improved PFM performance – a result that is consistent across all the (small
number of) studies that have been undertaken. The effect itself is weak, however (i.e. a lot of money
needs to be spent to obtain relatively small improvements in performance) and it hasn’t been possible
to prove whether these results are showing that donor spending drives up PFM performance, or
whether it is the better performance that prompts higher donor support. Nonetheless the result is
consistent, and supportive of the proposed theory of change.
There is, however, also evidence to suggest that South Sudan has many characteristics which make
strong public financial management systems challenging. A number of studies suggest that strong
PFM performance is most likely in stable, growing, non-rentier countries. South Sudan is highly fragile,
in the grip of the largest fall in GDP in history, and is heavily reliant (in non-crisis times) on oil income.
This means that improving performance is likely to be particularly challenging. Given the challenges
likely inherent therefore in strengthening PFM and wider economic governance in South Sudan, it is
particularly crucial to pay attention to the assumptions underpinning the different components of the
theory of change, to understand what drives programming such as this in some cases to fail, and
elsewhere to succeed.
The key assumptions that underpin the theory of change as a whole are that South Sudan will not reenter full scale war with Sudan, which would make this kind of programming impossible; and that even
if austerity continues, GRSS will continue to have the resources to execute governance functions.
Neither of these assumptions can be taken for granted, particularly the second. Should oil production
not resume as hoped, government capacity may shrink dramatically over the coming months, as
budgets fall and pay and allowances contract, which will in turn likely mean some civil servants will not
attend work. However, we assume that even under very dire financial circumstances GRSS know that
some economic governance is non-optional for the country to continue to function, and that therefore
minimum essential internal funding and commitment by policymakers will exist. Should this not be the
case the scope and form of the intervention would need to be reconsidered.
Looking to the evidence regarding the specific steps in the theory of change, it is possible to have a
relatively high level of confidence that the inputs provided by DFID should translate into the desired
outputs. Evidence from previous programming suggests that training, advice, manuals and other forms
of technical assistance are fairly simple to procure, minimising risks. This is particularly the case if one
works with high quality implementing agents who are able to respond to fragile and changeable
contexts flexibly. The output – new / strengthened systems – is potentially more complex as in some
cases it involves procuring new hardware with attendant procurement related risks, including delays
and corruption. The risks should not be overstated, however. Past experience suggests that the
challenge of translating inputs into these kinds of outputs is not too large.
At the level of output to outcome, the evidence suggests that assumptions are more significant. It is
clear from past experience of this kind of programming that capacity building doesn’t always go as
planned, and training, manuals, and new processes and data do not always translate as expected into
knowledge, skills and sustainably strengthened systems. The evidence suggests that the key
requirements underpinning success are as follows.
 Capacity building activities address real capacity building needs. Careful analysis of existing
capacities and areas for improvement is crucial to ensure that outputs actually result in stronger
capacities. Capacity gaps must not just exist, moreover, but be identified as such by those who
are to have their capacity built, who must also be interested in addressing them and improving
performance. This may not sound like a demanding assumption but a surprisingly high
proportion of capacity-building based economic governance interventions, according to a
review by the Asian Development Bank1, fail to achieve their desired outcomes because of a
lack of attention in this area.
 The inventions must have the ownership of the ‘beneficiaries’. Thus not only should the work be
well designed, but it must be implemented with the full oversight of and commitment from those
it is intended to assist. Otherwise uptake of the outputs provided will be low.
 Sufficient resources. Capacity building is not a cursory task, but requires intensive resources,
both time and money if people and institutions’ abilities are to be transformed.
 Support must also last into the medium and long term, the evidence suggests, to have the
‘Special Evaluation Study of Effectiveness and Impact of Asian Development Bank Assistance to the
Reform of Public Expenditure Management in Bhutan, India, Kiribati and Lao People’s Democratic
Republic.’ Asian Development Bank, 2000.
1
greatest chance of success. It is a time consuming, non-linear process, which involves
changing attitudes about what can and should be done, as well as how to do it, and any
assistance provided must reflect the need for longer term engagement for these reasons.
The evidence suggests that if these assumptions are in place, then outputs have a strong chance of
being translated into outcomes. The CBTF, for example, has followed these principles quite closely in
South Sudan, and is considered to have performed effectively in actually strengthening the capacity of
the majority of the individuals and institutions it has worked with.
Turning to the link between outcome and impact, there is research by the IMF2 to suggest that stronger
economic institutions do, as the theory of change suggests, improve economic governance outcomes.
Specifically they find that on average the quality of budget institutions does affect fiscal outcomes. This
is by no means inevitable, however. Particularly important requirements, according to the evidence,
are as follows.
 Political will. In some instances there may only be limited will to utilise the expertise that has
been developed. For example the short term political incentives to spend oil revenues rather
than save them will remain, even if there are more staff within MoFEP who understand the
inflationary consequences of that spending. However, while in many countries a lack of
political will may be the most important constraint to change, the evidence suggests that in
South Sudan a lack of understanding of the consequences of actions and the different policy
options available plays a huge part. This is a context where capacity building can make a very
significant impact. Moreover, the inputs to be provided by DFID are not just finance to support
programming, but also political support to reform, and influence regarding key policies. Such
engagement, driven by the DFID Head of Office and Ambassador, should help to support the
will for change.
 The programming must have sufficient breadth. For economic governance to improve, all the
key institutions that make and influence economic governance decisions must have the
capacity necessary to do their jobs. This was a key finding of the Asian Development Bank
review, for example, and has underpinned similar DFID programming elsewhere, for example in
Zambia3. This means focusing on both components of economic governance – public financial
management, and macroeconomic management - which, while they touch and overlap in some
areas, must both consciously be included. It is vital, moreover, in each case to ensure that
accountability institutions are included. The ‘demand side’ of economic governance is, despite
its importance, often neglected.
 The programming must also have sufficient focus. While achieving the intended impact
necessitates tackling all binding constraints, attempting to do so can also be overly ambitious.
Trying to be comprehensive can lead implementers to take on areas where political will for
change is lacking and dilute the intensive focus required for change. Balancing breadth with
focus is therefore crucial. A sound division of labour between different donors and
implementing partners will assist with this.
 Time is also crucial in translating outcomes into impact, as well as outputs into outcomes.
External constraints to change will not vanish overnight, and systematic programme
engagement and political support is needed.
B. What are the feasible options that address the need set out in the Strategic case?
Potential options that have been identified to address economic governance needs are listed below.
‘Institutions, Development, and Economic Growth’ Edward L. Glaeser, Rafael La Porta, Florencio
Lopez-de-Silanes, and Andrei Shleifer, Do Institutions Cause Growth? (2004); ‘Poverty, growth, and
institutions in developing Asia’ Ernesto M. Pernia, (2003); “Budget Institutions and Fiscal
Performance in Low-Income Countries’ Era Dabla-Norris, Richard Allen, Luis-Felipe Zanna, Tej
Prakash, Eteri Kvintradze, Victor Lledo, Irene Yackovlev, and Sophia Gollwitzer (2010).
