COMMON MARKET FOR EASTERN AND
SOUTHERN AFRICA
EIGHTH CALL FOR SUBMISSIONS UNDER THE COMESA ADJUSTMENT FACILITY (CAF)
Introduction
The COMESA Adjustment Facility (CAF) provides for support to COMESA Fund Member States to enable them make the necessary fiscal, economic and social adjustments that inherently accompany the implementation of regional integration commitments. This includes broad adjustment support for the implementation of policies and programmes relating to trade liberalization reforms and regional integration efforts that are in consonance with the COMESA integration agenda.
The CAF currently has funds under the Regional Integration Support Mechanism (RISM), a programme funded by the European Union (EU) under the 10thEuropean Development Fund (EDF). The specific objective of RISM is to support Member Countries to participate more fully in the COMESA, EAC and Tripartite Free Trade Areas and COMESA and EAC Customs Unions and Common Market with minimum disruption to public expenditure commitments as well as enabling them to implement economic reform programmes in the context of regional integration.
Seven Calls for submissions have been launched from the time the CAF became fully operational and have provided different levels of financial and technical support to the Member States. This current call is the eighth and lastCall for Submissions to be issued for continued support to eligible countries that have established Regional Integration Implementation Programmes (RIIPs). The financing modalities under which each Member State is eligible to receive RISM financial support in 2017 will be determined by the EU at the point of assessment of the submissions and at the point of disbursement of funds. The COMESA Secretariat will provide the necessary guidance to Member States about their respective eligibility status when the EU provides its assessment. In order to guide the preparation of documents in response to this Call, detailed Guidelines for CAF/RISM Support and Related Annexes are included as Attachment 2.
Objective
The objective of the 8thCall for Submissions is to invite Member States already implementing RIIPs,approved under previous Calls for Submission (3rd – 6th Call for Submissions),to submit their final Progress Monitoring Reports (PMRs) against performance of 2016 targets. The 8th Call for Submissions will allow for an overall evaluation to be undertaken in relation to the achievement of indicators under the Performance Assessment Framework (PAF). Member States are therefore urged to give clear status of implementation of all applicable indicators as at June 2017.
Eligibility
To submit a request for the lastvariable (performance-based) tranche of RISM funding, a country must already be implementing a regional integration programme formally approved by the RISM Advisory Committee under previous Calls for Submissions. Countries that are not yet implementing regional programmes under the RISM framework cannot respond to the 8th Call as it is being issued for the final assessment of targets set under the programme. Further, countries that do not have at least 3 targets for assessment cannot respond to the 8th Call due to the low level of ambitiousnessof their programmes.
Technical Assistance in Preparation of Submissions
Technical assistance will be available for the preparation of submissionsfrom the COMESA Secretariat directly and through sub-contracting of national consultants who will be identified by the Member States and supported by the Secretariat. Formal requests for technical assistance must be made for a Member State to benefit from the available technical assistance. The requests for technical assistance can be made by contacting the Secretariat at the details further below. The deadline for the request of technical assistance is 4thSeptember 2017, which is 60 days after the launch of this Call for Submissions. Generic terms of reference for national consultants, which the Member State must customize to its specific country context, have been included to this Call as Attachment 3 (3.1 for PMR preparation and 3.2 for project preparation). A generic evaluation form for identifying and hiring of national consultants at national level has also been attached as Attachment 4.
The preparation of Submissions will be coordinated by the national Focal Point in consultation with the National Inter-Ministerial Coordinating Committee (NIMCC), which is responsible for the drafting and submission of the Progress Monitoring Report and for coordinating and monitoring the implementation of the regional integration programme.
Contents of Submissions
The submission shall include the following:
-Submission Form which should clearly indicate that it is a follow up request (in accordance with the guidelines).
-A full Progress Monitoring Reportand all its annexes including an updated PAF matrix clearly indicating status of implementation of applicable indicators as at 30th June 2017(in accordance with the guidelines).
-Authentic Sources of Verification for all indicators targeted and achieved in the year 2016 (January 2016- June 2017).
Documents attached to this Call
- The Indicative Annual Nominal Allocations (Attachment 1) providing the indication of the maximum funds that a country is likely to access under the 8thCall for Submissions
- The detailedGuidelines for CAF/RISM supportand its annexes (Attachment 2) describing the full process of preparing PMR submissions and projects documents, where applicable.
- Terms of Reference for National Consultant (Attachment 3.1) and Terms of Reference for National Expert on Project Preparation(Attachment 3.2)
- Evaluation Form for hiring of national consultant (Attachment 4)
Deadline
The Deadline for submission of PMRs is 4 October2017. Please note that following the approval of submissions, countries that will be eligible for project based support will be required to formulate an additional project document within the specified timeframe of Five (5) months.
