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ENHANCED INTEGRATED FRAMEWORK
TRUST FUND MANAGER
Financial and fiduciary dimensions of the Enhanced
Integrated Framework
Asia Regional Workshop, Kathmandu, Nepal, June 2010
Table of ContentsI. EIF NORMATIVE AND STRATEGIC FRAMEWORK 1. Objectives 2. Strategies 3. Principles 4. Target countries
II. TFM WITHIN THE EIF PROCESS 1. Mandate and Functions 2. Operational Principles 3. Functional Structure 4. Regional Settings
III. TFM OPERATIONAL PROCESSES AND TOOLS 1. Overview of Tier 1 and Tier 2 Projects 2. Project Appraisal and Capacity Assessment Exercises 3. Project process
IV. TFM MAIN RESULTS 1. Legal arrangements 2. Financial outlook 3. Donor Contributions 4. Status of Tier 1 projects 5. Pipeline
IEIF
NORMATIVE AND STRATEGIC
FRAMEWORK
EIF Normative Framework
Strategic Objectives
To mainstream trade into LDC’sNational Development Plans such
as Poverty Reduction StrategyPapers (PRSP)
To assist in the coordinated delivery of Trade-Related TechnicalAssistance (TRTA) in response tothe needs identified by the LDCs
To develop the capacities of the LDCs to trade, including capacitybuilding and addressing supply
constraints
Strategic Principles
Country ownership of the process
Tripartite partnership: LDCs, donorsand EIF Agencies
Demand driven and tailor-made approach
Participatory approach, specially by Involving the private sector at all stages
Overarching goal: to enhance the capacity of the LDCs to integrate into multilateraltrading system in order to reduce poverty and benefit from increased market access.
EIF Strategic ContextThe EIF is both a trade development strategy and a trade development program in
support to the overall welfare increase of the LDCs
Trade development strategy(Facts and Assumptions)
There is strong relationship between trade and economic growth
There is not automatic link betweentrade, economic growth and poverty
reduction
The combination of trade reforms andpoverty reduction strategies tends to
increase poor countries welfare
Sound institutional and policymechanisms both at international and
national levels can make possiblethat poor countries expand their share of
income generated by trade
Trade development program(operational strategies)
Mainstreaming trade into national policies and poverty reduction
strategies
Fostering national ownership of trade policy reforms
Strengthening national capacitiesfor trade policy formulation and
implementation
LEAST DEVELOPED COUNTRIES
The Least Developed Countries (LDCs) are the focus of the EIF. LDCs are countries, which exhibit the lowest indicators of socio-economic development. A country is classified as LDC
if it meets three criteria and does not have a population larger than 75 million: • A low income criterion based on GNI per capita
• A human assets criterion based on the HDI• An economic vulnerability criterion involving a composite index based on
indicators of natural shocks, trade shocks, expose to shocks, economic smallness and economic remoteness
Africa
(33 countries) Asia
(10 Countries) Oceania
(5 Countries) Americas (1 Country)
Angola Benin Burkina Faso Burundi Central African
Republic Chad Comoros Democratic
Republic of the Congo
Djibouti Equatorial
Guinea
Eritrea Ethiopia Gambia Guinea Guinea-
Bissau Lesotho Liberia Madagascar Malawi Mali Mauritania Mozambique Niger
Rwanda Sao Tome
and Principe
Senegal Sierra
Leone Somalia Sudan Tanzania Togo Uganda Zambia
Afghanistan Bangladesh Bhutan Burma Cambodia East Timor Lao People’s
Democratic Republic
Maldives Nepal Yemen
Kiribati Samoa Solomon
Islands Tuvalu Vanuatu
Haiti
II
TFM WITHIN THE EIF PROCESS
TFM Mandate and Functions
Mandate
The TFM was given a broad mandatecomprising full Fiduciary Responsibility.
The TFM exercises its full fiduciary responsibility on behalf the
donors and the EIF Board as required by the Accountability Framework.
The TFM will follow UNOPS financial policies, rules and procedures in
compliance with the objectives and modalities of the EIF.
