Future funding of IDEP

y

UNITED NATIONS

ECONOMIC AND SOCIAL COUNCIL

Distr.

GENERAL

E/ECA/CM.11/53 27 March 1985 Original: ENGLISH

ECONOMIC COMMISSION FOR AFRICA

Sixth meeting of the Technical Preparatory Committee of the Whole

Arusha, United Republic of Tanzania, 15-22 April 1985

Item IV,1 of the provisional agenda*

ECONOMIC COMMISSION FOR AFRICA

Twentieth session of the Commission/

Eleventh meeting of the Conference of Ministers

Arusha, United Republic of Tanzania, 25-29 April 1985

Item V.I.A of the provisional agenda*

FUTURE FUNDING OF IDEP

*E/ECA/TPCW,6/l/Rev.2 E/ECA/CM.11/1/Rev.2

H85-737

e/bCa/OM.11/53

FUTURE FUNDI3SG OF IDEP

1. One of the most binding constraints- on the implementation of IDEP's goals has "been the inadequacy of financial resources. This is not only in terms of the amount of financial resource inflows, but also its overtime instabilityo Financial resources fluctuate widely from one year to the other, and within each year there is no guarantee of the timing of their actual receipt. Under such circumstances, planning of the Institute's activities in a steady and sustainable fashion becomes a hazardous task to the detriment of its serviceso

2O The Institute receives contributions from independent African menber States of EGA. These contributions, as assessed by the EGA Conference of Ministers in the early 1970s, amounted to a total of $US 1 million per annum. What the Institute actually received each year has been on the average less than half this amount.

African countries accumulated arrears, therefore, amounting to $4.7 million at the

end of 1984,

3* However, the above-mentioned governments' contributions covered only the then independent African countries (at that time 37 countries), Their relative shares were determined on the basis of their GNP in 1975 and in accordance with a formula agreed upon by the EC A Conference of Ministers, With the turn of the 1980s, this situation was felt to retire a reassessment., Additional African countries gained independence and substantial changes in GNP, both in absolute as well as in relative

terms, took place.

4- Accordingly, the ECA Conference of Ministers, in its meeting of April 1982, passed a resolution approving the application "of the indexation formulae agreed upon by.States members of the Commission to the 198O GNP Of all independent African countries in 1980", This led to an increase of total governments* contributions to a level of $1.6 million per annum from its previous level of &lo0 million. This measure, however, has not been implemented so far and thus has not led to any increase in governments1 contributions.

5. The other most important source of finance for the Institute is UttDP contribution, It is. this source which has sustained the Institute since its inception. However, in the light of the world recession and its consequential UHDF financial crisis, this- source has been steadily declining in recent years, reaching a level of $0.75

million for 1984 and 1985.

6, To cope with its financial constraint, the'Institute has been forced to retrench

at a time when its expansion and consolidation has heen most needed* A campaign to mobilize financial resources through bilateral and multilateral technical assistance has also been launched to make up for the declining regular budgetary resources.

However, such efforts to close the budgetary gap are by their very nature remedial

e/eca/cm.ii/53

Page 2

and supplementary. They are no substitute for the major regular "budgetary financial sources, i.e., African Governments and UHDP contributions,

7. To stabilize the Institute and allow it to carry out its mandate at the

required level and quality and to respond to Africa1s rising demands and needs for its services, the financial situation must be rectified and stabilized on a sustained basis„ This requires the following measures:

(a) Extension of the UNDP financial contribution to the Institute for

the coming cycle as a transitory period during which the Institute would have established alternative sources;

(b) Regular payments by African Governments of their assessed contributions

in accordance with the 1982 BCA Conference of Ministers resolution;

(c) Soliciting of finance for seven posts of the Instituted core staff

through permanent United Nations budget;

(d) Launching an even more intensive effort to mobilize additional financial

resources from technical assistance and voluntary contributionsa

Each of the above measures need further elaboration,

8. As mentioned earlier, UNDP contribution has so far constituted the backbone

of the Institute's finance since its inception 20 years ago. UNDP has been protesting the tying of its resources for one single project for such a long time and has

indicated its intention to terminate its contribution by the end of 1985, ioeo, even before the end of the present cycle which is 1986O

9O This creates a very serious situation. At present the UNDP contribution

constitutes two-thirds of the Institute's total regular budgetary resources. Given the economic crisis inflicting the great majority of African countries, it would be unrealistic to assume that the gap created by ending UNDP contribution could be made up for through an immediate increase of payments of governments1 contributions.