Submissions should be made in hard copy to:
The Secretary General
COMESA Secretariat
P.O Box 30051
Lusaka
Zambia
Or via emailed or other soft copy:
To:Ethel Mwale on
Cc:;
Clarifications and Consultations
For clarifications and consultations on the submission process, please write to the following address:
To:Ethel Mwale on
Cc:
Attachment 1: 2017 Indicative Annual Nominal Allocations under RISM
Assessment Ratio / Eligible for RISM / Total 2017, EuroBurundi / 2.8 / Yes / 832,615
Comoros / 0.9 / Yes / 623,256
Djibouti / 0.9 / Yes / 623,256
D R Congo / 6.5 / Yes / 1,240,315
Egypt** / 11.5 / No / -
Eritrea* / 0.9 / No / -
Ethiopia / 5.2 / Yes / 1,097,069
Kenya / 11.5 / Yes / 1,791,259
Libya** / 11.5 / No / -
Madagascar / 4.0 / Yes / 964,842
Malawi / 3.6 / Yes / 920,767
Mauritius / 7.1 / Yes / 1,306,428
Rwanda / 2.8 / Yes / 832,615
Seychelles / 0.9 / Yes / 623,256
Sudan / 6.1 / Yes / 1,196,239
Swaziland / 3.0 / Yes / 854,653
Uganda / 4.1 / Yes / 975,861
Zambia / 5.2 / Yes / 1,097,069
Zimbabwe / 11.5 / Yes / 1,791,259
Total / 76.1 / 16 / 16,770,761
*Non-COMESA Fund Member State
**Non-ACP COMESA Member State
Table of Content
List of Acronyms
1.Introduction
2.Purpose
3.RISM Design and RISM Process
3.1 RISM Design
3.2RISM Process
4.Determination of Eligibility
5.Calculation and Publication of Annual Nominal Allocations
5.1Calculation of Annual Nominal Allocations
5.2 Publication of the indicative Annual Nominal Allocation
6.Call for Submissions
6.1 Issuing the Call for Submissions
6.2 Time-Plan and Stages in Submission Process
7.Structure and Rationale of RIIP and PMR Submissions
7.1 Structure of RIIP
7.2Structure of PMR
8.Performance Assessment Framework (PAF) and Scoring Mechanism
8.1 PAF and Performance Indicators in the RIIP/PMR
8.2 Scoring Mechanism
9.Impact Indicators (Higher Level)
10.Request for Technical Assistance
11.Submission in Response to the Call
12.Review, Assessment and Approval of Submissions
13.Decision Making Process of RISM Committees
13.1RISM Management Committee
13.2RISM Advisory Committee
14.Formulation, Finalization and Signature of Project submissions
15.Signing of Grant Agreement for Regional Integration Support
16.Disbursement of RISM/CAF Resources
List of Annexes
List of Acronyms
ACP African, Caribbean and Pacific
ANAAnnual Nominal Allocations
CAF COMESA Adjustment Facility
COMESACommon Market for Eastern and Southern Africa
EACEast African Community
ECEuropean Commission
EDFEuropean Development Fund
ESA-IO Eastern and Southern African – Indian Ocean
EU European Union
FT Fixed Tranche
MSMember State
NMCNational Monitoring Committee
PAFPerformance Assessment Framework
RIIPRegional Integration Implementation Programme
RACRISM Advisory Committee
RISM Regional Integration Support Mechanism
RMCRISM Management Committee
VT Variable Tranche
1.Introduction
The COMESA Treaty in Article 150 provides for a “Special Fund for Cooperation, Compensation and Development for tackling the special problems of underdeveloped areas and other disadvantages arising from the integration process”. As such, in 2002, the COMESA Fund protocol was adopted which includes a special facility, referred to as the COMESA Adjustment Facility (CAF), for the provision of adjustment support. In 2008, the COMESA Fund adopted Operational Rules for the Adjustment Facility that largely provided for mechanisms to support revenue losses due to the implementation of regional integration programmes. Subsequently, the COMESA Fund Ministerial Committee, with the support of the COMESA Secretariat, reviewed the objectives, methodologies and operational rules of the CAF and adapted them to the new demands of the countries of the region. The revised CAF Operational Rules (now referred to as Operational Regulations) were adopted at the COMESA Fund Ministerial meeting of June 2010.
In line with the principles of Aid Effectiveness, the European Development Fund (EDF) funded the CAF through the Regional Integration Support Mechanism (RISM) which is embedded into the CAF in terms of both the objectives and delivery of the support and resources.
