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Supplementary Memorandum submitted by the Department for International Development
1 Background
In its Evidence Session of 21st March, Committee Members requested additional information from DFID as follows:
(a) timetable and process for appointing the Chief Executive for the Investment Climate Facility for Africa;
(b) information on the impact of DFID's private sector infrastructure programmes and
(c) details of DFID's work at the country level on property rights
2 Investment Climate Facility for Africa (ICF): Appointment of Chief Executive
The ICF Trustee meeting on 20th March focused on the agenda for securing investors and for arranging for investors to be appointed to the Board. Although not specifically on the meeting's tabled agenda, this meeting also discussed and agreed a process for recruitment and appointment of a Chief Executive Officer (CEO). A selection sub-committee of the Board was set up to oversee this appointment process.
As at 12th May, an executive search consultancy has been appointed to lead on this process. Specifications for the CEO have been agreed and the search process has commenced. An initial "long-list" of names has been provided by the recruitment consultants, which has now been reduced to a shorter long-list for discussion by the selection sub-committee, with the aim of reaching a final short-list by the next Board Meeting on 1st June. Candidates will be interviewed and selection made during June, with a target of having an appointment in place within 3 months of selection. This is a very tight schedule.
The ICF Board considers this appointment as very important for the future of the ICF. However, all recognise that it is not an easy task to find the right, high-profile, preferably bi-lingual, individual with both public and private sector experience, who is well networked in Africa and is passionate and knowledgeable on investment climate issues. The Board is also aware that until a suitable CEO is recruited and in post, much of the role expected of the CEO will have to be jointly shouldered by the Trustees and the Executive Secretariat. Currently, HE Benjamin Mkapa and Dr Ken Kwaku (consultant to the ICF secretariat) are handling the key networking and promotional roles with African leaders and African institutions.
3 Impact of DFID's Private Sector Infrastructure (PSI) Programme
The objective of this programme is to secure increased private sector participation in infrastructure in developing countries for economic growth and poverty alleviation. Three main problems are being addressed by this PSI programme: the poor enabling environment including the limited capacities of the public and private sectors to deliver infrastructure services for the poor; the difficulties, risks and costs associated with infrastructure project development; and the shortage of suitable finance.
DFID plays a leading role in thirteen multi donor facilities that tackle these three problem areas. Annex 1 summarises in more detail aspects of the programme and its impact on development. As an example, the programme has levered in some US$1.5 billion private investment. This represented a donor/private sector leverage rate of 1:10 i.e. for every one dollar of donor money spent the private sector has invested ten dollars in infrastructure.
Annex 1 also refers to targets on investment in energy and water services, which will have an impact access at household level. Several of the private sector infrastructure facilities are still quite new and, when in full implementation, impact on poverty reduction will come through both direct programme efforts and through demonstration effects.
4 DFID country programmes on property rights
DFID maintains a variety of country, global and thematic programmes involved directly or indirectly in strengthening property rights, and also supports global initiatives that help property rights reform. In some countries (Rwanda, South Africa, Tanzania), DFID is a lead donor. In many others, DFID is working closely with other donors. Annex 2 provides details of DFID's work in the area of property rights in 16 countries, in addition to references to regional or thematic work.
DFID response reflects country context and demand: developing reform proposals direct with government (Kenya); working simultaneously at different levels (Access to Justice including on property rights, and on land records, in Pakistan); and maintaining a watching brief through donor co-ordination forums (Uganda).
DFID can respond strategically at critical stages of country land policy reforms, and will continue to do so. DFID has just approved a land reform assistance programme in the highly political environment around this issue in South Africa. In Mozambique, DFID recently approved support for helping people and civil society groups to establish their rights under Mozambique's progressive new land legislation.
DFID expertise comes internally from its different groups of advisers applying technical expertise and political and institutional understanding, and externally from working with partners including UN agencies, other donors, and international and local experts. In Ghana, with regard to Hernando de Soto's idea for a $ 2m pilot project on land titling in Accra, land policy experts in the land sector agencies, academic institutions, and NGOs do not agree that that this proposed intervention is appropriate, as the latter is an example where a potentially simplistic solution to complex land issues is unhelpful.
