Aid Strategy forthe Government of the Republic of South Sudan (2011)- Govt. South Sudan

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    Aid Strategy for

    the Governmentof the Republicof South Sudan

    Ministry of Finance and Economic PlanningRepublic of South Sudan

    November 2011

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    2/28Design by www.stevendickie.com

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    Foreword 2

    Executive summary 3

    Introduction 5

    Progress in implementing the 2006 Aid Strategy 5

    Objective 6

    Partnership Principles 7

    Mechanisms for aid coordination 8

    High-level partnership forum 8

    Quarterly Governmentdonor forum 8

    Sector Working Groups and the Sector-based Approach 9

    The Inter-ministerial Appraisal Committee and the appraisal of development assistance 9

    Aid Information Management System 10

    Benchmarks for aid delivery 10

    Aid is aligned with overall Government and sector policies and plans 10

    Aid is managed by Government institutions and uses Government systems 11

    Aid is aligned with the Government budget cycle and channelled through Government PFM systems 12

    Aid supports institutional capacity and systems 13

    Aid is oriented to the achievement of outcomes 13

    Aid is provided coherently and fragmentation is avoided 14

    Aid is aligned to the New Deal for Engagement in Fragile States 14

    Design of aid operations 16

    Working with Government institutions 16

    Choice of aid instruments 16

    Managing risks 16

    Implementing the Aid Strategy 18

    Monitoring the implementation of the Aid Strategy 18

    Strengthening Government systems and creating the conditions for effective aid 18

    Changing the way aid is delivered 19

    Conclusion 19

    Annex 1: Indicators for monitoring donor performance 20

    Annex 2: Aid and the budget cycle 21

    Annex 3: Development of innovative aid operations 22

    Contents

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    Since the passage o the Government Aid Strategy in 2006 the Government o South Sudan has made considerableprogress in managing aid to ensure that it contributes to the achievement o our overall vision or the nation. Coordinationmechanisms such as the Budget Sector Working Groups and the Inter-Ministerial Appraisal Committee have been established,a new database or recording and monitoring donor projects has been installed and a number o unding mechanisms havebeen set up to ensure that aid reduces the burden on government and aligns more eectively behind government priorities.Nevertheless, signifcant challenges remain, not least the current ragmentation o aid and lack o attention to strengtheninggovernment systems or the management o aid delivery.

    This revised Aid Strategy has been developed in conjunction with the drating o the frst comprehensive Plan or the newRepublic o South Sudan. The South Sudan Development Plan centres on building strong institutions needed to promotea transparent and accountable state, as well as the promotion o private sector-led economic growth and basic servicedelivery to reduce the incidence o poverty among our population. Aid will play a critical role in the implementation othe Plan, representing a signifcant proportion o total public expenditure. It is thereore crucial that the government anddevelopment partners work harder than ever to improve aid eectiveness across all sectors to secure maximum dividendsor the population. This Aid Strategy sets out a ramework intended to achieve this objective.

    The process o drating this updated Aid Strategy has allowed us to revisit the core principles o the 2006 Aid Strategy inlight o the challenges we have aced, as well as the need to ensure the Strategy remains relevant ollowing the conclusiono the interim period and the independence o South Sudan. It has also allowed us to incorporate the key messages arisingrom the ongoing international dialogue on aid eectiveness in ragile and conict aected states. Thus, this Strategy is anupdate o the 2006 Government o Southern Sudan Aid Strategy with a ocus on the next fve years, at which point thegovernment will review the Strategy again.

    The development o the Strategy has gone through several stages o consultation, both within government and with ourdevelopment partners. Finally, it was approved by the Council o Ministers in August 2011. I sincerely hope that this Strategyachieves it objective o improving the eectiveness o development assistance so that the people o South Sudan beneft

    ully rom the aid provided to them.

    Kosti Manibe Ngai

    Minister of Finance & Economic Planning

    Republic of South Sudan

    Foreword

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    Aid Strategy for the Government of the Republic of South Sudan

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    Background and objective

    Between 2005 and 2010, South Sudan received in excesso $3 billion in international assistance. In 2006, theGovernment o the Republic o South Sudan published anofcial Aid Strategy outlining the process or coordinatingand aligning development assistance in South Sudan. ThisAid Strategy replaces the 2006 strategy.

