European Commission - The Cotonou Agreement
Can the principles of Accra and Paris lead to a more efficient programming of EU-ACP development aid?
- A reinforced legal framework for the implementation of Aid effectiveness principles
- Programming support to the ACP States with the new Cotonou provisions on aid effectiveness
The second revision of the Cotonou Partnership Agreement comes at a crucial period in the fight against poverty. 2015 is the target to deliver on the EU's commitments in development cooperation. While regional integration was a priority target of the second revision, including EPA related issues, poverty eradication remains the primary objective, with the revised agreement to be instrumental in assisting the ACP States in delivering on the Millennium Development Goals. To this aim, delivering rapidly on aid effectiveness will be critical to accelerate progress towards the MDGs.
The revised agreement integrates the principles of Aid effectiveness to a large extent. First to reduce transactions costs and bring more value for money in development cooperation, eligibility to EDF funds is extended to OECD/DAC members and LDCs as well as to all thirds countries on the basis of reciprocity and proportionality. Second, in line with the extended aid effectiveness agenda, cooperation with non-ACP developing countries is encouraged. Third, to promote ownership of development strategies, participatory approaches are strengthened through the consultation of ACP Parliaments, together with non-State actors.
But the impact and potential gains of the aid effectiveness principles are probably most important as regards programming of development cooperation with ACP States. Ownership, alignment, donor coordination and harmonisation may have important implications in the programming of support to the ACP States, provided the appropriate initiatives and measures are taken. To a certain extent, the revision of the Cotonou Agreement brings current practices in legal text but clearly gives a reinforced status to the commitments of the Accra Agenda for Action and Paris declaration and a clear obligation to put aid effectiveness in practice in EU-ACP cooperation. It is for the Commission and the Member States to be bold and innovative and to demonstrate the added-value of the European dimension.
The revision of the Cotonou Agreement is also to be read in conjunction with relevant provisions of the treaty on the Functioning of the European Union, in particular concerning donor coordination. The revised Agreement creates additional commitments of the EU and Member States to put in practice the aid effectiveness principles on which programming shall be based, while the TFEU positions the Commission as responsible for initiating the processes leading to donor harmonisation. There are consequently concrete actions to be defined at programming level to put in practice the principles of aid effectiveness.
The revised Cotonou Agreement, incorporating aid effectiveness principles, complements a framework of obligations stemming from the TFEU on the EU and the Member States and reinforces EU commitments to put aid effectiveness in practice.
From a general point of view, in accordance with Art.208.2 TFEU, the EU and the Member States are committed to implement the Accra Agenda for Action and the Paris declaration:
"The Union and the Member States shall comply with the commitments and take account of the objectives they have approved in the context of the United Nations or other competent international organisations".
In particular, as regards donor coordination and harmonisation, Art. 210 TFEU of Chapter 1 of Title III provides a strong basis for the implementation of aid effectiveness principles:
"1. In order to promote the complementarity and efficiency of their action, the Union and the Member States shall coordinate their policies on development cooperation and shall consult each other on their aid programmes, including in international organisations and during international conferences. They may undertake joint action. Member States shall contribute if necessary to the implementation of Union aid programmes. The EU and its Member States are therefore committed to donor coordination by Art.210 TFEU. The revised Cotonou agreement goes further than the TFEU and aims at donor harmonisation, with a leading role for the ACP partner country (Art.2 CA).
In practice, it is for the Commission, at EU level to propose initiatives to implement donor coordination: "The Commission may take any useful initiative to promote the coordination referred to in paragraph 1." Art 210.2 TFEU consequently gives to the Commission the responsibility to develop appropriate proposals to harmonise development aid from the EU and the Member States, in particular to the ACP States.
The revised Cotonou Agreement sets the principles of aid effectiveness at the heart of the programming exercise. Ownership, alignment, harmonisation, results oriented management and mutual accountability are now guiding ACP-EC development cooperation. The principles of aid effectiveness become fundamental principles (Art.2) of the Cotonou Agreement.
Ownership as a fundamental principle of the Cotonou Agreement, gives a key role to the ACP countries in the alignment and harmonisation of donor support on the development strategies (Art.2). It implies the participation of ACP Parliaments and civil society in defining the development strategies (annex IV, Art.2). It remains a challenge to make this principle work in concrete terms:
> Analysis and formulation capacities of ACP governments to formulate development policies should be supported to enable the definition of development policies, as well as to lead the alignment and harmonisation processes, as a practical implementation of donors' commitment to help strengthen their capacity to exercise leadership;
> Participation of national Parliaments requires good governance ensuring checks and balances between the government, which will lead the definition of the national development policies, and the Parliament, which, will bring concrete concerns of ACP populations into the development strategy; There are also new practices to be put in place to strengthen parliamentary oversight of budget support and public finance management;
> Capacity-building, for ACP Parliaments and civil society, on the basis of Art.33.1 and Art.7, to analyse and contribute to the formulation of development strategies is also a key element to putting in practice the ownership principle; As regards civil society and the issue of representativeness, it is important to draw the lessons from the mid-term review to ensure that the next round delivers better results;
In line with the principle of Alignment, also a fundamental principle of ACP-EU development cooperation, EU and the Member States shall align their support and development programmes on the national development strategies (Art.2, Art.61). Alignment also applies to implementing procedures and implies the use of country specific arrangements and procedures, not just in case of budgetary support but also procurement procedures for programmes and projects.