3 ‘Business Case for Extension of Public Expenditure and Financial Accountability Programme’ DFID
Zambia, 2011
2
Option 1: Extend funding to the CBTF through the JDO
DFID is already funding the CBTF in South Sudan and acts at the deputy donor lead on the
programme. The pooled fund has worked well to date, with strong buy in across a range of government
departments, effective inputs from donors, resulting in strong performance as reported in past annual
reviews4.
The fund would continue to work on its core areas of focus, for example strengthening government
payroll, but its agenda continues to evolve to tackle new priorities. Most important is the introduction of
a new accountability window which will complement the original focus on the ‘supply’ of economic
governance reform with a stronger component which tries to strengthen ‘demand’. The institutions that
would be assisted through the new window include the Audit Chamber, Anti-Corruption Commission
and Parliament.
Option 2: Provide funding to the IMF for their Trust Fund in South Sudan
The IMF is setting up a Trust Fund in South Sudan to support economic management, focused in
particular on the Bank of South Sudan, but also supporting capacity building and policymaking in
MoFEP. This will strengthen some components of PFM, but will mainly address wider economic
governance issues, relating to exchange rate management and the control of inflation, for example,
though support to monetary statistics and central bank management. The Trust Fund will place long
term technical advisers in the Bank of South Sudan and potentially in other institutions to provide
ongoing advice and capacity building, as well as shorter terms posts and support from headquarters
through missions.
Option 3: Provide funding to the World Bank for the High Frequency Survey
Data and evidence are critical to sound economic management, as discussed above, and the High
Frequency Survey will gather regular data across a range of areas which are central to sound
economic management, including price and exchange rate data, and poverty statistics. It is also
designed to build the capacity of the National Bureau of Statistics in data collection methods and data
analysis, and also share the collected data, so that civil society and the media, for example, are able to
use it to hold Government to account for its management of the economy.
Option 4: Combine all of the above
Option 4 involves funding all of the above interventions, as complements to one another – bringing
together programmes with a public financial management focus, economic management focus, and
data to steer economic governance.
Option 5: Combine all of the above, plus a fragility response fund
Option 5 comprises support to all three programmes above, plus a small fragility response fund. This
would be a flexible fund, deployed by DFID South Sudan to support emerging priorities in the area of
economic governance.
The evidence suggests that in fragile contexts successful PFM and economic management
interventions tend to monitor emerging needs on the ground, and are able to respond quickly to the
changing dynamics. South Sudan potentially faces the largest fall in GDP in history, which would
create a mass of potential economic policy problems. It is not possible to predict at this point if and
how these events might unfold. And even if economic catastrophe is averted with the re-starting of oil
production, given the low level of economic governance at present, and the need for action across a
4
E.g. see ‘Capacity Building Trust Fund: Annual External Review’, Rajan Soni, 2012
wide array of areas, it seems highly likely that new priorities, some with short time frames for action,
will emerge over the three years of this programme. For these reasons a small fragility fund is included
in option 5 which would permit a flexible response to economic governance challenges.
Option 6: Do nothing.
Option 6 would allow the funds to be redeployed elsewhere, and limit DFID’s support to economic
governance to the ongoing work by ODI BSI on public financial management and the small amount of
support provided centrally through the ODI Fellows. This would leave the CBTF seriously underfunded
but also under-supported politically, given DFID’s leading role. It is possible that neither the IMF Trust
Fund nor the High Frequency Survey would begin without DFID support, as DFID would play a lead
donor role in both. This would reduce the total amount of work being done on economic governance in
South Sudan at a time when it is more imperative than ever.
Identifying feasible options
Are all six of these options feasible? Referring back to the theory of change, and the impact the
intervention aims to achieve, allows a more formal assessment of the appropriateness of the options.
The assumptions that have to be fulfilled, or ‘critical success criteria’ are listed below.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Critical Success Criteria
Implementing partners can provide high quality assistance, and are flexible and adaptable
Projects respond to real capacity gaps, which are identified as such by the intended
‘beneficiaries’
The projects are owned by those being assisted
Support is intensive
Support lasts into the medium and long term
There is political will to act upon the project’s outputs
All public financial management institutions that could productively be included in the
assistance have been (including in particular accountability institutions)
All macroeconomic management institutions that could productively be included in the
assistance have been (including in particular accountability institutions)
The programme is not overreaching and overly ambitious
While options 1 - 3 tend to perform well against most of the indicators (see annex 1 for a detailed
assessment) it is clear that options 1 to 3 have critical flaws. Economic governance is defined as both
macroeconomic management and PFM, and it involves ensuring there is action across the set of key
binding constraints in relation to both aspects, as set out in success criteria 7 and 8. Options 1 to 3 are
incapable of this.
Specifically, while the CBTF is carefully designed to address a range of crucial PFM capacity gaps
(including on accountability), the fund’s focus is nonetheless on a limited range of nuts and bolts
interventions with a relatively narrow ‘public administration’ focus. The programme does not touch on
macroeconomic management at all. In contrast the IMF programme focuses very much on
macroeconomic management, with some attention to some aspects of public financial management.
This is limited, however, and at a very high level, meaning that its contribution to addressing the
multiple barriers to poor PFM performance is also limited. Finally, the scope of the World Bank
intervention is very limited. It is carefully designed to comprehensively address a single driver of poor
economic governance – the data and capacity to gather data that can underpin both stronger
macroeconomic management (e.g. price and exchange rate data) and public financial management
(e.g. economic and social trend data, which allows better targeting of public spending). It is, however,
only applicable to this single driver of poor economic governance. Skills, IT, management and various
other capacity gaps are not addressed. For this reason options 1 to 3 are not considered as feasible
stand-alone options. The analysis is therefore conducted on options 4, 5 and 6.
Assessing the strength of the evidence base for feasible options
The table below lists the evidence rating for each of the three feasible options.
Option
4 – Combined approach
5 – Combined approach
plus fragility response fund
Do Nothing –
counterfactual
Evidence Rating
Medium
Medium
High
The two ‘intervene’ options are rated medium, given the state of knowledge regarding economic
governance interventions described in the theory of change above. The level of knowledge about how
to strengthen capacities is reasonable, though evidence on the link to economic governance outcomes
is somewhat weaker. There is also significant evidence about the competence of the potential
implementer / modality– either drawn from past experience in South Sudan on the same / similar
initiatives (as in the case of CBTF and the World Bank), or experience with economic governance work
in other fragile contexts (e.g. the IMF). This provides significant confidence that the results expected
can be delivered.
The evidence for option 6 is rated high, as the low level of administrative capacity which existed prior
to the establishment of the project was a result of the failure to support the development of the
administration. While progress has been made, economic governance performance remains very poor,
and it is clear that in the absence of further assistance this trend will very likely continue.
What is the likely impact (positive and negative) on climate change and environment for each
feasible option?
There are not significant climate or environment risks expected from the implementation of this
programme. Nor are there significant opportunities.
One opportunity that should be followed up regularly (during annual review for example) is to ensure
that this programme is aligned with any other initiatives around capacity building and / or training on
green growth, resilience or the role of the natural environment in underpinning economic growth (e.g.
ecosystem services). No such opportunities have been identified at present but work funded by DFID
or other donors in the future could be relevant. If we are planning to strengthen capacity and systems
in the Ministry of Labour, Public Service and Human Resource Development and MoFEP, the lead
Advisor should be aware of opportunities to help make strategic links between national growth and
climate change and the environment.