    The objective o this Aid Strategy is to provide a rameworkor development partners to improve the eectiveness odevelopment assistance and humanitarian aid delivery inSouth Sudan, by aligning unding with the Governmentscore priorities.

    Partnership principles

    The Aid Strategy is based on a set o principles that areintended to inorm the partnership between the Governmentand its development partners. Development assistance should:

    1. BeGovernment-owned and -led.2. Be aligned with Government policies as set out in the

    South Sudan Development Plan (SSDP) and BudgetSector Plans (BSPs).

    3. Use Government systems and institutions or publicfnancial management (PFM), policy and servicedelivery, including at the State level.

    4. Be predictable, over both the short and medium term.

    5. Be coordinated and harmonised through sectoralmechanisms.

    6. Be managed or results with project outcomes trackedalongside sectoral policy outcomes.

    7. Be based on the principle o mutual accountability.

    Mechanisms for aid coordinationThe Aid Strategy outlines our key mechanisms or aidcoordination:

    1. A new High-level Partnership Forum (HPF)will providean opportunity or senior members o the Governmentand development partners to discuss key strategicpolicy issues o interest to both groups.

    2. The Quarterly GovernmentDonor Forum (QGDF) willserve as the central mechanism or coordination andinormation exchange between the Government anddevelopment partners.

    3. The Inter-ministerial Appraisal Committee (IMAC) will playa strategic role by reviewing and approving all sectoral AidFinancing Strategies, donor Country Strategies and majoraid operations expected to disburse over $20 million.

    4. Sector Working Groups (SWGs) will be enhancedthrough the introduction o a more strategic Sector-based Approach, and a lead donor will be establishedor each sector.

    Underlying the our main mechanisms or aidcoordination will be the Aid Inormation ManagementSystem (AIMS), which is an important tool or planninguture development assistance and reporting on existingaid operations. Data on the system will be secure, butalso publicly available to support eective coordinationamong partners.

    Benchmarks for aid delivery

    Drawing on the Partnership Principles, the Strategy setsout six core benchmarks or aid delivery, towards whichthe Government and development partners will workover its lietime:

    1. Aid is aligned with overall Government and sectorpolicies and plans.

    2. Aid is managed by Government institutions and usesGovernment systems.

    3. Aid is aligned with the Government budget cycle andchannelled through Government PFM systems.

    4. Aid supports institutional capacity and systems.

    5. Aid is oriented to the achievement o outcomes.

    6. Aid is provided coherently and ragmentation is avoided.

    The Aid Strategy sets out the nature o these benchmarksand the role o the Government and its partners in achievingthem. The Government does not expect the benchmarks tobe achieved overnight. However, development partners areexpected to work with the Government to make signifcant

    moves towards achieving these benchmarks over the lietimeo the Strategy. The transition to the delivery o aid usingcountry systems will be gradual, carried in collaboration withdevelopment partners.

    The Aid Strategy is aligned with the principles o the NewDeal or Engagement in Fragile States (the New Deal), a newramework or international support to ragile states endorsedat the 4th High-Level Forum on Aid Eectiveness in November2011. The New Deal recognizes that support or ragile statesshould ocus on Peacebuilding and Statebuilding Goals, whichare necessary preconditions or sustained development. TheStrategy is one o the Governments means o implementing the

    New Deal by contributing to meeting the FOCUS andTRUSTprinciples (see Box 6). These principles provide a rameworkor a new country-owned and country-led engagement and aset o commitments to improve the eectiveness o aid.

    Executive Summary

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    Design of aid operations

    All aid operations should be designed in partnership withthe Government institutions responsible or managingand implementing them, in close collaboration with the

    respective SWGs.

    The Strategy sets out preerences or how dierentaid instruments should be used, which should guidedevelopment partners when designing their aid operations.It introduces two new aid instruments that use Governmentsystems: local services support (LSS), which will support thesystem o state conditional transers to und decentralisedservices; and budget support, which will be used orunding overall Government service delivery at both thenational and state level in support o policy priorities.

    A ramework or the management o the risk associated

    with providing aid to South Sudan is also set out.

