Donor harmonisation makes life easier in Ministry of Finance

A key point in the Paris Declaration is to harmonise development aid from foreign donors, and to make sure that the efforts are aligned with government policies and strategies. Keith Muhakanizi, Deputy Secretary to Treasury explains how such harmonisation is making life easier in the Ministry of Finance, but has not yet resulted in concrete developments on the ground. Interview by Vibeke Quaade.

The Paris Declaration is from 2005. When did Uganda start to implement the aspects of donor harmonisation?
Right away, and by now, most donors have come on board. The first stage was to sensitise both ourselves and the donors about the Paris Declaration. The second, and the hard one, was to go through the negotiations on how to implement it.

What have you achieved so far?

We are ahead of most countries on what we call ‘division of labour among the donors’. We have agreed that each donor should concentrate on the areas or sectors in which they are comparatively advanced. For example, we have signed an agreement with the Belgians to remain in two sectors, health and education. For the Danes it is water and agriculture. The Danes also support governance and democratisation, but that is not a sector programme and not on my table.

Harmonisation and the labour division makes life much easier for us. We are now going to deal with technical assistance, with scholarships, with budget or project support from each donor, within the framework of two sectors, instead of in many sectors. In practical terms this means that, instead of dividing, for example, US$ one million into many sectors, we only have to divide it into two sectors for each donor. Both the administration and accountability from our side have become much easier. Now we only have to track in two sectors instead of a multitude of sectors as we did when the money was scattered all over.

What is you next step?
It will be joint budget support. In the past we made separate agreements with each donor. Starting this financial year [2009/10] we are moving into joint budget support. This will further increase effectiveness and reduce cost of administration.

The Paris Declaration is all about increasing aid effectiveness in order to achieve the MDGs [UN Millennium Development Goals] by 2015. What are the concrete results on the ground of the donor harmonisation and how do you measure them?
As I said, the administration of the donor support has become much more efficient, and with time, the end result will serve the MDGs. But at this stage it is difficult to point to concrete results. It takes time and evaluations.

What are the main challenges of the donor harmonisation?
When we first began to speak about the Paris Declaration in 2005, our priority was to make sure that the harmonization was done in accordance with the PEAP [Poverty Eradication Action Plan]. By now, most of the donors are supporting us within the framework of the PEAP. But some are still left outside the PEAP; the new, untraditional donors, like China and India. Legal constraints from their home countries are holding others, like USAID, back from participation. This is a main challenge for us. I wish everybody would get on board.