.Option
Climate change & environment risks
and impacts, Category (A, B, C, D)
4
5
Do
nothing
C
C
C
Climate change and environment
opportunities and risk, Category
(A, B, C, D)
C
C
C
C. Costs and Benefits of Feasible Options
Costs
In terms of financial costs, each of options 4 and 5 cost £6.75 million. Either each of the CBTF, IMF
and World Bank components can be allocated £2.25 million, or they can each receive £2 million,
leaving £750,000 for a fragility response fund. Non-financial costs are considered negligible and not
included in calculations. While both options involve some time being given up by counterparts in
Ministries to attend training and exchange visits, these forms of capacity building are far outweighed by
‘on the job’ outputs that do not cost Government lost time.
Benefits
Two forms of analysis are undertaken to examine which option is likely to deliver most benefits.
The first is inexact but informative – a qualitative assessment of the extent to which each option meets
the assumptions that underpin success, or ‘critical success criteria’. This analysis was discussed
already in the previous sub-section and is provided as annex 1. As well as leading to the discarding of
options 1 – 3, it also suggests that option 5 may be preferred to option 4, as it enhances the flexibility
of the programme. The additional value delivered via an additional £250,000 for each of the three
interventions is not thought likely to add significantly to the ability of each to meet the critical success
criteria, while the introduction of a new responsive window should significantly add to the programme’s
flexibility.
The second assessment is focused on the actual impact of the options, and includes a quantitative
component which attempts to measure the value of some of the benefits to be delivered. The desired
impact of the programming is stronger economic governance in two components - macroeconomic
management and PFM. The latter can in turn be broken down into allocative efficiency (improvement in
the allocation of resources to identified priorities), operational efficiency (the efficiency with which
money allocated for any end is translated into outputs and outcomes), and fiscal discipline.
DFID guidance on appraising PFM programmes5 reflects on methods used by different DFID country
offices, assesses their relevance, and suggests some new techniques which draw on World Bank best
practice. And while there is no specific guidance on appraising macroeconomic management
programmes, the approach taken by other country offices to similar programmes has been assessed
for relevance in this case. Many of these techniques, however, do not appear appropriate in South
Sudan, mainly because of a lack of available data (this affects evaluation and assessment across the
board in South Sudan, as detailed in the management case). There is, however, one approach which
can be tried in order to illustrate a single aspect of the intended impact, the enhanced allocative
efficiency of public expenditure6. This approach is based on the insight that some proportion of the
budget is ‘saved’ because an enhanced proportion of budgeted public expenditure is actually spent on
activities that promote growth and poverty reduction, and less goes on corruption and waste.
This insight is clearly highly applicable in South Sudan. As detailed in the strategic case improved
budget execution would certainly raise spending in areas with a strong social and productive return, as
waste and corruption are serious issues. Indeed, more nuanced analysis of public financial
performance shows that the sectors which tend to overspend relative to their allocations include
security (especially the SPLA) along with politically powerful Ministries with unclear development roles
(such as the Office of the President, for example). While an argument can be made that substantial
spending on security is necessary in a context such as South Sudan (where only a certain proportion
of uniformed personnel are prima facie loyal to the state while others are militias much closer to
defection if not well treated), it is also clear that the army is very politically influential, and its level of
‘Draft Interim Guidance on Undertaking Cost-Benefit Analysis of Public Financial Management
Projects’ DFID, 2011
6 Both ‘intervene’ options are modelled together here and compared to the counterfactual. This is
because there is no evidence to credibly base differential quantitative analysis upon. This section
therefore demonstrates the effectiveness of intervening using either option 4 and 5, the rest of the
case establishes qualitatively which of the two options is thought more appropriate to achieve the
desired outcome and impact.
5
financing within the public expenditure system is strongly related to this privilege. In contrast the
Ministries which underspend, relative to budget, tend to be the social sectors, particularly health, which
has a worrying record of underspend. These Ministries have, however huge potential to build human
capital, contributing to the development potential of the nation.
If possible this insight would be operationalized by examining the extent to which the Government has
allocated its resources to its policy priorities in the past, and then make an assumption about the extent
to which this will change as a result of the intervention. Sectoral rates of return can then be used to
assess the benefits of increased spending in the government’s priority sectors. However in South
Sudan (and many other countries) a full set of sectoral rates of return is not available. Different
approaches are therefore needed to implement this insight. Two are tried here, the first of which is
based on assumed percentage of overall budget expenditure being saved as a result of the
intervention. This is necessarily an ad hoc choice, with other offices DFID country offices using
anything in the range of 0.4% (Malawi and Ethiopia) to 1% of the budget (used more frequently, and
cited in the DFID guidance).
So what does this approach look like applied to South Sudan? First a budget must be identified to base
the analysis of any savings on. This financial year’s budget (2012 – 2013) of 6.6 billion SSP is unusual,
in that it is significantly smaller than previous years’ (just over 8 billion SSP was budgeted in 2011 –
2012), but potentially also significantly larger than the amount to be allocated if the oil shutdown
continues, as only approximately 25% can be funded with reserves and recurring income. It makes it a
sensible starting point for analysis (particularly as it is on the cautious side, given our expectation at
present that oil production could well restart within the next few months).
The table below lists how large the savings would be were 1% or 0.4% of the budget were no longer
lost through waste or corruption. Different estimates are provided for each percentage saving based
upon whether it is translated into USD and GBP at the official or market exchange rate. In reality a mix
of both would be most likely to apply (with some of the savings spent in the domestic market (for
example on wages), best calculated at the market rate, and some spent internationally, on procuring
goods from abroad, in which case the official rate is relevant). As a result the two estimates for each
percentage saving can be viewed as upper and lower band savings estimates in each case.
Budget
% saving
Saving in SSP
6.6 billion
SSP
1%
66 million
0.4%
26.4 million
Exchange rate
used
Official
Market
Official
Market
Saving in
USD
22.4 million
12.2 million
8.9 million
4.9 million
Saving in
GBP
14.4 million
7. 9 million
5.8 million
3.2 million
The results of this range from savings £3.2 million to £14.4 million, depending on the exchange rate
and savings assumptions made. In terms of considering which percentage saving – 1% or 0.4% - is
most appropriate, the guidance suggests that the greatest progress will be made in countries with poor
systems at present, as well as the will to improve performance. South Sudan fits both of these
characteristics (though we will see how political will evolve if oil returns), suggesting the estimates
derived from the 1% assumption may be more relevant than those based on a 0.4% efficiency
increase.
A second approach to measuring the value of the allocative efficiency is to examine a specific source
of leakage – that associated with the payroll. The guidance notes this is often a particularly significant
source of inefficiency, as well as one that is often tackled in PFM reform projects. This is certainly the
case with this programme, which has a central component on payroll which will be supported by other
components of the work. While South Sudan has no quantitative assessment of the number of ghost
workers on the payroll, those with experience of working with the payroll suggest that it is at least 20%
of the amounts paid out. In some Ministries it has been estimated that 75% or more of the wage bill is
composed of ghost workers7.