The challenge facing DFID and its partners is that 'property rights' and security of land tenure require both broad political consensus for reform, alongside many of the wider governance reforms needed to create effective states. The context varies so much, such as in Rwanda where DFID's lack of colonial baggage is perceived as an advantage, and in Ghana where DFID has brought in specific expertise from other African countries. Given existing institutional and capacity constraints in many of DFID partner countries, and the complexity of the political and technical factors involved, the current diversified approach to meeting country needs on property rights reform seems broadly correct. We will do more in contexts where partner Governments emphasise that this is an area where they welcome donor assistance, and where they are committed to support change.
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Annex 1:
DFID's Private Sector Infrastructure (PSI) Programme: a summary of performance to date, 31 March 2006
Objective
1. The objective of the programme is to secure increased private sector participation in infrastructure in developing countries for economic growth and poverty alleviation.
Programme design 2. DFID plays a leading role in thirteen multi donor facilities that deliver a PSI programme that is designed to address three main problems - the poor enabling environment including building the respective capacities of the public and private sectors to work in partnership to deliver infrastructure services for the poor; the difficulties, risks and costs associated with project development; and the shortage of suitable finance caused by weaknesses in capital and credit markets.
Aspects of performance
3. At the aggregate level, we currently measure the impact of the programme in terms of private investment generated and numbers of households getting access to infrastructure services for the first time. Individual programmes and projects have targets that feed into this aggregate measure as well as their own specific national performance targets. We recognise the need to develop lagging indicators to show the impact of improved infrastructure on national economic growth.
4. As we can see from Figure one, over the three year period 2003/2004 - 2005/2006, the programme levered in some US$1.5 billion private investment. This represented a donor/private sector leverage rate of 1:10 i.e. for every one dollar of donor money spent the private sector invested ten dollars in infrastructure. This was a significant achievement and one that we intend to maintain or improve on as the PSI programme is scaled up over the next three years. Figure one also reveals that the most popular infrastructure sectors were transport (US$399 million), construction (US$328 million) and telecommunications (US$308 million). These are likely to continue to be popular infrastructure sectors for private sector participation over the next three years although we plan to do more on water and power distribution - areas which have direct impact on poverty alleviation. The great majority (98% or US$1,433 million) of the private investment generated from the programme over the last three years has benefited Africa. We expect Africa to continue to be the main beneficiary although a new facility for Asia - AsPIFF, will ensure that Asia also receives a greater volume. 5. Figure two shows that the impressive figure for private sector investment has been generated from just 13 completed large-scale projects. DFID supported facilities are new and in some cases have only recently started to do business. With these facilities now beginning to hit their stride and a new facility to come on stream, we expect the number of completed large-scale projects to treble over the next three years to forty. We can add to this 33 smaller scale output based aid projects that target subsidies to increase access to infrastructure services for the poor.
6. Over the next three years, we expect to have water and energy projects coming on stream that will focus on increasing the distribution of services to the poor. These include those identified already under the Global Partnership for Output Based Aid programme - estimated numbers for which are shown in Figure three[1]. We also expect to 'mainstream' access targets into projects developed by other supported facilities. On this basis, we have set provisional, minimum targets for giving 500,000 households access to energy and water services for the first time. As most of the access will be given through demonstration projects that we expect to be replicated, we are confident that the number of households to eventually get access to services for the first time as a result of the programme will be much greater.
A snapshot of the
aspects of performance for each of the thirteen
facilities that make up the programme is provided in the table below.
Annex 2: DFID Property Rights Programmes & Projects: Notes on DFID regional and global programmes
AFRICA
Angola
The Angolan Parliament recently approved the Law on Regional and Urban Planning. DFID is co-funding the Luanda Urban Poverty Project (LUPP2), the purpose of which is to influence equitable, inclusive, pro-poor policies and best practices for Angola for poverty reduction in urban Luanda. The programme, through its implementing agent Development Workshop, has been involved with extensive advocacy on the land law with parliamentarians.
In terms of outcomes of the project, and the introduction of the Law, these include:
· Civil society is taking a more active role in advocacy alongside the Government of Angola · The Land Law was published in Angolan newspapers, a new step in transparency, and land issues are now properly on the agenda, which is essential for the continuation of peace, · There are real changes in the level of public consultation on planning issues.