Moreover, the UNDP contribution serves as a catalyst for mobilizing extrabudgetary financial resources. It also endows the Institute with its international United

Nations charactero

10. Accordingly one can sax^ely conclude that terminating the UNDP contribution to IDEP's budget would create directly and indirectly a crisis of the highest order whose consequences could not be foreseen. This would be very unfortunate and ill- advised, particularly so, given the economic crisis in Africa and its more than ever

E/ECA/CMai/53

Page 3

need for an even more strengthened and expanded IDSP. Moreover, it is only now that the restructuring process of the Institute has been completed, allowing it to assume a more enhanced role in African development and its requisite research, consultancy and training,, UltoP has invested heavily in IDEP and should therefore be very keen to make its withdrawal an orderly one in order not to undo what urJDP has been trying

to achieve, namely to build up a strong IDEP.

11. In addition to the above, the Institute is in a much better position now to render direct services to IMDP itself as well as to other United Nations.specialized agencies and organizations in its areas of competence. Most important is- that it can serve the United Nations Secretary-General in his present intensified efforts to provide assistance and better manage the present economic crisis in Africa, Its services could also benefit other international efforts in this regard,

12. The Institute can also serve as an executing agency for UNDP and other United Nations agency projects. But it must be pointed out that such potential source of income is no substitute for UNDP; contribution to IDEP's budget. In. order for the Institute to provide services and implement projects it must have the minimum necessary capacities and overheads. It is this latter which is at present financed from UNDP budgetary contributions. For the time being, governments* contributions could not cover such expenses, Therefore, the. UNDP contribution is still indispensable for the

Institute's survival and growth,

13. UNDP finance must therefore continue for the corning cycle. In the meantime

certain definite and precisely timed steps would be taken to allow for a gradual phasing out of UNDP involvement in direct budgetary finance. Such steps are outlined below, 14. The first step in this regard is to assure a steady and sustained increase in governments' actual contributions aiming at reaching.the levels assessed by the EGA Conference of Ministers resolution-of 1982. Payments "of past arrears would also

constitute a major component in this regard,,

15. Kxe second step is to take immediate action aimed at acquiring a certain number of posts for IDEP in the regular United Nations budget, A similar arrangement has

been made for ILPES (iDEP's Latin American counterpart). ILPES has been" allotted

recently, for'ECA1s MULPOCs,

16. Accordingly, a request for such posts must be made to the United Nations General

Assembly urgently. It would be for a minimum of seven posts; Director, Deputy Director, Chief of Administration, and four teaching staff. These posts constitute

e/eGa/cM-11/53

Page 4

the core professional staff of the Institute, If approved, this would be equivalent to a total income of circa $400,000* In due time, this additional income, along with enhanced governments' contributions, could move a long way towards covering the

necessary finances for the Institute's basic overheads and activities,,

17- Thirdly, the final step to rehabilitate the Institute's medium-term finances requires an intensive effort to mobilise greater resources from aid-donors, bilateral as well as multilateral. This is different from the current resources acquired

through technical assistance agreements. This latter does not provide any liquid funds to the institute. It provides inputs in the form of fellowships, financing of seminars, secondment of staff, etc., which are financed directly by donors. While this is important and efforts must continue to solicit even more resources in this form, it does not satisfy the need for financing the Institute's basic overheads, This latter requires liquid financial resources,

18. Action aiming at organising a consortium from among aid donors to provide

(UNESCO's Educational Planning Institute). Initial explorations indicate that

similar arrangements could be made for IDEP.

19-. In fact, since 1981 the Institute, in its financial policies, has strived at creating an annual budgetary surplus from its regular budgetary sources, inadequate as they have been. The objective was to create a seed for a stabilization fund

which could be topped up from extrabudgetary sources. An aggregate surplus exceeding

$0*5 million was realized in I98I and 1982O However, the financial requirements for restructuring of the Institute's activities and staff ate up this surplus in sub

sequent yearsa

Medium-term financial growth

20o In the light of the above, a medium-term growth scenario of IDEP?s financial

needs and sources could be outlined as follows;

(a) Financial needs

(i) with regard to financial needs, the present minimum requirement to

cover basic overheads including core teaching and support staff is

$1O5 million. This does not cover financing of such activities as basic research, seminars, advisory services, etc. It only covers basic

training and minimum required support activities and overheads;