Payroll for 2012/13 has been allocated 2.9 billion SSP. Different estimates of the size of the ghost
worker population of 20%, 35% and 50% can be applied to this outlay (75% is not modelled as this
example is not thought representative across the board, though it clearly drives up the average). On
top of this a calculation must be made as to how large a proportion of the ghost workers on the payroll
might be able to be tackled as a result of this programme’s support. This is necessarily a guesstimate,
based on a reading of how much will there is to tackle this issue, and how effective the programme’s
interventions can be. On this basis it is suggested that at best 50% of the payroll may be cleaned up8,
and at worst, a minimum of 10% can be tackled. The various permutations of this modelling are set out
in the table below.
Payroll value
2.9 billion
SSP
% ghost
workers
20%
35%
50%
% saving
Saving in SSP
50%
25%
10%
50%
25%
10%
50%
25%
10%
290 million
145 million
58 million
508 million
254 million
102 million
725 million
363 million
145 million
Saving in
USD9
53.7 million
26.9 million
10.7 million
94 million
47 million
18.8 million
134 million
67.1 million
26.9 million
Saving in
GBP
34.6 million
17.3 million
6.9 million
60.6 million
30.3 million
12.1 million
86.6 million
43.3 million
17.3 million
Perhaps the most important aspect to highlight about these results is how large a range of potential
returns this represents. It varies from 6.9 million GBP to 86.6 million GBP, depending on the
assumptions made. It is very important, therefore, not to take these figures as accurate calculations of
the allocative efficiency value of the programme, but simply as illustrations of the kind of returns that
could be delivered.
Drawing the analysis together, it is crucial first to note that the two calculations – the percentage saving
and the payroll saving – should not be added together, as both are different ways of showing the same
allocative efficiency effect. They work instead, as a very rough demonstration of the potential size of
the allocative efficiency benefits that could result from this work10. The results range from £3.2 million
(though this seems unlikely as it is not based on knowledge of South Sudan, but on assumptions
drawn from other, fairly different cases) to 86.6 million (which also seems unlikely, as it anticipates a
highly dysfunctional payroll and a highly effective project). Numbers in the range of £10 – £20 million
come up most often, and are based on assumptions that feel most appropriate given our knowledge of
the context. However these should still be viewed as highly speculative estimates of possible allocative
efficiency impact.
Allocative efficiency is, however, only one component of the impact that the programme seeks. The
benefits in seeing allocated funds translate more effectively into outputs (operational efficiency), the
benefits of fiscal discipline, and the effects of more broadly improved macroeconomic management are
left unvalued by the calculations above. Each of these has the potential to generate very substantial
7
Personal communication with Head of Technical Secretariat of the CBTF, August 2012
Although this would require progress with the SPLA, which is further off at present, because of the
particular political difficulties associated with tackling management of the army.
9 Only one exchange rate is used here because wages are paid in the local market, meaning that
where they are exchanged for dollars this will more likely be at the unofficial rate. This is a rough
approximation, but it is also appropriately cautious, as it reduces the size of the saving more than
using the official rate.
8
returns.
If, for example, the actual activities undertaken by each line Ministry are increasingly selected in terms
of their capacity to deliver outputs and outcomes (operational efficiency), the value of their activities
could potentially rise dramatically. To take just one example, if Ministry of Health spending came into
line with the aims of the Health Sector Development plan, this would increase the returns of that
spending dramatically. A move away from a tertiary health care and staffing focus towards the delivery
of high impact primary healthcare interventions would deliver stronger returns in terms of the health
status of the population (as other DFID analysis, such as the business cases for the Health Pooled
Fund and Emergency Medicines Fund, establishes).
Improving fiscal discipline is likely to reduce the risk of fiscal crises, which South Sudan has already
experienced twice in its seven year history. These can have very substantial effects on the macroeconomy, damaging investment as well as consumer confidence, and causing not just reductions in
growth but sizeable falls in GDP. This has an effect on poverty and livelihoods, which would also be
affected by Government’s inability to support basic services such as schools. The current situation is a
fiscal crisis of the gravest proportions (and were it to continue it could potentially wipe 70% - or more –
off South Sudan’s GDP), but it should not be seen as illustrative as the size of the gains that can be
delivered by action in this area. This is because it has come about not just because of poor fiscal
policy, but because of complex historical and political problems. Improved fiscal management would
not have prevented it. Nonetheless smaller fiscal crises (such as those that might be precipitated by a
drop in the oil price), with smaller but similar kinds of effects, are more likely to be avoided with
enhanced fiscal discipline.
Turning to the wider questions of macroeconomic management, the positive effects of this are also
very numerous and hugely substantial, ranging from the reduced poverty that would result if inflation
could be kept under control; to the increased investment that likely associated with stable, lower
inflation and a sustainable exchange rate with equitable access to foreign exchange. These could
potentially knock a number of percentage points off poverty rates (given how high inflation is) or
increase growth rates.
In addition there are additional likely impacts that would be felt outside the economic realm. To take
one example, the DFID PFM guidance discusses the fact that a more efficient and less corrupt
Government can improve the relationship between state and society – a relationship which is nascent
and sometimes problematic in South Sudan. The guidance notes that the size of this effect is likely to
be greater in countries which have previously had very inefficient and/or corrupt PFM systems; and
have recently emerged from fragility – both of which are certainly true for South Sudan. It seems likely
therefore that this effect would likely be substantial, and developmentally important, in this context.
Comparison of costs and benefits
In comparing costs and benefits it is important to discount both. While the timeline for the programme
is not long, it is assumed that it will take until the end of the programme for the benefit of enhanced
allocative efficiency to be delivered, while costs will be spread over the three years.
Discounting the costs at 10% (the rate usually used for South Sudan interventions) on the basis of the
yearly anticipated spend (see the financial case), these have a net present value of £6.1 million.
Discounting the bottom end of our most realistic range for benefits, £10 million, and conceptualising
these as a one off benefit in year 3 (although in reality the benefits would likely extend beyond this and
possibly increase over time, as the programme should set off a virtuous circle of economic governance
improvements as capacity is built), gives a net present value of £7.5 million. If the upper end of the
most realistic range is used instead, £20 million, this has a net present value of £15 million. This
suggests that the intervention is likely to have a positive cost benefit ratio even if only the estimated
effects of enhanced allocative efficiency are included (though again the tentative nature of these
estimates should be highlighted)11. However, the multiple aspects of better economic governance
targeted by this intervention are varied enough that, should the programming have the success aimed
for, it could have a transformative effect on the underpinnings of the economy of South Sudan and how
the Government relates to it. This transformation is a prerequisite for the sustainable development of
the country.
For all these reasons intervening is clearly preferable to not intervening. In terms of which option is
preferred, while the quantitative analysis was not able to distinguish between options 4 and 5, the
critical success criteria suggest that option 5 is likely to have a greater chance of success than option
4. In sum, therefore, option 5 has been identified as the most appropriate intervention to tackle
economic governance challenges, is preferred to the counterfactual, and demonstrates strong value for
money.