Ghana
The National Land Policy (NLP) of 1999 stresses that land is to be considered a common resource, held in trust for the people of Ghana. The new government in 2001 inherited a flawed land policy revision process. The new minister of lands (who had been a land rights activist in opposition) sought DFID help in opening the debate. DFID brought in an expert consultant who had been involved in Ugandan and Tanzanian land policy reforms. This gave the minister the support he needed to break the deadlock. The NLP now aims to encourage the responsible use of land and to promote community participation in land management at all levels. DFID and partners are working to support the government's Land Administration Project (LAP). Recognising that access to land in 80 per cent of Ghana is controlled by a diverse range of customary tenure systems, this project aims to improve the effectiveness, transparency and accountability of Customary Land Secretariats (traditional authorities). This will benefit poor people by reducing the cost of registering land claims; cutting out excessive red tape and rent seeking; and making the land allocation process more transparent and land rights clearer and more secure.
DFID has substantial current engagement (financial commitment $9,000,000 and Rural Livelihoods Advisory input) in the LAP. DFID engaged in policy development 1973-1999 resulting in the 1999 National Land Policy. LAP Project Design 2000-2003. LAP implementation 2003-2008 (5 year pilot phase of a 15-20 year process). DFID agreed to harmonise support to LAP under World Bank lead.
LAP is being delivered by the Government of Ghana and is dependent on the capacity of government, traditional leadership and the private sector to deliver on this challenging reform programme. DFID expertise comes from advisers with consultancy support.
Problems associated with land / property rights are seen as the key constraint to poverty reduction, private sector development and growth in Ghana. Also a key source of conflict in Ghana (30-60 000 unresolved court cases over land/ Chieftaincy boundary disputes).
Ethiopia
DFID co-funded the Ethiopian Economics Association to survey small farmers' perceptions of the current land rights situation. This information was used to lobby effectively for greater public dialogue on the issue. Certification and formalisation of leasehold markets were suggested. In the draft poverty reduction strategy programme (PASDEP), the need for continued reforms to improve land tenure security is specifically mentioned.
Kenya
DFID is supporting the Ministry of Lands in the preparation of a national land policy, which would deal with a range of issues relating to property rights and security of tenure. DFID plan to support implementation of the policy, and in particular, support the development of local level land administration bodies.
DFID has offered support to the implementation of a Presidential Commission report on the irregular and illegal allocation of land (land grabbing) which would provide a formal and legal mechanism to redress the massive grabbing of land which occurred under the former regime.
DFID is engaged in work on the prevention of forced evictions, and are supporting the development of guidelines on prevention and management of evictions.
DFID is also supporting with the World Bank, a Financial and Legal Sector Technical Assistance Programme (FLSTAP), under which DFID support capacity building of various registries, including land registries. This is directly aimed at strengthening the investment climate.
Most of DFID technical expertise is drawn from others in the donor group (UN Habitat Chief of Land Tenure), international consultants and local consultants. DFID have also funded civil society - in the case of evictions, through COHRE, which has a strong international legal capacity in relation to housing and property rights.
DFID is implementing a 5 year Project Memorandum on the land sector - which will looks at changes in the political context and what DFID can do more. Major constraints are in the wider political context, with fall out from the referendum on the proposed new constitution, shifts in political coalitions, and entering a pre-election phase.
There are sensitivities around DFID engagement in a politically sensitive sector in which there have been colonial (and post) interests in land. This was one factor in DFID withdrawing from the provision of direct TA into Government. One strategy to counteract this has been to establish and work through a wider land sector development partner group, which is chaired by UN-Habitat. Whilst DFID play a key role in the group, this enables us to present views and dialogue with GoK as a donor group, rather than as DFID.
Malawi
In December 2004 DFID commissioned a review of involvement of other donors and the Governments position on land to guide future involvement. The work was very useful. It highlighted the different donor positions/investments e.g. formal titling of customary land versus strengthening land markets for informal trade and leasing. The Government's own position was around formal titling.
DFID Malawi has a Safety, Security & Accessible Justice programme (MASSAJ). This focuses primarily on criminal justice but recognises the importance of commercial justice - particularly property rights and contract enforcement. IFC estimates it costs 136% of a debt to recover a debt in Malawi so there are strong disincentives to investment. Commercial justice is flagged in the Malawi Economic Growth and Development Strategy (like PRSP2).