    Implementing the revised Aid

    Strategy

    The ramework or monitoring and evaluation (M&E) o theimplementation o the Aid Strategy has three levels:

    1. Monitoring the implementation o the SSDP andsectors overall.

    2. Monitoring o the results o aid operations themselves,using the AIMS.

    3. Monitoring o donor perormance towards achievingthe benchmarks or aid delivery.

    This will help the Government and development partnersto ascertain the degree to which implementation o thisAid Strategy has contributed to more eective aid and thecontribution o that aid towards the achievement o theGovernments policies.

    In terms o implementation, the Government isresponsible or strengthening its own systems and cancreate an environment or more eective aid. In orderto achieve this:

    1. The Government will establish new and strengthenexisting aid coordination mechanisms, and ensurestrong leadership o these.

    2. The Government will set out clear guidelines or thedesign and management o aid operations, showinghow they can use Government systems.

    3. The Government will develop an approach to capacity

    development.4. The Government will prepare and implement plans to

    improve core governance unctions, including thosewhich address the specifc fduciary and system risksthat concern development partners.

    5. The Government will strengthen its policies, plans anddelivery mechanisms at the sector level.

    6. The Government will agree with development partnersclear milestones and temporary saeguards which willallow aid to use Government systems.

    In the spirit o mutual accountability, Government expectsdonors to respond to its eorts to create a conduciveenvironment or aid by changing the way aid is delivered.This will require that:

    1. Development partners support, use and respond to aidcoordination mechanisms and instruments.

    2. Development partners increase the amount o aidmanaged by the Government.

    3. Development partners ocus their capacity developmentactivities on strengthening Government policies, systemsand delivery systems.

    4. Development partners provide aid, including projectsupport, that increasingly uses Government systems.

    5. Development partners begin to ocus project supportto the Government on inrastructure provision andinstitutional development, and away rom undingoperational aspects o service delivery.

    6. Development partners provide LSS or decentralisedlevel service delivery.

    7. Development partners provide the Government withbudget support, starting at the sectoral level.

    8. Development partners reduce the ragmentation o aid.

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    Aid Strategy for the Government of the Republic of South Sudan

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    This Aid Strategy sets out the Government o theRepublic o South Sudans principles and rameworkor the management o development assistance. It isintended to replace the 2006 Aid Strategy and has beendeveloped alongside the South Sudan DevelopmentPlan (SSDP). At the end o the six-year ComprehensivePeace Agreement Interim Period, such a review othe Aid Strategys core principles also provides anopportunity to take into account key developments inaid management, particularly as the new Aid Strategyhas a ocus on improving the design and eectiveness outure aid operations. The revision takes into account key

    international agreements on the provision o developmentassistance to which developed and developing countrieshave signed up. This includes the Accra Agenda orAction, the OECD principles or engaging in ragile statesand the New Deal or Engagement in Fragile States.

    Introduction Progress inimplementing the

    2006 Aid Strategy

    The Governments frst Aid Strategy1 was approved bythe Council o Ministers in 2006, ollowing a consultativeprocess among key stakeholders. In 2007, it was ormallyendorsed by all development partners and submitted tothe South Sudan Legis lative Assembly.

    The 2006 Aid Strategy was intended to co-ordinatedevelopment aid to South Sudan within a Government-led ramework, so that the people o South Sudan beneft

    ully rom the aid which is provided to them. It set out keyprinciples (Box 1) based on the 2005 Paris Declaration on AidEectiveness. In particular, it aimed to harmonise and aligndonors aid delivery, so that development assistance wouldbe provided in a manner that was cost-eective, accountableand aligned with South Sudans priorities, systems andprocedures. The Strategy noted that development assistance,when provided properly, can contribute positively toeconomic growth, especially in countries which have goodpolicies and a strong institutional environment. It can alsoenhance service delivery, and act as a useul support toGovernment-led policy reorm and capacity building.

    To implement these principles, the 2006 Aid Strategyset out procedural mechanisms designed to ensure thatdevelopment assistance contributed positively to SouthSudan. The key mechanisms were as ollows:

    Budget Sector Working Groups (BSWGs) wereestablished to un...

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