D. Measures to be used or developed to assess value for money
The Value for Money (VFM) of this intervention will be determined on the basis of how well the project
performs against the logframe in the first instance. This provides the key indicators of output (such as
number of people trained), outcome (such as effective systems that actually improve performance) and
impact (such as lower inflation) that are sought on the benefit side. Additional benefit measures will be
produced in the monitoring and evaluation and design phase which will also be tracked in order to
ensure that the money spent is delivering the intended impact for poor people.
On the cost side, we will monitor key unit costs, such as fee rates for staff and consultants, as well as
procurement of any large systems elements. These will be benchmarked these against comparable
data from other DFID South Sudan programmes, as well as examined in light of cost drivers (such as
inflation, or changes in transport connectivity) which could be expected to influence them.
This comparison of DFID spend with programme impact conceptualises DFID’s support as
instrumental to the changes taking place or not – in other words as a full attribution of result. This is
certainly the case for the High Frequency Survey, where we are the only donor identified thus far and
may potentially fund 100% of the intervention. It is also plausible in the case of the IMF Trust Fund,
where we would be the first donor to contribute and instrumental in it getting off the ground. Our
contribution to the CBTF is relatively smaller, and it is highly likely that this work will take place even
without our support, though on a somewhat smaller scale. However without the complementary
support provided to CBTF by the IMF, World Bank and fragility response fund, our theory of change
suggests that success is much less likely. This is another reason, however, to consider these
statistics highly tentative, and only illustrative of possible impact and the value of undertaking the
work, as opposed to in any way a prediction of actual impact.
11
Commercial Case
Direct procurement
A. Clearly state the procurement/commercial requirements for intervention
DFID’s support to this programme will be provided through three memoranda of understanding with
the Netherlands, the IMF and the World Bank. DFID plans to make a combined contribution of £6.75
million over three years to the programme (plus £350,000 on monitoring and evaluation) which will be
attributable to specific results. However the delivery of this allocated contribution will be dependent
on the performance of the project.
Standard IMF and World Bank MOU arrangements will be followed. UK support to the CBTF will
make use of existing procurement arrangements established at the outset of the fund. Under this
arrangement, the Netherlands acts as the lead CBTF donor and has contracted a commercial
Financial Management Agent to manage CBTF procurement on behalf of the fund Under this
arrangement. The Financial Management Agent uses European Union procurement regulations,
guided by the Practical Guide (PRAG), to undertake procurement through the fund. We anticipate
that the management arrangements for the CBTF will shift midway through 2013 after the closure of
the JDO. We will ensure that this transition does not impact adversely on procurement standards.
This programme also includes a fragility response fund for £750,000 We anticipate using this funding
for discrete, strategic interventions to support the outcome and impact of this economic governance
work. Procurement will be done by the Programme Team, using the relevant advisory resource, and
by appropriately trained and designated procurement officials. In the event of larger tenders we will
utilise PRG support and abide by the regular DFID requirements for this work.
A further amount of up to £350,000 is set aside for monitoring and evaluation of the project which
may include an external impact evaluation of the programme. This will be done through a direct
procurement using either existing frameworks or procuring following the OJEU process. We would
expect a number of firms to bid and this competition will drive-up the quality and would achieve good
value for money.
B. How does the intervention design use competition to drive commercial advantage for
DFID?
Procurement undertaken through the CBTF uses competition to achieve commercial advantage. The
fund follows European Union procurement procedures to ensure that every procurement process is
transparent, competitive and results in best value-for-money for the fund. Requests for proposals are
well-advertised in international and local publications.
For the Fragility Response Fund, we will use open competition processes wherever possible,
framework agreements where appropriate, and Single Tender Processes only at the discretion of the
Head of Office.
C. How do we expect the market place will respond to this opportunity?
Judging by past performance of the CBTF, we expect that the marketplace will positively respond to
procurement opportunities. Competition for projects in South Sudan has gradually increased as new
service providers have begun bidding on projects locally.
To maximize the response of the marketplace, procurement opportunities are advertised
internationally (through Tenders Electronic Daily), through the CBTF website, and through
advertisements in local newspapers and publications.
This growing number of actors capable of delivering research and capacity building support also
means that we anticipate the market responding reasonably competitively to opportunities arising
from the Fragility Response Fund.
The other two interventions utilise the World Bank and IMF’s specific global expertise and mandate
and are therefore inappropriate for competition.
D. What are the key cost elements that affect overall price? How is value added and how will
we measure and improve this?
For the CBTF, the costs of maintaining a Financial Management Agent (FMA) to administer
procurement, manage contracts, and complete financial reports affects the overall administrative
costs of the fund. Value is added by maximizing the value of the projects managed by the FMA. The
CBTF improves this value by combining the resources of multiple donors with a single FMA.
The prices of individual projects undertaken through the fund are affected by the bids submitted by
service providers in response to requests for proposals. It is expected that these costs will continue
to improve as South Sudan becomes a more competitive commercial environment. The CBTF will
continue to advertise procurement processes actively to promote competitive bidding.
Key cost elements of other interventions are likely to be human resource costs in South Sudan and
the costs of transportation. We monitor both factors closely and will ensure that rates offered on both
variables are competitive.
E. What is the intended Procurement Process to support contract award?
UK support to the CBTF requires an exchange of letters with the Kingdom of the Netherlands
confirming the amount of the support which will be provided over the period of 1 September 2012 to
31 January 2014. As the CBTF is an ongoing effort supported through previous UK contributions,
procurement of all other elements of the CBTF and its management are completed. A Joint Financing
Arrangement between the Republic of South Sudan and donors was signed at the outset of the fund.
A ceremony for signing an extension of this document by the Netherlands (lead donor) and the
Ministry of Finance took place in June 2012. An Arrangement on Delegated Cooperation between the
United Kingdom and the Netherlands (lead donor) is in effect for the duration of the CBTF. The
terms and conditions of the UK (and other donor) contributions to the CBTF are outlined therein. A
contract between the Kingdom of the Netherlands and the Financial Management Agent is in place
for the duration of the fund.
For the independent evaluation DFID’s existing frameworks or international competitive bidding
following standard EU restricted procedure will be followed. Terms of reference giving full
specification of programme and evaluation requirements will be produced for the invitation to tender.
This will specify all criteria required from contractors for the delivery of the project.
F. How will contract & supplier performance be managed through the life of the intervention?
For CBTF, individual project performance is tracked through an internal monitoring framework, which
sets out objectives from the inception phase of each project and tracks results throughout project
implementation. A full-time project monitor at the CBTF Financial Management Agent provides
ongoing monitoring of projects and reports.
The fund as a whole also incorporates several performance management measures, including an
Annual External Review by an independent consultant and an annual audit of CBTF expenditures. A
Steering Committee oversees the implementation of the CBTF through quarterly meetings. The
Steering Committee is supported by a Technical Secretariat, located at the Joint Donor Team, which
provides day-to-day oversight of the fund. The Head of the Joint Donor Team is a seconded DFID
staff member.