Mozambique
The DFID country office discussed property rights with the IDC in their recent visit to Mozambique and briefed them on the current Community Land Use Fund which DFID lead on behalf of five other donors. The summary of the project from DFID Country Programme Summary reads:
"This is a Community Land Registration, Negotiations and Planning Support Programme in the form of a Challenge Fund open to communities and civil society organisations. The programme's budget is estimated in about £ 4.1 m and is joint-funded with five other donors. It seeks to improve the enabling environment and capacity of government, private sector, and NGOs to provide appropriate services in assisting rural communities to register their land rights and negotiating economic benefits from land concessions. In parallel it aims to integrate land rights allocation with local development planning processes as well as linking national policy with practical pilots at provincial and district level. The fund will be piloted in the provinces of Gaza, Manica and Cabo Delgado for five years with a mid term review at the end of the second year. The project will be managed by a consortium comprising KPMG, NRI and CEPKA, hired through an international tender which will be supervised by a National Oversight Committee, led by DFID, comprising representatives from the Government of Mozambique, the Private Sector and Civil Society. DFID's Contribution £2,000,000; Duration: April 2006 to March 2011.
There is demand for work on property rights which DFID are responding to through the Community Land Use Fund. Expertise is mainly external to DFID. DFID are however building DFID internal expertise through structured training courses. The resources DFID use for intervention in this area is a combination of international and local external experts, and this works well. In general Mozambique faces the same issues as most other countries in Southern Africa in particular, but the problem is being tackled somehow more cautiously. DFID will use the Community Land Use Fund to gauge progress in the subject and may scale up this project in future if demand increases.
Nigeria
DFID Nigeria, through the British Council managed Security, Justice and Growth (SJG) Programme, is working on two aspects of property rights.
1) Land registration - working to improve the structures at state level to improve (streamline) the process of land registration at the sub-national (State) level. In line with the Land Use Act of 1987, it is the responsibility of State Governments. to manage this process. Interestingly, Nigeria ranks 152 out of 155 in the World Bank cost of Doing Business Report on the ease of land registration/ transfer. The work at State level is therefore more about improving process and structures at the state level to reduce the cost and time of the procedure. At the federal level, the programme is working with the Federal Ministry of Lands to define principles of best practice (based on early results from state level working) and put in place a system to offer a more sustainable capacity building programme to States who would like to work towards a best practice system.
2) alternative dispute resolution through multi-door courts which are attempting to reduce the time it takes for land disputes to be settled through the courts.
Linked to these activities are components looking at security (community policing) and more general justice related work on the courts system and training of judges etc, which will also support more effective property rights. Other work on (financial sector) credit rights and insolvency laws and mortgage legislation are just starting up. Much depends on how broad the definition of property rights is being interpreted. The substantial work DFID Nigeria is doing on corruption and EITI could also, under the broadest definition, be bundled under property rights.
The greatest challenge to doing more work on this is that in a federal country with 36 States, and over 250 ethnic groups, land is a very divisive issue and needs to be treated with caution - not just by DFID (ex colonial power) but also by State or Federal Governments. In addition there is the complexity of the "official" procedures vs customary ones (especially an issue with pastoralists in the north). Also as mentioned earlier, the fact that the Land Use Act is enshrined in the constitution, means that the support being provided is more about improving a bad system, rather than changing it completely.
Rwanda
DFID Rwanda's involvement in property rights is in the area of Land Reform, through support to Phase 1 of the Land Reform Process in Rwanda (2 years from November 2005).
DFID is the lead donor in land reform in Rwanda. DFID provided a Land Policy Specialist within the ministry responsible for lands, from 2002 to 2004, assisting with policy and legislative development. USAID have also been providing assistance in legal drafting. DFID consultant Land Policy Specialist had a background of experience in South Africa. DFID's contracted support includes a three person full time team from Rwanda, Kenya and UK (the latter with experience on the earlier DFID land Reform programme in Guyana). They also have access to a wide pool of international, national and regional expertise.
