In a review of donor management of general budget support in Mozambique the Auditors General of Denmark, Sweden and Norway criticised the growing bureaucracy around GBS there (Development Today 2009). They stated that 375 million USD was provided as budget support by sixteen bilateral donors and three multilaterals (World Bank, EC and African Development Bank). These donors operate as a joint donor group in negotiations with the government. In addition to a joint secretariat and steering committee the donors have set up 28 working groups involving 360 officials69. A similar number of staff is involved on the Mozambique side. The authors conclude that the burden of managing budget support programmes, in particular monitoring mechanisms have become too onerous. Decision making is also affected. Killick et al. (2005 ) suggest that within the ‘G-16’ group of GBS providers there are some who subscribe only to a limited extent to the desirability of the GBS modality and principle of mutual accountability and who pay a minimal subscription in order to ‘buy a seat at the table’. They comment on the fact that smaller GBS donors are able to exert pressure on policy (and thus slow down decision making) to the same extent as larger ones. 3.3.6
Unpredictability has serious macro-economic consequences for Mozambique
The Performance Review of Aid Partners (Killick et al. 2005) suggests that the number of multi-annual arrangements is increasing but most of these are still only for two years. Whilst some reported delays were due to perceptions of poor performance by government, others were experienced due to donor systems – overdue audits, lack of a new government agreement, late decisions by national donor government and administrative requirements at HQ. The consequences as perceived by the Mozambique government are as follows: • Cuts in overall expenditure, particularly of investment; • Increasing domestic debt and debt service; • Costly emission of treasury bills; • Increase in interest rates; • Monetary and exchange rate instability. In particular the government blames donors for the lack of clarity and harmonisation with respect to criteria that have to be fulfilled for disbursements of take place. 3.3.7
Conclusion
Overall we can see that although Mozambique is one of the best examples of donor coordination with a donor coordination platform, good database and a long history (and relatively positive experience) with budget support. However donor proliferation and continuation with project modalities weakens these positive aspects. High numbers of donors each with their own prerogatives undermine budget support which becomes difficult to manage. The literature reviewed here concluded that programme arrangements only work where donors are committed to them. Wide membership combined with lack of common views make these arrangements unmanageable. This commitment to procedures and policies is difficult to obtain through voluntary codes of conduct unless government leadership is strong and accountability mechanisms are put in place. Table 24 below presents some possible savings of aid effectiveness measures for Mozambique. These savings were calculated on data for 2007 and are presented also as percentages of CPA for that year. It should be noted that the costs presented here cannot necessarily be summed to find an overall total figure of possible savings. Savings made by reducing fragmentation and increasing use of programme-based approaches are particularly likely to overlap.
69
The review processes for the GBS Performance Assessment Framework involve 23 working groups each of which invariably results in a long list of recommendations for the government to act upon (Martinez 2006).
64