Sector-wide Approaches:

Challenges and Opportunities

for Rural Development

Eastern and Southern Africa

 Background

• By mid-1990s, concern for aid effectiveness:

– Development ‘projects’ criticised for their
‘cocooned’ approach, reliant on TA
– Recognition that development cooperation
requires supportive policy environment to
achieve impact
– Donor conditionality had been poor at
achieving policy change
– Perception that donors, acting in isolation,
represented a part of the problem
 Response: new approaches

• New focus on poverty reduction as prime

purpose of government expenditure and
development assistance – MDGs, PRSPs
• Priority to ownership and institution-building
for sustainable development
• Relationships between governments and
donors need to be partnership-based
• Recognition of importance of effective and
efficient management of public expenditure
and accountability – MTEF
• Aid should support accountability of
governments to their people … harmonisation
 Sector-wide Approaches (SWAps)

• Coordinate government and donor assistance in

support of a common sector policy and
expenditure framework under government
leadership
• A process of delivering policy and institutional
reform, not simply a financing mechanism – can
be financed by several instruments
• ‘The process by which what needs to be done is
done’

… Not to be confused with the financing

instruments used to support them
 Financial (aid) instruments for SWAps

• General Budget Support (GBS)

– Channelled through Treasury but into the general
fund, subject to public expenditure priorities
• Sector budget support
– Through the Treasury, but earmarked towards
specific sectors
• Sector basket funding
– Extra accountability arrangements and earmarking
• Project support (gov’t or parallel systems)
– Can have advantages of flexibility, timing, risk
… So GBS is not a substitute for SWAps
 Relationship between development
approaches and aid instruments

Development Approaches Financial Aid Instruments

(what is done) (how it is financed)

PRSPs General
GeneralBudget
BudgetSupport
Support
PRSPs
Sector
SectorBudget
BudgetSupport
Support
SWAp
SWAp SWAp
SWAp
Sector
SectorBasket
BasketFunding
Funding

Project
ProjectSupport
Support
 Evolution of agricultural SWAps in the
Region: steps 1 and 2

• Mid-90s, ASIP: (e.g. Zambia ASIP):

– World Bank-led, little government ownership
– unsatisfactory implementation and weak
impact
• Late-90s, SWAp: (eg Proagri I, Mozambique):
– A process of policy and institutional reform,
not just investment … but difficulties:
– Key expenditures in other sectors
– Policy issues key for Ministry of Agriculture
– Enabling not doing role
– Broad stakeholder involvement
 Evolution of agricultural SWAps in the
Region: the 3rd step

• 2000 – onwards: ‘Second generation’

SWAps (e.g. PMA Uganda)
– Internalise lessons from earlier models
– client-driven: ‘what constrains livelihoods’
– multi-sectoral, rural pillars of PRSPs – go
beyond Ministries of Agriculture
– Recognise importance of policy and
institutional issues
• New challenges: coordination between
Ministries, with other non-government actors,
enabling role of Ministry of Agriculture, PRSPs,
decentralisation, financing of ‘agriculture’
 Current status of agricultural SWAps in
the Region

Of the 21 countries in the Region:

• 7 have, or are moving towards, some form of
agriculture SWAp or sector framework
• Of those 7 countries, all already have a PRSP
• Of those 7 countries, six receive assistance
through GBS, and 3 receive basket funding

But only few of the second generation SWAps

are actually underway in practice … early days
to assess performance
 Performance of agricultural SWAps to date

• Policy and institutional reform: positive, but

‘informal’ rules difficult
• Financing: Complex in some cases, relaxed in others –
ceilings, unprotected budgets, expectation of
transparency & compliance
• Focus of SWAps: later ones focus more on key issues
… but new cross-sectoral challenges
• Link to PRSP: early SWAps not adequately poverty
focused, later ones better; nest in PRSPs
• Impact on poverty: little evidence so far, some
promising experience
 What are the lessons for agricultural
sector support? (1)

• No blueprint – country-specific context

• Label ‘SWAp’ not important – distinguish from
sector financing … a process
• Result oriented, root causes of poverty and poor
performance
• Policy and institutions as important as money
• Can be supported by various financial
instruments, including GBS
• Complementary to PRSPs … national goals
• Civil society engagement complements supply
of policy with demand for policy
 What are the lessons for agricultural
sector support? (2)

• Must be integrated with PRSP, MTEF,

decentralisation, civil service reform etc
• Nested within budget process to strengthen PEM
.. hard budget constraint
• Ownership and commitment is essential .. sector
and national
• Realism and flexibility essential – reform will be
slow … political dimension
• Governments manage donors, not the other way
round
 Some questions about SWAps (1)

• Are SWAps effective mechanisms for policy and institutional

reform? How could they be made better? Are there other,
preferred alternatives?
• Do cross-sectoral second generation SWAps focus on key
issues? Are the concerns of farmers, the private sector and
government adequately reflected?
• Is the requirement for cross-sectoral coordination implied by
second generation SWAps realistic? How can this be achieved?
• Are SWAps effective at reducing the transaction costs of
dealing with many donors? Do they improve government-donor
interactions?
• Do they support PRSPs? Do they make relationships between
sector and central Ministries more effective?
 Some questions about SWAps (2)

• Where does the move towards SWAps, PRSPs, GBS, MTEF etc
come from? Who really wants them? Do sector Ministries
want them?
• Does the adoption of SWAps and PRSPs mean the end of
projects? What instruments will we have in future, and why?
• What are the implications of a shift from project to sector
financing for agriculture? What happens to finance for
agriculture under GBS and MTEF?
• Are SWAPs more effective at enhancing agricultural growth
and reducing rural poverty?
• Do SWAps enhance government ownership of development
processes, and allow rural people’s priorities to be addressed?
 How should IFAD support SWAps in the
Region?

• Should IFAD focus on SWAps? What should it stop

doing?
• What can IFAD add to SWAp development and
implementation?
• Does IFAD need to change the way it does business to
give better support to SWAps?
• Should IFAD continue to support government-owned
projects, or does SWAp engagement satisfy all sectoral
needs?
• Under what conditions should IFAD provide GBS?
 Thank you

Eastern and Southern Africa