A regular schedule of review meetings (at least twice a year) between DFID South Sudan and the
CBTF as well as the two International Agencies will be arranged to monitor and review progress.
Technical and financial reports will be submitted by them to DFID on a quarterly basis. In addition,
informal monthly meetings will also give opportunity to review progress and address issues.
Indirect procurement
A. Why is the proposed funding mechanism/form of arrangement the right one for this
intervention, with this development partner?
Funds will be dispersed to multilaterals and the Dutch via memorandums of understanding
established and agreed with each agency in line with central DFID funding policy for International
agencies.
B. Value for money through procurement
The proposed Capacity Building Trust Fund does not involve DFID procuring any goods directly.
The MAR assessed the World Bank’s procurement processes to be solid (the IMF were not included
in the MAR) and given the relatively discrete nature of the programme we believe they will be able
to drive VFM through the procurement process. In addition the International Agencies are tried and
tested partners and DFID will work closely with them in South Sudan to ensure they keep unit costs
as low as possible and deliver VFM.
For the Strategic Opportunities Fund we intend to use competition to drive VFM as part of the
procurement process (see above).
Financial Case
A. What are the costs, how are they profiled and how will you ensure accurate
forecasting?
The total cost of the programme over the 3 years will be £7.1 million as shown below.
2012/13
2013/14
£1m
£1m
Support to IMF Trust Fund
£670,000
£670,000
£660,000
World Bank (High Frequency Survey)
£670,000
£670,000
£660,000
Small scale direct procurement ( Fragility
Response Fund)
£200,000
£250,000
£300,000
Monitoring and Evaluation
£100,000
£100,000
£150,000
£2,640,000
£2,690,000
£1,770,000
CBTF via the Dutch Embassy
Total
2014/15
DFID South Sudan will pay tranched contributions to the programme as stipulated in the MOUs.
Project performance will be assessed on an annual basis which will allow us to decide on the level of
future contributions.
B. How will it be funded: capital/programme/admin?
This will be funded in the main from DFID South Sudan Programme Resource. Approximately
£400,000 will be allocated to capital budgets, in relation to some of the systems strengthening
components of CBTF.
C. How will funds be paid out?
Funds will be paid out in tranches as outlined in MOUs in accordance with central DFID funding
policy for funding international agencies.
CBTF via the Nethelands
MOU with the Netherlands with annual disbursements of £1m
IMF
MOU with the IMF with annual disbursements of £670,000
World Bank
MOU with the World Bank with annual disbursements of £670,000
Small Scale Direct Procurement
Monthly payments on receipt of invoice paid through the DFID Aries systems,
The DFID Programme Team will ensure that ADAMANT checks are carried out for all payment
requests.
D. What is the assessment of financial risk and fraud?
CBTF via the Netherlands – Will be done in accordance with Netherlands government provisions with
support from the Fund Manager/Agents (Mott MacDonalds) and we will retain close oversight of
programme implementation. We will ensure the successor arrangements meet the same standards.
World Bank – The World Bank has very credible anti-fraud measures in place and work closely with
DFID’s anti-fraud unit in the UK.
IMF – The majority of the funding will is expected to be used for the provision on international advice
and the risk is low.
Small Scale Direct Procurement - The majority of funding is anticipated to be channelled to discrete
research or advice work, in which the risk of fraud is relatively low.
E. How will expenditure be monitored, reported, and accounted for?
CBTF via the Netherlands - Monthly statements of expenditure, quarterly narrative progress reports
and ad hoc discussions (if and when needs arise between DFID South Sudan Programme Team and
the Fund Manager).
World Bank and IMF - DFID will ensure that a detailed Annual Report is produced by the WB
alongside quarterly progress reports these will include a comprehensive financial statement and a
breakdown of results achieved each year as well as other management information. In addition to
this the annual review will independently evaluate the financial statements as well as WB financial
management practices. WB are also audited under their financial regulations and rules and will be
required to manage procurement, fraud and corruption through their staff regulations
Small Scale Direct Procurement - Rigorous monitoring and accounting of expenditure will take place
using the DFID Aries system and standard DFID South Sudan procedures for inspecting invoices to
ensure VFM and compliance with agreed procedures
All partners will be required to report on their expenditure and results achieved at least annually. The
level of detail of information required from partners will be proportionate to the level of funding. The
DFID programme team will make regular visits to projects and we will use these visits to test
information in the financial statements and examine financial management mechanisms at the project
level.
Management Case
A. Management arrangements for implementing the intervention
The programme will be managed by DFID programme staff with support from the DFID economic
adviser, governance adviser and results adviser, as well as other advisers where and when required.
As the majority of implementing partners are international agencies, the partnerships will be managed
through a series of standard Memorandum of Understanding. The fragility response fund will be
managed through standard DFID contracting procedures. Requests will be made by advisors or
programme staff, and approved at the relevant level of Delegated Authority.
Subcontracting
The CBTF component will have some sub-contracting will be implemented through Mott MacDonald
(The Fund Managers) who have a proven record in procurement and can be expected to achieve
good value for money. Additionally for other services such as evaluations and research DFID will
contract services directly.
Strategic Oversight
This will be carried out by the DFID Juba Economist Adviser (Laura Chappell) with inputs and
assistance from the Programme Manager (Hamish Falconer), Results Adviser (Caroline WangeciDale) and Senior Governance Adviser (Sonia Warner and then Accountability Adviser once
appointed).
B. What are the risks and how these will be managed
Key risks to the programme are listed below, along with mitigating measures. Some could pose
substantial risks to the programme but can be managed by careful monitoring. Others can also have
a major effect (such as prolonged austerity or an all-out war) and cannot be mitigated by programme
actions. HMG is engaged in trying to mitigate these possibilities through other policy and
programmatic actions, but should they eventuate nonetheless, the appropriate action must be to
review the programme to see whether it is still feasible.
Risk
Significantly increased
conflict with Sudan /
internally
Likelihood
Medium
Impact
Medium
Mitigation
Other DFID and HMG action, including
conflict adviser stabilisation work, and
support to negotiations in Addis. Were
full scale war to erupt, however,
appropriate mitigation would involve
reviewing the programme for feasibility
This programme will provide analysis
that may change the Government’s
calculations about economic strategy.
Also mitigating is support to
negotiations in Addis. Another year or
longer of austerity, however, may
require review of the programme.
Careful monitoring and evaluation of
the programme
Austerity continues
with South Sudan
unable to access major
new finance
Medium
High
Implementing partners
are not flexible or high
quality enough
The programme isn’t
able identify real,
mutually agreed
capacity gaps
Government does not
have ownership over
the programme
There is not the
necessary political will
to drive through
change
Medium
High
Medium
High
Careful monitoring and evaluation of
the programme
Medium
Medium
Monitoring of steering committee and
day to day management arrangements
Medium
High
Programme becomes
over-ambitious
Low
Medium
Careful design of each intervention,
monitoring of progress and political
support to activities using the
Ambassador, Head of Office etc, where
necessary,
Including a fragility response fund takes
the pressure off the three implementers
to take on new activities which could
distract.