Page 5

(ii) this initial sum of $1.5 million will have to increase in the

future in line with both growth in the Institute's minimum basic activities, their capacity and overhead requirements and inflation to a level of $2.0 million towards the end of the 1980s. This figure covers only the activities to be financed from regular budgetary

sourceso

(b) Financial sources

(i) the first financial source to be mobilized to finance the above projected

needs is governments' contributions. This is to increase gradually from its past average level of $0.4 million to a minimum of $1.2 million per annum, i.e., 75 per cent of assessed governments' contributions.

Such a level could be reached by the end of the 1980s or even earlier if the level of actually paid governments' contributions is increased

each year by between 30 and 50 per cent;

(n) an additional source would be in the form of acquiring seven posts for

IDEP in the regular United Nations budget. This would provide an

additional sum of $0,4 million to financing the Institute's activities;

(iii) as for the UMDP contribution, it would continue for the following

cycle but at declining rates, but would be phased out by the end of this decadeo By that time an attained minimum level of governments' contributions of $le2 million plus $0.4 million from regular United

Nations budget (adding up to a total of $136 million) would go a long

basis;

(iv) additional financial needs amounting to circa $0o5 million would be

covered from extrabudgetary sources, in fact the Institute's overall expenditure in excess of its basic requirements of $2B0 million would

grow in line with this source,

21. To sum up, the above projected scenario rests then on three cornerstones:

(a) a gradual increase of governments' contribution to $1.2 million per annuam;

(b) ascertaining posts for core staff in United Nations regular budget; (c) gradual

phasing out of UNDP budgetary contributions by end of decade in line with increase

in governments' contributions„

Table 1. Present Pattern of Growth of IDFP's Activities

Some Indicators "1

1979-1980 1984-1985

A. TRAINI13G

Teaching staff (man/year) Programmes

9-months basic overall development planning programme

3-months sectoral programmes:

Agricultural and rural development and planning

Energy development and planning Human resources development and manpower planning

Industrial Development and Planning

Trainees (number)

Fellowships financed by IDEP ($US) B. CONFERENCES, SEMINARS, WORKSHOPS, etc.

(number)

C. BASIC RESEARCH ADVISORY SERVICES (man/year equivalent)

D. OTHER SUPPORTING SERVICES Interpretation (man/year) Translation (man/year) Computer facilities Publishing facilities

E. CAPITAL FORMATION

{% of investment in total expenditure) F. CAPACITY UTILIZATION & COST '■■

Average cost per trainee (in $US)

Implemented

none none

none

implemented

56 100,000.00

implemented &

expanded a/

starts Nov. 1985 implemented

implemented

implemented

no^

0.0

none

none

3 2 none '■■

none

3 2 installed

to be installed in 1985

0.01

26,OOO.OO

1O

less than 10,000.00

a/ This programme has been substantially expanded both vertically and

horizontally. New courses have been added particularly in the areas of macro-policies (monetary, fiscal and other related policies) and regional planning.

b/ Include a projected minimum of 15 trainees expected to participate in the

programme of numan resources development which is to be offered in April 1985.

Table 2' Actual Fi"ancial Receipts and Payments

RECEIPTS Governments' contributions 428,849.86 605,889.12 413,502.60 419,351.51 357,178.99 2,224,772.08

UNDP contributions 800,000.00 800,000.00 1,248,505.84 790,675.97 750,000.00 4,389,181.81

Total 1,228,849.86 1,405,889.12 1,662.008.44 1,210,027.48 1,107,178.99

Payments 1,508,964.06 1,177,466.37 1,248,505.84 1,388,144.00 1,202,944.00

Balance 1■- (280,114.20) 228,422.75 413,502.60 (178,116.52) (95,765.01) 6,613,953.896,526,024.2787,929.62

Table3.AssessedandActualContributionsbyAfricanStates Countries Annualassessedcontributionsestablishedbyresolution287(XII) Assessedtotalcontributions1976-1984 Actualpayment1976-1984 Totalaccumulated

arrears1976-1984

1.2.3.4.5.6.7.3.9.10.11.12.13.14.15.16.17.18.19.20.21.22.23.24. AlgeriaBeninBurkinaFasoBurundiCameroonCentralAfricanRepublicEgyptChadCongoEthiopiaGabonTheGambiaGhanaGuineaIvoryCoast