We also recognise the need for an enabling environment for enterprise as a necessary driver of poverty reduction through economic growth. The second generation PRSP (Economic Development for Poverty Reduction Strategy - EDPRS) currently under development is expected to give more emphasis to the productive sectors, in common with other second generation PRSPs. UK's lack of colonial baggage in regard to Rwanda is perceived as an advantage. The current RPF government seems inclined to favour Anglophone systems of administration, public financial management, etc over the current Belgian/French systems.
South Africa/Southern Africa
DFID Southern Africa has approved two linked land programmes, which are currently in their inception phase, for a total of £2m over 2 years. £1m goes to the Urban LandMark programme, and £1m to a rural land programme, that is being done in partnership with the Belgians.
The Urban LandMark programme has a strong focus on property rights issues. It arose in part as a follow up to work done as part of the theme area of Finmark, called Looking at the Workings of Township Residential Property Markets (TRPM). Further information on the research and consultations done by the TRPM programme is available at www.finmarktrust.org, under 'theme areas'.
Urban LandMark is intended to build on and expand on this work, and forms part of the 'Making Markets Work for the Poor' portfolio in DFID Southern Africa. It will focus on a range of inter-related institutional and regulatory issues affecting urban land markets, and why they currently do not work well for the poor. Although the programme "reference group" is still being finalised, the intention is to ensure that a range of different stakeholders in urban land and property markets are brought together to engage further with this challenge.
The rural component of the land programme is focused on ensuring the property (land) rights of farm dwellers are secured during the land reform restitution process by helping farm dwellers gain secure access/ownership of their land, and helping them to turn these rights into meaningful livelihoods through the provision of post-settlement support.
Tanzania
DFID Tanzania is lead donor for 2006 of the BEST programme. Development Partners have committed approximately $60m to the Business Environment Strengthening in Tanzania (BEST) Programme of which bi-laterals donors contribute $19m along with $41m of new IDA funds. $30m of the new IDA funding will be spent on supporting Government to roll-out part of its $300m Strategic Plan for the Implementation of the Land Laws (SPILL).
There is demand to do more as BEST only funds 10% of SPILL with minimal Government own resources into this area. Government sees land administration reform as important, but resources are scarce and usually deployed to more urgent issues (eg education and health). Non-technical expertise has come from DFID and World Bank Private Sector Advisors. Technical expertise for SPILL has/will come from a combination of Tanzanian Government advisors and international consultants.
Uganda
DFID was the lead donor on land reform until 2002, when DFID withdrew from the sector in favour of other priorities. In 1997 Uganda faced a deadline to produce a new land policy (embodied in the Constitution), and the draft was seriously deficient on pastoralists' and women's rights. With a standoff between government and civil society looming DFID offered to facilitate an open policy dialogue; government accepted. Although the resulting land act contained deficiencies it was significantly better than had DFID not acted. DFID recognised it was highly political and risky - but the then head of office agreed to take a calculated risk. Since 2002 DFID have maintained a low key watching brief. Elements of land reform and strengthening land administration fall within the purview of the Private Sector and other development partners groups.
2. There is a recognition that land rights, (land justice and better land administration) is a cross-cutting issue which runs across a number of different sectors (Agriculture, Environment, Justice, Law and Order, and Private Sector Development). Land is also seen a potential area for further conflict in any post-conflict resettlement of displaced populations in the north, as they try to re-establish ownership of land. Across these sectors there are a number of uncoordinated and generally small scale activities by a wide range of agencies (donor, Government of Uganda, academic and Civil Society Organisations). There is now a demand for more effective and coordinated action from various sectors, beginning with a stocktake of current activity, and leading to an analysis of sectoral interest and objectives and the development of some sort of coordination mechanism. From this exercise DFID hope to stimulate greater interest in land as an issue.
3. Through work in the donor group DFID have been instrumental in harmonising donor support, and DFID have been leading on initiatives to develop more coordinated and joined up approaches to land reform, this is a sector DFID consciously withdrew from 4 years ago, DFID don't have the capacity for further engagement beyond maintaining an overall coordinating role.
ASIA
Cambodia A new joint DFID-DANIDA livelihoods project will include a land management component that aims to reduce the vulnerability of poor rural people by securing title and access rights to land and resources. Work will focus on policy coherence, better legal and regulatory frameworks, government institutional capacity, access of civil society to information, and investment support to implement land use planning and management.