C. Conditions that apply (for financial aid only)
Not Applicable
D. How will progress and results be monitored, measured and evaluated?
This programme will be subject to the same M&E constraints as other DFID South Sudan
programmes. These include:



Lack of comprehensive and credible data
Serious capacity and resource constraints, particularly in regards to quality and training of
enumerators, supervision of data collection activities and ability to analyse data correctly
Poor infrastructure and safety concerns regarding accessing certain areas in South Sudan
This South Sudanese context is against the wider backdrop of low data quality and statistical capacity
of Sub-Saharan African countries in general: i.e. the country’s ability to practise international
standards regarding methods and data reporting in social and economic statistics, collect data at
recommended intervals and the ability to make data available for users of international data sources.
Indeed, one of the strengths of this programme is that it attempts to tackle these constraints by
building the capacity of the National Bureau of Statistics.
A main M&E constraint for this programme is building a system that captures the changes capacity
building has on institutions and the people inside them. There is no data source in South Sudan
about the performance of Government institutions that will allow us to track progress at outcome
level, therefore data will have to come from the M&E systems that we set up with Implementing
Partners (IPs).
Monitoring
A monitoring framework will be developed with IPs to meet both DFID’s and their requirements. The
following components will be important in order to adequately track progress against the indicators in
the logframe:




Provide data for the indicators in the logframe,
Provide data that will allow us to assess the VFM of the project annually (at the very least)
Collect information that allows us to assess the impact the project has on conflict dynamics and
how these dynamics impact on the delivery of the project
More broadly, provide information that will allow for rigorous risk management of the programme.
All data collected as part of monitoring will be disaggregated by gender and where appropriate by
ethnic/community background and by returnees and host community. Appropriate planning and
capacity will need to be in place early on in the programme to ensure appropriate implementation of
the framework. The following describe what will need to be in place and when:
On- going monitoring: This will be based on the implementing partners collecting data to track
progress against most indicators in the logframe. We will need to ensure that this data is used for
continuous lessons learning to improve programme implementation. Qualitative assessments will be
an important part of tracking progress especially as hard data may not be available. We will work with
implementing partners to ensure that a good methodology is in place for these assessments and that
we are triangulating the information as much as possible to ensure they are objective.
Monitoring visits data independent review of data: DFID project team will be responsible for
undertaking monitoring visits and will aim for at least 2 visits every six months. These visits will be
used to collect information on the progress of the programme and quality-assure the data produced
by the IP monitoring systems. The information from the visits will feed into DFID annual reviews of the
programme. The independent evaluators will also have a role in verifying and triangulating monitoring
data which they will also use as part of the planned evaluation.
Evaluation
The evaluation will explore further the effect capacity building outputs appear to having on the
intended outcome and impact. Whilst we are not planning an impact evolution, we are interested in
the processes by which these activities contribute to changes in how the targeted institutions operate
and improve policy and decision making (our outcome) and how these changes deliver on our longer
term goal of better economic governance (impact). This evaluation will help us better understand the
merits of using different approaches to capacity building to improve how institutions and those
working within them operate.
DFID South Sudan uses a number of criteria to decide whether or not to evaluate a programme,
which are considered below in relation to this project:
Evidence base: The evidence base of how capacity building and knowledge generation outputs
deliver in relation to changes in behaviour and performance of the targeted institutions and those
working within them is medium at best globally. Whilst an impact evaluation where we can attribute
how this intervention delivers on the outcome and impact is not planned, we are interested in the
processes that allow us to contribute to the outcome and impact. Previous projects have shown
improvement but we would like a rigorous independent evaluation to test and add to some of these
findings.
Risk: A key risk to delivery of this programme is whether the programme responds to the need of the
institutions identified and is in line with GRSS priorities and the level of GRSS ownership in both the
short/ medium and longer term. This will be particularly important for sustainability and how well
GRSS can take on the learning and deliver even after IPs are no longer operating. These areas lend
themselves well to an evaluation and will not only be useful lesson learning for this project but also for
similar projects across DFID.
Demand: DFID South Sudan has a number of capacity building work across sectors (Service delivery
and governance and security projects), this evaluation will feed into the evidence base we are
building as an office to give us a better idea of what works in capacity building activities. The
evaluation will also include a suitable communication strategy to ensure that we are sharing evidence
effectively with all interested stakeholders.
Strategic importance: For the reasons covered in previous parts of the business case this project is
strategically important especially given the current economic crisis. The issues that are being
addressed here will have an impact across the DFID SS portfolio, better economic governance will
make our development programme more effective.
The budget for M&E for this programme will be 4.9% of the total allocated budget. With the IPs and
interested stakeholders, we will design an evaluation plan and ToRs which will include a set of key
questions to be evaluated, a suitable methodology and a delivery plan including a timeline and
management of the evaluation. This information will be used to ensure that we contract suitable
evaluators for the programme. The evaluation will run concurrent with implementation, the detail of
when data will be collected will be finalised in the ToRs. We expect that there will be interim
evaluation reports before the final evaluation is published.
E. Logframe
Please see the attached spreadsheet for the logframe for this programme. Over-achievement against
this logframe would involve two or more one of the output, outcome and or impact targets being
surpassed while no more than one is not reached; and under-achievement would mean two or more
targets not being reached, while no more than one is surpassed
Annex 1: Assessment against critical success criteria
Each of the 5 potential ‘intervene’ options can be assessed against the critical success
criteria (i.e. the assumptions from the theory of change) to understand whether they are in
fact feasible options to address the identified need. The critical success criteria are listed in
the table below.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Critical Success Criteria
Implementing partners can provide high quality assistance, and are flexible and adaptable
Projects respond to real capacity gaps, which are identified as such by the intended
‘beneficiaries’
The projects are owned by those being assisted
Support is intensive
Support lasts into the medium and long term
There is political will to act upon the project’s outputs
All public financial management institutions that could productively be included in the
assistance have been (including in particular accountability institutions)
All macroeconomic management institutions that could productively be included in the
assistance have been (including in particular accountability institutions)
The programme is not overreaching and overly ambitious
Option 1 has a record of success as a high quality technical assistance provider, with
virtually unparalleled flexibility. The CBTF has engaged well regarded consultants who
have usually delivered very good quality work (though there have been some notable
exceptions, such as the assistance provided by PWC for the Government Accountancy
Training Centre). The CBTF also tends to move quickly in procurement, and has a special,
rapid approval facility for small projects which allows priority, usually policy focused projects
to be supported at short notice.
The CBTF has a portfolio of both established and new projects. The former have evolved to
meet the needs of those participating, and the latter have been subject to extensive
discussion. With new programmes however there is also the risk that those consulted are
not those who will actually be assisted and / or that the consultation process was unable to
identify the correct issues. It therefore remains to be seen how well designed the new
components are, though the process and the CBTF’s history provide grounds for optimism.
The CBTF also has a strong steering committee with good Government participation –
including from a range of Ministries - which steers its direction. Government is a responsive
user of the CBTF, participating in monitoring visits, for example, and requesting additional
support through the flexible window regularly. Thus it is one of the development
programmes in South Sudan which has the strongest Government ownership.
CBTF support varies in intensity and length, as thought appropriate for each project.
