|
Challenges to a Successful
EIF
 The challenges that
have been identified with EIF being a success are its
management structure, capacity to absorb aid and trickle down
effect through value addition. These are discussed in detail
below.
Management Structure
Even with national
implementation units in the countries, the problems around
seeing projects initiated with Technical Assistance (TA) tend
to jeopardise the sustainability of the initiatives once the
support through Technical Assistance comes to an end.
An in the case of
Zambia it had received substantial TA in public expenditure
management, tax policy, bank supervision, monetary policy and
operations, financial sector issues, payment system and
balance of payment statistics. When a t technical assistant in
budget management left, the country requested that they be
replaced as rapidly as possible with more technical
assistance. This illustrates that there is great need to build
capacity within the government rather than provide capacity to
government.
Although in Geneva, the
IF board now has a “think tank” function; an IF Secretariat
that has more staff to ensure monitoring and follow-up; and an
IF Steering Committee that acts as the supervising organ of
the initiative. The quality of technical assistance may have
improved but the problem of sustainability after technical
assistance is provided still remains unaddressed.
Capacity to Absorb
Aid
The second challenge is
the capacity to absorb aid for trade. There are three areas of
concern that relate to this which are management capacity,
storage of public data, and hazardous management. With regard
to debt management in Zambia it has been found that the
Ministry of Finance and National Planning is understaffed, has
high labour turnover, out dated equipment and still conducts
manual calculations. The Jesuit Centre for Theological
Reflections (JCTR) research on the Public Debt management in
Zambia also highlights that the documentation of Public Debt
Data is weak because there is no central depository of loan
agreements and it makes it impossible to quantify the
exactitude of Zambia’s debt because of fragmented data.
Lastly, there is great concern on the management,
accountability and control of public finances that come in the
form of aid.
Trickle Down Effect
through Value Addition
The biggest challenge
with the implementation of the Honey and Livestock value chain
analysis scheduled in the EIF work plan for 2009 is the
guarantee that there is a trickle down effect to the raw
producers. In preliminary findings – there are concerns that
the out grower honey producers in North-West Province, Zambia,
may not benefit to the same extent as the exporter of honey.
Therefore, steps need to be taken to either ensure that the
honey producers receive equitable prices for their honey or
the value addition assistance is directly provided to the
producers and not the middleman exporting if the EIF is to
address poverty reduction as well.
Competing Needs of
Aid for Development
Financing the aid for
trade facility is part and parcel of the overall pledge by
donors to increase their Official Development Assistance (ODA)
to 0.7 percent of their GDP. Stakeholders in developing
countries tend to assume that there is a separate and
additional funding for Aid for trade. Since this is not the
case and most developing countries have a number of competing
national priority needs, there will be a need to balance
between funding for social development and aid for trade
projects. This is because improving trade capacity is a
broader spectrum of issues aside from infrastructure.
The EIF will therefore
need to be further fine tuned to be responsive to the issues
of Management structure by ensuring that in the event
technical assistance is provided there should be placement of
a local understudy to guarantee continuity in programmes and
projects.
Secondly, the reality
of poor absorption capacity of Zambia as a donor recipient
country cannot be emphasised enough. Therefore, there is need
to ensure there is accountability of disbursed aid through the
aid for trade facility by ensuring that the level of
accountability goes beyond the scope of the donors and
recipient governments. The participation of people is a key
element in extending accountability to the population, which
will also compliment efforts towards transparency on the
allocation and distribution and use of resources.
Thirdly, the benefits
gained from value addition support should be equitably felt by
the out growers and actual producers. If poverty reduction is
truly intended to be achieved, increasing incomes to improve
on standards of living must be enhanced when possible.
Lastly, there is great
need to ensure that aid for trade does not eat into support
for other important development programmes. This is because
there is a broader spectrum of issues such as literacy rates,
health and human capacity to engage in the market to take into
account when trying to improve the trade capacity of
countries. In conclusion, the EIF does have the potential to
unlock opportunities to enhance the trade capacity of
countries like Zambia. The challenge that will remain is the
fine tuning of the EIF to ensure that it is responsive enough
to the dynamic and complex web of obstacles to Zambia
performing to it’s potential and being able to benefit from
the EIF.
Article contributed
by Humphrey Mulemba , JCTR
back
 | 
The introduction of EIF by World Trade Organisation (WTO) is a
most welcome development. EIF will help integrate the LDCs
into the world trading system and will make it possible for
them to positively participate in international trade. 
The
overarching concern by Zambians in respect to trade and
commerce is that Zambians and their companies need to be
accepted as investors in the domestic economy. As such
Zambians must be in the forefront of being invited to
participate in the new Economic Zone. Zambians must be the
first to be linked to any foreign investment that requires
supporting goods and services to roll out any huge investment
in the country.
CUTS ARC, Lusaka with
Civil Society for Poverty Reduction (CSPR) hosted a
sensitisation workshop on the EIF. The objective of the
workshop was to build awareness about the EIF and trade,
identifying the needs of those involved in trade and those
marginalised during trade, and formulating strategies to
improve trade and integrate these strategies into national
programmes.
CUTS ARC Lusaka hosted
a national sensitisation workshop on the EIF for poverty
reduction in Lusaka, Zambia, on January 21, 2009. The main aim
of this event was to raise awareness among all stakeholders
working on trade and development issues on the importance of
the EIF process to LDCs such as Zambia. It was also envisaged
that the workshop could also be used as a platform to
sensitise and engage stakeholders on the EIF process so that
they can assess the opportunities of the EIF to LDCs. 