Functions
Trustee functions
Preparation of budgets and forecasting
Program financial management
Fiduciary appraisal of project proposalsand assessment of the grant
recipient’s capacities
Recommendations on capacitybuilding and training
Monitoring and Supervision (addressing program financial management and
fiduciary matters)
Reporting
TFM Operational Principles
EffectivenessTFM alignment with the EIF overarching goal, objectives,
strategies and principles
AccountabilityTFM obligation to demonstrate that work has been conducted in accordance with agreed rules and standards and to report fairly and accurately on
performance results vis– a –vis mandated roles/or plans
SustainabilityTFM ability to assist in
making NIU accountable and sustainable in
the long term
EfficiencyTFM efficient management and
performance as a result of obtaining maximal outputs with
minimal inputs
TransparencyTFM operations and reports are
clear honest and open to the concerned stakeholders
EIF - TFM OrganigrammeEIF Board
Executive SecretariatExecutive Director GVA
UNOPSSWOC Director GVA
Executive OfficeExecutive Officer
Portfolio Assistant
Finance OfficerGeneva
Implementation Advisor Geneva
Legal AdvisorGeneva
Portfolio ManagerAdmi. Assistant
NAIROBI
Portfolio ManagerAdmi. Assistant
DAKAR
Portfolio ManagerAdmi. Assistant
BANGKOK
Portfolio ManagerAdmi. Assistant
JOHANNESBURGOffice still to be opened
DAKAR (11)Benin, Democratic Republic of Congo
Guinea, Liberia, Mali, Senegal, Sierra Leone, Togo, Chad, Niger and
Mauritania
JOHANNESBURG (6)Angola, Mozambique,
Zambia, Equatorial Guinea, Sao Tome and Principe,and
Madagascar
BANGKOK (15)Afghanistan,
Bangladesh, Bhutan Cambodia, Lao,
Maldives, Myanmar, Nepal, Kiribati, Samoa, Solomon Islands, Timor Leste, Tuvalu, Vanuatu
and Yemen
NAIROBI (11)Djibouti, Ethiopia,
Central African Republic, Lesotho, Tanzania, Uganda, Burundi, Rwanda,
Sudan, Malawi and Comoros
GENEVA(Haiti and
Burkina Faso)
Countries to be initially assisted by Geneva, Dakar and Nairobi offices
III
TFM OPERATIONAL PROCESSES AND
TOOLS
OVERVIEW OF TIER 1 AND TIER 2 PROJECTS
TIER 1 PROJECTSTypes of Projects• Building the human resource capacity of EIF NIAs• Providing operational support to NIAs• Preparing and/or update of the DTIS• Facilitating and supporting trade mainstreaming actions
Budget and TimingAn estimated amount of US$77 million is available for Tier 1 from the EIF-TFM. The funding ceiling per country is set at US$2,000,000. Such a budget can be used for a period of five years for the following actions:• Pre-DTIS support up to US$50,000• DTIS up to US$400,000• DTIS update up to US$200,000• Support to NIAs up to US$1,500,000
LDC’s Eligibility• All LDCs participating in the EIF initiative are eligible
Approval Process• Formulation of project proposals• Appraisal and approval of proposals• Awarding
Execution Modalities• Option 1: LDC Government execution (strongly
encouraged)• Option 2: Execution by one of the six EIF agencies or
another entityMonitoring & EvaluationThe day-to-day monitoring of activities will be ensure by The NIU/FP
Review and EvaluationThe EIF Board and the EIF Steering Committee may request that a Mid-Term review or an evaluation of specific Tier 1 projects be undertaken
TIER 2 PROJECTS• Type of Projects• Assistance to implement WTO or trade policy commitments• Project preparatory activities• Trade mainstream activities to integrate DTS into PRSPs• Capacity building activities• Formulation and implementation of sectoral and national export
development strategies• Small projects to enhance the supply-side response of the country• Specific actions to enhancing SMMEs competitiveness • Assistance for WTO accession• Strengthening of trade support services• Preparation of sector-wide approaches (SWAP) for priority sectors
Budget and TimingAn estimated amount of US£320 million is available for Tier 2. Out of this, approximately half, i.e. US$160 million, will be borne by the EIF-TFM.