KenyaLiberiaLibyanArabJamahiriyaMadagascarMalawiMaliMauritania

MauritiusMorocco 80,000.0015,000.0015,000.0015,000.OO24,000.0015,000.0030,000.0015,000.0015,000.0032,000.0020,000.0010,000.0032,OOO.OO20,000.0032,000.0032,000.0015,000.0080,000.0020,000.0015,000.0015,000.0010,000.0015,000.0032,000.00 720,000.00135,000.00135,000.00135,000.00216,000.00135,000.00720,000.00135,000.00135,000.00288,000.00180,000.0090,000.00288,000.00180,000.00288,000.00298,000.00135,000.00720,000.00180,000.00135,000.00135,000.0090,000.00135,000.00288,000.00 403,827.18127,314.5835,441.3029,925.00168,000.457,710.15594,565.48121,602.3546,391.1429,723.33148,095.2490,731.4132,000.0078,409.7745fOOO.OO241,774.85119,725.29

82,158.4533,890.2854,990.27224,000.00 316,172^827,685.4299,558.70105,075.0047,999.55127,289.85125,434.52135,000.00135,000.00166,397.65133,608.8660,276.67139,904.7689,268.59256,000.00209,590,2390,000.00478,225.1560,274.71135,000.0052,841.5556,109.7280,009.7364,000.00

Countries innualassessedcontributionsestablishedby.resolution237(XII) f^sesscitotalcontriiji.r-.ions1976-1934 25.26.27.28.29.30.31.32.33.34.35.36.37. NigerNigeriaRwandaSenegalSierraLeoneSomaliaSudanTogoTunisiaUgandaUnitedRepublicofTanzaniaZaireZambia 15,000.0080,000.0015,000.0024,000.002o;ooo.oo10,000.0032,000.0015,000.0024,000.0024,000.0024,000.0032,000.0032,OOO.OO 135,000.00720,000.00135,000.00216>000.00180,000.0090,000.00288,000.00135,000.00216,OCX).00216,000.00216,000.00288,000.00288,000.00 £.ctu-'1payment1976-1984

60,455.60433,116.8830,000.00169,625.4028,394.3220,000.0032,000.0093,217.51192,000.0075,-369.3396,000.00225,824.9150,761.42 Totalaccumulated

arrears1976-1984

74,544.40236,883.12105,000.0046,374.60151,605.6870,000.00256,000=0041,782.4924POOO.OO140,130.17120,000.0062,175.09237,238.58

Total1,001,000.009,009,000.004,-272,542.39736,457.61

Table 4. Annual Assessed Governments' Contributions According to the 1982 Resolution 433(XII) Formula ~ "

90,000.00 .32,000.00 24,00.0.00 24,000.00 24,000.00, 20,000.00 40,000.00 10,000.00 20 000 00 2.

■a,.

5.

6.

7.

8.

9.

11.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

31.

32.

33.

34.

•;■ Algeria Angola Benin Botswana Burkina Faso Burundi Cameroon Cape Verde

Central African Republic Comoros

Djibouti Egypt Ethiopia

Equatorial Guinea Gabon

The Gambia Ghana Guinea

Guinea-Bissau Ivory Coast Kenya

Liberia

Libyan Arab Jamahiriya Madagascar

Malawi

Mauritania Mauritius Morocco Mozambique Niaer

10,000.00 32,000.00 15,000.00 90,000.00 32,000.00 10,000.00 32,ooo.oo 15,000.00 40,000.00 32,000.00 10,000.00 40,000.00 40,000.00 15,000.00 32,000.00 90,000.00 32,ooo.oo 32,000.00 20,000.00 24,000.00 40,000.00 32,000.00 32,000.00 90,000.00

^ f 24,000.00

37. Sao-Tome and Principe lo,O0O.oo

f- fnef', 32,ooo.oo

39. Seychelles 10,000.00

40. Sierra Leone 24,000.00

41 • S°malla 24,000.00

42. Sudan

A-> - ., 3 . ' . 40,OCX).00

S: Clland

46. Tanzania, United Republic of 40 000 OO

47. Uganda 4o'oon*no

49. Zambia 32,OOO.OO

in ?4«k ^ c 32,000.00

50. Zinibabwe .,40.000,00

v 1,601,000.00