Reaching the marginalized: EFA global monitoring report, 2010; 2010

010CHAPTER 42Education for All Global Monitoring ReportSigned pledgesfrom donorsamounted toUS$389 millionin 2008 but fallto US$26 millionfor 2011Box 4.14: Mozambique — slow delivery under the Fast Track InitiativeMozambique’s experience graphically illustratesthe damaging consequences of the change inCatalytic Fund procedures introduced in 2007.Having built up an impressive track record onreform, the country found its efforts to securefunds, along with donor efforts to align supportbehind national planning, thwarted by inflexibleenforcement of World Bank rules.Mozambique, one of the first countries to submitan application to the expanded Catalytic Fund,was allocated US$79 million for 2008–2009.The government programmed this into its budgetframework for 2008. With support from the localdonor group, the government asked for the fundsto be channelled through a pooled arrangementdeveloped to support the country’s EducationSector Strategic Plan. This well-established sectorfund channelled support from six major bilateraldonors (Canada, Finland, Germany, Ireland, theNetherlands and the United Kingdom). Donorconfidence in improved financial managementsystems had led to an agreement in which donorscommitted to using national systems for planningand financial management, including procurement.Application of the new Catalytic Fund proceduresled to problems from the outset. The World Bankdid not accept the pooled fund arrangement thatcomplied with IDA rules. It interpreted its fiduciaryresponsibility as requiring a full financial andmanagement appraisal of systems used by theMinistry of Education and Culture. While the WorldBank concluded that the financial managementpractices in Mozambique were reasonable, andbetter than average in the education sector,it found that a national law stipulating ‘domesticpreference’ in procurement policy was inconsistentwith IDA project rules.Proposals from the World Bank made the releaseof finance conditional on either Catalytic Fundsupport being channelled through a separate projectoperating outside the pooled funding arrangement,or a change in the rules governing the pooled fund.The government and donors strongly resisted bothoptions. Reversion to project-based aid was seenas a step back from the principles of sector-widesupport that the FTI was created to encourage.And there was no support for changing pooledfund rules that had been painstakingly negotiated.Months of acrimonious discussion followed.Donors asked the Catalytic Fund committee totransfer supervising authority for the Mozambiquegrant to a member of the local donor group. Thecommittee agreed in principle, but said thedecision had to be taken at a local level wherenegotiations were deadlocked. Under pressure fromthe World Bank, the Government of Mozambiqueeventually agreed to a technical annex amendingthe procurement section of the pooled fundagreement. It registered a strong protest, however,pointing out that the country had been forced totake several steps backwards on donorharmonization and coordination.As of March 2009, two years after the initialCatalytic Fund allocation, Mozambique had receivedUS$28 million of the US$79 million grant.Sources: FTI Secretariat (2007b); Bermingham (2009a);Bartholomew et al. (2009).This would appear to be a departure fromthe principles of the Paris agenda.Recent innovations underline the fact that reformis possible, but the systemic problems behindthe poor disbursement record cannot be resolvedcase by case. Countries allocated grants in 2007still have to meet the full rigour of World Bankrules. Several of these countries, includingMauritania and Sierra Leone, were still waitingto receive their first disbursements at thebeginning of 2009. Countries with plans endorsedafter 2007 also face uncertain prospects.Long-term predictable financingis still missingThe long-term planning horizons for educationrequire long-term aid financing horizons, withdonors making commitments over ten years.The Fast Track Initiative and the Catalytic Fundhave failed to address this challenge.The expanded Catalytic Fund arrangement held outthe prospect of more countries getting assistanceover longer periods through potentially renewablethree year grants. While this time-frame remainedtoo short, it was a step in the right direction. In theevent, the fragility of the Catalytic Fund’s financingbase has compromised even this limited move.Delivering more predictable support requires more258