LDC’s EligibilityAll LDCs participating in the EIF initiative and having validated the DTIS are eligible
Approval Process• Formulation of project proposals• Appraisal and approval of proposals• Awarding
Execution ModalitiesOption 1: LDC Government executionOption 2: Non-LDC Government execution. Three main possibilities can be considered: (i) UN Agency; (ii) Other development agency; (iii) NGO, private sector, consulting firm, a research or academic institution
Monitoring & EvaluationThe day-to-day monitoring of activities will be ensured by the NIU/FP in coordination with the Executing Entity
Review and Evaluation: Review and evaluation modalities will vary depending on the LDC and the specific project’s content
Fiduciary Assessment by TFM
Project fiduciary appraisal (Desk Review)
Strategy Approach
National fiduciary responsibility
framework
Administrative fiduciary process
Workplan
Logical Framework
Budgeting
Monitoring & Evaluation
Reporting
Capacity assessment of principal grant
recipient
Implementation Capacity
Financial Assessment Capacity
and IT
Procurement
M & Supervision
Other capacities (legal capacities, anti-corruption
policies, social and environmental
policies)
Trade Capacity Assessment by
ES(Appraisal Criteria)
EIF Context
Project characteristics
Implementation arrangements
Economic Analysis
Technical assessment
Trade capacity assessment
NSC & NIU(Focal Point)
Formulation of Project Proposal
and identification of Implementing
Entity(Selection of a
government entity as the preferred
option)
Recommendations Memorandum(Incorporating both ES trade assessment and TFM fiduciary assessment)
TIER 1 Project Appraisal and Assessment Exercises
PHASE I: before a Capacity Assessment Mission takes place
PHASE II: after a Capacity Assessment Mission takes place
PHASE III: after project approval by the EIF Board
ES submits LDC project proposal to TFM for
assessment
TFM makes a desk
review and produces a
report
TFM sends desk review report to ES including
mission TORS
ES/TFM coordinates
with the Focal Point mission arrangements
TFM undertakes
mission
Basic Information
• Status of in-country EIF
process
• DTIS + Action Matrix
• Project Proposal
• Desk Review
• Statistical Fact-sheet
TFM submits Capacity
Assessment report to ES
EIF Board approves/ rejects
ES/ TFM recommendations
ES/TFM prepare Recommendation
Memorandum to EIF interim Board
ES on behalf of
EIF Board request s TFM to allocate funds
TFM implements
Board decision
TFM signs agreement with Principal Grant Recipient
TFM disburses funds after signature of agreement
TFM may undertake a Start up Facilitation
Mission to assist in the establishment of NIUs
TFM undertakes financial and
fiduciary supervision activities
TFM reports to EIF Board through the
ES
IfYes
IV
TFM MAIN RESULTS
TFM Legal ArrangementsUNOPS with Type of Agreement Description Current Status
1. Contributors (Donors)
ContributionAgreements and
Standard Provisions
Legal agreement done on behalf of the Board, (which does not have legal identity) the agreement maintains the integrity of the Trust Fund as a multi-lateral financing facility
Standard provisions approved Contribution Arrangements signed with 22 countries and the European Union
2. WTO Exchange of Letters Legal agreement with WTO as administrative host of the ES to enable the provision of technical services by the EIF Executive Secretariat
Exchange of letters on 25 November 2008. Funds transferred in January 2009 for 2009 Budget and in January 2010 for 2010.