Pakistan
In Pakistan, DFID is working with the Asian Development Bank and the World Bank to improve the state of property rights. DFID have co-financed an Investment Climate Assessment by the World Bank, and an Administrative Barriers to Investment study by FIAS, which both indicated property rights (especially land titling) and contract enforcement as major barriers to investment. DFID is co-financing a national level programme on Access to Justice with the Asian Development Bank that looks at the issue of property rights. DFID are also funding technical assistance in the Punjab province which is helping the Government to automate land records.
There is an opportunity to scale up these initiatives but in a gradual manner. The demand for improving property rights in increasing and the Government is looking at legislative changes as well. In this regard, there is a need for legal consultants and private sector specialists.
India
DFID is working to (a) help improve access of tribal and other marginal groups to common property resources; (b) support land distribution and development programmes for the poor; (c) with FAO, distribute homestead plots to the landless; and (d) engage in policy discussion on land issues with the government and other development agencies. A new project in Orissa will develop a new state land policy and land administration system (land titling & registration) to improve land use efficiency, reduce the cost of land transactions, protect the rights of the poor and improve livelihoods.
Indonesia
DFID is supporting land and governance reforms in forestry by helping civil society to strengthen farmers' voices, and encouraging local government to respond. By helping poor people to access unused state land for agro-forestry production, poverty and environmental decline are being reversed: conflict is being reduced, corruption exposed, markets are being opened, producer groups are being strengthened, local government regulations are being reformed, old mindsets are changing.
Vietnam
DFID work on property rights has been through support to the Making Markets Work for the Poor project. Vietnam has made great progress in issuing land use right certificates to rural households. These formal land rights have given farmers the confidence to make long term investments in production. The issuing of land use certificates has also increased the economic utility of land through farmers' rights to mortgage, rent, exchange and transfer plots. The registration of land market transactions is relatively quick and convenient. Whilst progress has been made, poor rural households still face obstacles which prevent them from participating fully in the formal land market.
THEMATIC/GLOBAL INITIATIVES
Fisheries: where DFID are working on fisheries management - which includes a regional programme covering 25 countries in West Africa, and evolving country programmes in Sierra Leone and Cambodia - DFID are dealing with property rights and resource access issues. These are central to achieving sustainable and equitable fisheries development. They are intrinsically difficult issues, which may at least partly explain the relatively low profile of fisheries in bilateral programmes. The sector and those who depend on it are typically politically marginalised. The political will needed to address property/access issues is rarely present in sufficient strength. Where it is, major benefits from rational fisheries management can be realised - the most prominent example of this in the developing world is to be found in Namibia.
The Global Rights and Resource Initiative (RRI): is supported by DFID. This initiative focuses on forestry, by highlighting rights-based approaches, i.e., to turn rights into benefits by way of improving markets, regulations and general business climate, making them work the poor. The basic rationale is that DFID witnessed a quadrupling of the degraded forest area under community ownership and administration over the last decade and feel that this is a new and promising trend.
RRI also aims to secure property and user rights, and lobby for an expansion of this trend. The RRI works its way through regional programmes into country programmes. Country programmes would focus on three basic activities: (i) new strategic research; (ii) jointly exploring emerging policy options; and (iii) strengthening/catalysing local advocacy initiatives in support of reforms.
Policy Division: work has included
Studies that have overtly looked at the challenges of broader issues about land, poverty and power.
Support to the March 2006 AU/NEPAD/UNECA pan-Africa Consultative Workshop on Land Policy in Africa, in Addis, including producing a report on some of the associated risks and concerns.
DFID Policy Division Team/World Bank programme on Land Policy and Administration for Agricultural Growth for improving national land policy and administration that will produce new, practical options that will improve land records and tenure security, formalise rights and improve poor people's access to land. This will unlock agricultural productivity and its links to wider growth. Specific deliverables:
Policy Division Teams will facilitate lesson learning across DFID offices currently running land programmes (Uganda, Mozambique, Kenya, Rwanda, South Africa, India, Ghana, Indonesia, Angola, and others).
May 2006 [1] The figures for GPOBA exclude an estimated 1,200,000 households expected to get access to energy services in Egypt for the first time from an exceptionally large demonstration project. |