However the vehicle itself began in 2005, and so it has the continuity of analysis and
oversight that results from being a longer standing mechanism. Support given by DFID
through the CBTF would have the advantage of building on this experience.
The extent to which CBTF is working with the grain of political will is complex to dissect,
given that it works on a variety of projects and a range of partners, and there is often a
combination of forces ranged for and against change in relation to any specific issue.
However a number of the priority projects for CBTF are under Ministries where the top
leadership is keen to see progress on the issues concerned, and the wider political agenda
of the Government supports governance improvements. Payroll is a good example of this.
The project to improve the management of payroll is supported by the very competent
Undersecretary for Labour and Public Service, and ties into the wider reform agenda,
currently being pushed by the Minister of Finance and President’s Economic Adviser
(amongst others) to rationalise Government under austerity.
Finally, the CBTF’s addition of an ‘accountability window’ means that it covers a range of
areas where crucial capacity gaps exist that prevent stronger economic governance.
However it should be noted that the fund’s focus is nonetheless on a limited range of nuts
and bolts interventions with a relatively narrow ‘public administration’ focus. The programme
does not touch on macroeconomic management at all.
Option 2, support to the IMF Trust Fund, engages the leading experts in macroeconomic
management to assist with South Sudan’s economic governance, thus they are clearly high
quality implementers. The IMF do not have such a strong record of working effectively
and flexibly in very fragile contexts such as South Sudan, however, and have been
relatively slow to build a presence in Juba. However they have done a substantial amount of
work examining how to be effective in fragile contexts, and their proposal to establish a Trust
Fund for South Sudan reflects this, including through the provision of resident TA.
The proposed IMF work is based on both consultation with Government on their priorities
and needs, and previous IMF assessment missions that have highlighted priority areas for
improvement. The detailed assessment missions provide an excellent objective sense of
where the gaps are, though the relatively high level nature of the consultations make it
difficult to know whether those who would have their capacity built on a day to day basis
share this view. The consultations do however provide a reasonable expectation that the
project would have Government ownership, though ongoing weaknesses in the relationship
between the IMF and the Ministry of Finance could threaten this.
The support will be of varying degrees of intensity, based on the issue to be tackled (with
some delivered through resident TA while others through occasional missions from
headquarters), and is initially envisaged to last a couple of years, though this may be
extended.
The strained relationship between the IMF and Ministry of Finance has the potential to
compromise the political will required to implement the outputs produced. However the
major partner will be the Bank of South Sudan, with whom they have built a stronger
relationship. Macroeconomic management is a fraught area, however, where the
international community have only had limited success in advocating for stronger policies,
despite considerable engagement. It is not clear, therefore, how much will there is to
address issues like the dual exchange rate, even if strong relationships are built between the
IMF and GRSS.
Finally, the scope of the IMF intervention has been carefully calibrated in line with the areas
where the IMF can offer strong expertise, the Government has indicated interest, and where
other donor partners are not yet working. It is also a relatively focused programme, all of
which suggests it is not overambitious. However this means that it focuses very much on
macroeconomic management, with some attention to some aspects of public financial
management. This is limited, however, and at a very high level, meaning that its contribution
to addressing the multiple barriers to poor public financial management is also limited.
Option 3, support from the World Bank to implement the High Frequency Survey, is also
high quality technical support. The World Bank has a very strong record of work on
surveys, and is considered a global leader in this area. And while in the initial post CPA
period it was not considered flexible and well adapted to the context in South Sudan, this
has improved over time, and the team who lead this work have shown a strong ability to
work around problems.
The survey is a core part of the National Bureau of Statistics’ workplan, and viewed by NBS
as an integral part of their strategy to increase the capabilities and skills of their staff.
Therefore the intervention is very well designed to fill real capacity gaps, as seen by the
‘beneficiaries’. For the same reason the ownership for the programme is strong. The
support is also relatively intensive and long lasting, with the World Bank working on a day
to day basis with a range of NBS staff (from survey planners to fieldworkers to data
analysers and disseminators) for the duration of the survey programme.
A concern, however, with the programme, is that the outputs – fresh data and analysis –
may not feed into decision making, i.e. that political will to utilise the results of this work will
be limited. This is less because of anticipated hostility to the programme and more because
most policymakers in South Sudan appear uninterested in data and evidence. Indeed, while
the NBS is a well-regarded technical agency, its impact thus far on policymaking is
negligible. The intervention is designed to address this, with a much more considered and
focused approach to producing the data in a form that is usable, and making it very freely
available to key data users, but there still remains a risk that the outputs that should result
from the intervention - the data and the stronger NBS – will not affect economic governance
as intended.
Finally, the scope of this intervention is very limited. It is carefully designed to tackle one
key driver of poor economic governance – the data and capacity to gather data on an
ongoing basis that can underpin stronger macroeconomic management (such as price and
exchange rate data) and public financial management (such economic and social trend data,
which is required in order to target public spending). However it is only applicable to this one
driver of poor economic governance. Skills, IT, management and various other capacity
gaps are not addressed.
Option 4 therefore combines the characteristics of the three separate interventions
described above. Most important to note is that, in combination, the interventions cover off
much more of the binding constraints to achieving the desired impact. Indeed, the three
interventions make a very natural fit, given the differing nature of the institutions worked
with, outputs produced, and ultimate objectives of the interventions. CBTF is PFM focused,
delivering a range of mainly “nuts and bolts” outputs, but not data, and with a strong
accountability window; the IMF work is mainly addressed to macroeconomic management,
but where it contributes to PFM it does so with strategic and policy interventions; and the
World Bank project supports NBS and the production of survey data, which neither of the
other interventions do, but which is vital for both the supply of and demand for economic
governance.
Moreover, by implementing the support through separate interventions, as proposed by
option 4 rather than one large project delivered by the same organisation there is reduced
risk of poor performance resulting from working on too many issues and institutions at once.
Option 5 combines all the benefits of option 4 with enhanced flexibility. While at least two of
the identified implementing partners are relatively flexible in terms of their priorities and ways
of operating, economic governance is a large terrain, and it is possible- indeed likely – that
new priorities will emerge that are not immediately simple for these implementing partners to
respond to, which involve working with different institutions, for example. For this reason
option 5 performs particularly well on the first critical success criteria.
On these grounds the different interventions are scored in the following way, in terms of their
likely ability to deliver the desired benefits. This suggests that option 6 is the preferred
option. However the margin by which this outweighs the other options is fairly slim, and
options 4 and 5 are significantly more expensive than options one to three, suggesting the
need for a more quantitative assessment of benefits.
Critical Success
Criteria
Quality and flexibility
Real, mutually agreed
capacity gaps
Ownership
Intensity
Duration
Political will
PFM issues tackled
Macroeconomic issues
tackled
Not overambitious
Total score (out of
Option
1
Score
Option
2
Score
Option
3
Score
Option
4
Score
Option
5
Score
4
4
3
3
4
5
4
4
5
4
4
4
4
4
4
0
2
4
3
2
1
4
4
5
3
3
1
2
3
4
3
3
5
5
3
4
3
3
5
5
4
32
4
26
5
32
4
35
4
36