3. UNCTAD Partnership Agreements with core
agency
Legal agreement with core Agencies for the implementation of the EIF Tier 1 and Tier 2 projects
Following the approval of the EIF Board and the UN Controller, the UNCTAD/ITC agreement was signed on 8 July 20094. ITC
5. UNIDO Partnership Agreement with new
UN Agency
Legal agreement with new UN Agency as implementing partner based on ITC/UNCTAD agreement
Following EIF Board approval, UNIDO and UNOPS signed the agreement on 24 June 2009
6. UNDP Partnership Agreements with core
agency
Legal agreement with core Agencies for the implementation of the EIF Tier 1 and Tier 2 projects
Proposed Partnership Agreement under consideration by the EIF Board
7. The World Bank
Externally Funded Outputs (EFOs)
Legal agreement following the World Bank’s EFO agreement scheme
Three EFOs approved by the Board (DRC, Togo and Afghanistan) and funds transferred
EIF Sub-Trust Fund Legal agreement establishing an EIF Sub-Trust Fund within the World Bank for EIF Tier 1 and Tier 2 projects
UNOPS and WB are working on this modality before submitting for Board approval
8. LDCs(Governments)
Memorandum of Understanding (MoU)/Grant
Agreements (for Pre-DTIS projects only)
Legal agreement with governments and parastatals for the implementation of Tier 1 and Tier 2 projects
MoU and Grant Agreements template finalized,in English and French and circulated to LDCs Following Board approval, 15 MoUs/Grant Agreements signed and 3 in progress
TFM Financial Outlook as of 31 March 2010
1. Contributions Description Amount (US$)
1.1. IF UNDP Holding Account Transfer of funds placed by UNDP under holding accounts plus interest 7,870,345.65
1.2. IF UNDP Commingled Fund Transfer of the first tranche of IF balance of commingled funds plus interests
23,501,360.30
1.3. Donors Contributions Contributions received and deposited into the UNOPS/EIF Trust Fund 61,509,589.28
1.4. Interest earned Interest earned until December 2009 1,103,243.93
Total Contributions
2. Allocated Funds2.1. LDC Funding NIU’s support plus DTIS update 11,619,399.00
11,819,399Pre-DTIS 200,000.00
2.2. Agency Funding DTIS for Togo, DRC and Afghanistan through EFO with the World Bank
1,200,000.00 1,200,000
2.3. Executive Secretariat (ES) plus EIF Board expenditure
Budget for year 1 - 2009 1,925,129.00
6,305,571.87
Budget for year 2 - 2010 3,484,410.00
ES International Consultants 367,370.00
Global Workshop and EIF Board 283,018.87
M&E and Database 245,644.00
2.4. Trust Fund Manager (TFM) Budget for Year 1 – 2008/2009 2,212,946.004,358,459
Budget for year 2 - 2010 2,145,513.00
2.5 Management Fee for financial transactions 750,000.00 1,068,589.90
Administrative Fee for implementing activities 318,589.90
Total Allocated Funds 25,716,218.81
3. Funding Available 68,268,320.35
Status of donor contributions and commitments (as of June 15th, 2010)
DONORS RECEIVED SIGNED COMMITMENTS Total
Balance IF 2008 2009 2010 2010 2011 2012 2013
Bal UNDP IF
23.5
-
-
-
-
-
-
-
23.5
Belgium
-
0.6
0.7
-
0.7
0.7
-
-
2.7
Canada
-
-
3.7
-
3.6
3.6
3.6
3.6
18.1
Denmark
-
6.0
-
-
5.4
1.8
1.8
1.8
16.9 European Union
-
4.1
-
-
1.1
-
-
-
5.2
Estonia
-
0.0
0.0
-
-
-
-
-
0.1
Finland
-
2.9
-
-
-
-
-
-
2.9
France
-
-
2.9
-
1.3
1.3
-
-
5.6
Germany
-
1.9
2.3
-
1.7
-
-
-
5.9
Hungary
-
0.4
-
-
-
-
-
-
0.4
Iceland
-
-
0.1
-
0.1
-
-
-
0.2
Ireland
-
3.2
-
-
-
-
-
-
3.2
Japan
-
0.2
0.5
-
-
-
-
-
0.6
Luxenbourg
-
2.1
-
2.8
-
-
-
-
4.9
Netherlands
-
-
-
-
-
-
-
-
-
Norway
-
4.1
5.5
-
-
-
-
-
9.5
Rep of Korea
-
1.0
-
-
-
-
-
-
1.0
Saudi Arabia
-
-
-
0.8
-
0.8
0.8
0.8
3.0
Spain
-
-
4.2
-
-
-
-
-
4.2
Sweden
-
-
6.9
-
3.5
3.5
-
-
13.8
Switzerland
-
-
0.2
-
-
-
-
-
0.2
Turkey
-
-
-
-
1.0
-
-
-
1.0
United States
-
-
-
-
0.2
-
-
-
0.2
United Kingd.