> Alignement is integrated in the revised Cotonou Agreement as guiding the ACP-EU cooperation. It is a common objective of the Parties to the Partnership and a fundamental principle of Art.2. CA.
> In line with the AAA/Paris declaration and the commitment to respect partner country leadership, strategy papers, jointly prepared by the EU and the ACP State/Region, shall be based on the national development strategies/ Poverty Reduction Strategy Papers, including the selection of focal sector(s).
> Art.61.2 CA should be interpreted in the light of the AAA and Paris declaration, so that conditions of budget support and indicators of performance of disbursement should be drawn from the national development strategies.
The revised Cotonou Agreement also emphasises the principle of Donor Harmonisation in Art.2 providing that "the Parties shall work closely together in determining and implementing the necessary processes of donor alignment and harmonisation". The EU and its Member States are already committed to donor coordination by Art.210 TFEU. But the revised Cotonou agreement goes further and target donor harmonisation with a leading role for the partner country. It also implies, in Annex IV, an extensive coordination between the EU and the Member States to prepare the strategy paper and indicative programme. Donor coordination and harmonisation is certainly the most important and difficult area of the aid effectiveness agenda to implement. It calls for new rules in the definition of strategies and the management of resources.
> Donor harmonisation is integrated in the revised Cotonou Agreement as guiding the ACP-EU cooperation. It is a common objective of the Parties to the Partnership and a fundamental principle of Art.2. CA.
> Capacity building is needed to support ACP led DoL, otherwise DoL has to be initiated by Commission; Leadership of ACP States comes with accountability vis-à-vis the donors who should e able to withdraw from the financing of programmes in case of duplication;
> The strategy paper (SP) and indicative programme (IP) are the major donor harmonisation tool: The SP should constitute a joint programming tool for each country/region distributing, according to comparative advantages the sectors between the EU and the Member States; The IP should be a joint implementation framework using delegated cooperation if necessary;
Result Oriented Management requires the donors to link country programming and resources to results and align them with effective partner country performance assessment frameworks. Donors should refrain from requesting the introduction of performance indicators that are not consistent with the partners' national development stragtegies. It also calls the donors to harmonise their monitoring and reporting requirements.
> Result oriented management integrates the revised Cotonou Agreement as guiding the ACP-EU cooperation. It is a joint commitment of the Parties in the fundamental principle of Art.2. CA.
> The revised Cotonou Agreement integrates the principle of result oriented management in article 4(3)c) of Annex IV. In accordance to Annex IV, the Strategy Papers and Indicative programme shall contain results oriented criteria for the reviews. It should be ensured that these criteria are consistent with the partners' national development strategies.
> The allocation of resources is consistently based on needs and performance. Performance is assessed on the basis of progress in a number of areas such as governance, implementation of institutional reforms, use of resources, achieving the MDGs, as well as sustainable development.
> According to the Accra Agenda for Action and Paris Declaration, the management of resources should be geared to achieving the objectives of the development strategies. However, while EU-ACP cooperation is guided by the aid effectiveness principles, on which aid programming is based, the primary objective of the EU-ACP partnership agreement is the eradication of poverty. Considering that the MDGs are the standard indicators of progress in the fight against poverty, progress towards achieving the MDGs should be placed on a prominent position in the results oriented management of aid.
Mutual Accountability commands a joint assessment of partner countries and donors of progress in implementing the aid effectiveness principles. But mutual accountability is first and foremost a commitment to ensure transparency in the use of development resources. It is also a commitment of the partner country engage in and strengthen participatory approaches, including building capacities for the Parliaments and involving a broad range of stakeholders in defining and implementing national development strategies.
> Mutual Accountability is integrated in the revised Cotonou Agreement as guiding the ACP-EU cooperation. It is central to the Partnership and set as a fundamental principle of Art.2. CA.
> The principle is also notably translated in the revised Cotonou Agreement in terms of performance in the field of governance. In this regard, performance in terms of governance and implementation of reforms is already an allocation criteria (art.3 Annex IV) and the governance incentive tranche (10th EDF) is certainly a very useful tool to engage ACP States in democratic reforms.
> As regards transparency in the use of development resources, the revised Art. 61(2) CA provides for the strengthening of domestic accountability and parliamentary oversight of public finance management.
> The revised Art.33(3)c) CA also integrates indirectly this principle. Considering the fungibility of funds, transparency in the use of development resources implies the support to ACP States in building capacities for domestic revenue management, including to build an efficient and sustainable tax systems as well as the participation in international tax cooperation structures and the implementation of best practices in tax matters.