-
12.3
-
-
20.1
8.6
8.6
8.6
58.1 Interest Income
-
0.5
0.6
-
-
-
-
-
1.1
GRAND TOTAL
94.0
88.5
182.5
Approved TIER 1 Projects As of 31 March 2010
Approval Date Country Project Type
Main ImplementingEntity
Approved Budget (US$)
Disbursed as of 31 March 2010 (US$)
1 8 Oct 08 Togo DTIS The World Bank 400,000 200,0002 8 Oct 08 DRC DTIS The World Bank 400,000 200,000*3 8 Oct 08 Afghanistan DTIS The World Bank 400,000 200,0004 1 Jul 09 Yemen NIU+DTIS Update Ministry of Industry and Trade 1,031,000 212,6505 1 Jul 09 Sierra Leone NIU+DTIS Update Ministry of Trade and Industry 908,859 299,9736 23 Sep 09 Malawi NIU+DTIS Update Ministry of Industry and Trade 999,250 199,8007 23 Sep 09 Rwanda NIU+DTIS Update Ministry of Trade and Industry 934,400 176,4008 28 Sep 09 Uganda NIU+DTIS Update Ministry of Fin. Plan. & Ec. Dev. 1,000,000 200,0009 29 Sep 09 Cambodia NIU+DTIS Update Ministry of Commerce 909,900 Under process*
10 22 Oct 09 Liberia NIU+DTIS Update Ministry of Commerce and Indust. 999,900 149,950*11 15 Dec 09 Gambia NIU+DTIS Update Ministry of Trade, Indust. & Empl. 1,000,000 150,00012 15 Jan 10 Bhutan Pre-DTIS Ministry of Economic Affairs 50,000 40,00013 15 Jan 10 DRC Pre-DTIS Ministry of National Ec. & Comm. 50,000 Under process*14 15 Jan 10 Timor Leste Pre-DTIS Ministry of Economic Develop. and
Ministry of Tourism, Comm. Indus.50,000 Under process
15 15 Jan 10 Togo Pre-DTIS Ministry of Comm.&Priv.Sec.Prom 50,000 Under process16 26 Jan 10 Lao PDR NIU+DTIS Update Ministry of Industry and Comm. 899,999 Under process*17 26 Jan 10 Lesotho NIU+DTIS Update Ministry of Trade and Industry, Coop
and Marketing974,000 Under process
18 8 Feb 10 Zambia NIU Ministry of Comm. Ind. & Tourism 899,400 Under process19 12 Feb 10 Burundi NIU+DTIS Update Ministry of Comm. Ind. & Tourism 1,000,000 Under process*20 15 Mar 10 Nepal NIU Ministry of Comm. and Supplies 905,200 Under Process*
TOTAL 13,861,908
Tier 1 Projects in the pipeline
TFMRegion
Country Type of Project Planned Main ImplementingEntity
Estimated approval
date
Estimate Budget(US$)
Bang
kok
Afghanistan Pre-DTIS Ministry of Commerce & Industry Q3 2010 50,000
Bangladesh Pre-DTIS Ministry of Commerce Q3 2 010 50,000Solomon Island NIU Ministry of Foreign Affairs and External
TradeQ3 2010 565,250
Maldives NIU+DTIS Update Ministry of Economic Development Q4 2010 1,194,600
Daka
r
Benin NIU + DTIS update Ministère du Commerce Q4 2010 1,255,913Democratic Republic of Congo
NIU Ministère du Commerce, Petites et Moyennes Entreprise
Q3 2010 1,500,000
Mali NIU + DTIS update Ministère de l’Economie, du commerce et de l’Industrie
Q3 2010 1,000,453
Chad NIU Ministère du Commerce et de l’Industrie Q4 2010 1,000,000Guinea Bissau NIU + DTIS update Ministère du commerce Q32 2010 1,050,000
Nai
robi
Comoros NIU + DTIS update UNDP Q3 2010 1,100,000Djibouti NIU + DTIS update Ministère du commerce et de l’industrie Q3 2010 1,486,900
Ethiopia NIU + DTIS update The Ministry of Trade and Industry Q3 2010 838,602
Sudan NIU Ministry of Foreign Trade Q4 2010 1,000,000
Gene
va
Mozambique NIU Ministry of Industry and Trade Q4 2010 1,375,936
Burkina Faso NIU Ministère du Commerce, de la promotion de l’Entreprise et de l’Artisanat
Q3 2010 900,000
TTOTAL 14,367,654
THANK YOU!