The support provided, is expected to contribute to an increased implementation of regional commitments and programmes at the national level through increased access to financial and technical resources by Member States. The rationale is that the implementation of regional commitments at national level has an adjustment cost; this is in terms of both the cost of the reforms that a country will have to undertake to adjust its economy to a more integrated space ("the costs of transposition") and the cost of customs revenue foregone for some countries that have not yet undertaken certain initial adjustments (such as joining the COMESA Free Trade Area). It is expected that increased access to resources to cover some of those costs will provide an incentive for Member States to implement their commitments at national level.
As it is the national governments' responsibility to cover the main part of adjustment costs and to finance them through their development plans and strategies, RISM is not expected to finance the totality of these costs, but rather to contribute to address them.
2.Purpose
These guidelines are an elaboration of the CAF Operational Regulations and of the RISM Contribution Agreement signed between COMESA and the EU under the 10th European Development Fund (EDF).
The purpose of these guidelines is to provide Member States, the Secretariat and other stakeholders with guidance on the full process of seeking, utilizing and reporting on RISM support, including the preparation, submission, evaluation and approval of submissions. The aim of the guidelines is to promote consistency and clarity in the processes involved in:
-Fulfillment of RISM eligibility criteria;
-Calculation and announcement of financial resource allocations;
-Preparation and submission of applications, including the Progress Monitoring Reports of theRegional Integration Implementation Programmes (RIIP), with the associated Performance Assessment Frameworks (PAFs);
-Provision and submission of valid sources of verification of all targets achieved during the assessment year;
-Transparent assessments of Member State submissions;
-Key considerations in the decision making processes for submissions;
-Preparation and submission of project documents, where applicable;and
-Timing and Agreement on modalities of disbursements
3.RISM Design and RISM Process
3.1 RISM Design
RISM is expected to contribute to increased implementation of regional commitments and programmes at national level through increased access to resources by Member States. RISM has been designed to primarily support the implementation of regional trade reform and trade facilitation programmes at national level.
The allocations and approvals of RISM/CAF resources will be done against the implementation of well-defined and ambitious regional integration programmes, with indicators detailed in the PAF, that have been established byeach individual Member State. Allocations will be determined, at the regional level, through an Indicative Annual Nominal Allocation (ANA). The allocations will be based on assessed and validated PMRs reflecting achievement of regional commitments expressed in the performance indicators (performance-based variable tranches).
RISM/CAF resources will be delivered through two financing modalities, namely:
a)Budget Support: Only Member States that are eligible to EU budget support at the moment of disbursement will be entitled to receive RISM funding through budget support. For this modality, the EU will determine eligibility to EU budget support. The COMESA Secretariat will transmit the approved documents to the Delegation of the European Union to the Republic of Zambia and COMESA for verification, subsequent transmission and final endorsement by the competent Director of DG DEVCO of the European Commission.COMESA Member States will be encouraged to consult with the EU Delegations present in the country on their potential eligibility to budget support under RISM Consolidation.
Or
b)Project based support: where a country is not eligible for budget support, or where project support would be a simpler, more preferable and more efficient disbursement and implementation mechanism at the national level. In that case, the country will prepare an additional project document after the approval of its PMR submissionby the COMESA Fund Ministerial Committee. Project design and implementation will be guided in line with the Project Management Cycle.
The EU will provide its assessment of the appropriate financing modalities under which respective Member States are eligible to RISM resources at two points, namely: at the point of assessment of PMR submissionsby the RISM Management Committee (RMC) for the consideration by the RISM Advisory Committee (RAC)/COMESA Fund Ministerial Committee; and at the point of disbursement of funds from the EU to the COMESA Secretariat. The COMESA Secretariat will provide the necessary guidance to Member States about their respective eligibility status and pursuant to the approval of their submissions, project supportcountries that will be given an additional five (5) months for the preparation of respective project documents.
3.2RISM Process
The RISM process is illustrated in the flowchart below. It will start with the revision and updating of these guidelines and the preparation of the indicative Annual Nominal Allocations (ANA) by the COMESA Secretariat. After the preparation of the ANA, the other processes will involve: an official launch of a Call for Submissions, which will also publish the ANA; the preparations of the PMR; review, assessment and approval of the submissions; processes of the disbursement of funds; and monitoring of and reporting on progress in executing the RIIP. These sub-components of the overall process of RISM are systematically described in the ensuing sections of these guidelines.
Legend:
ANA = Annual Nominal Allocation
FT = Fixed Tranche
MS = Member State
PAF = Performance Assessment Framework
RIIP = Regional Integration Implementation Plan
VT = Variable Tranche
4.Eligibility Criteria
Three core aspects of eligibility are considered and used to determine the eligibility of each Member State to access RISM support. The aspects or eligibility criteria are drawn from the CAF Operational Regulations and are summarized as follows:
i)Administrative eligibility:
a)Be a COMESA or EAC Member State and an ACP Country signatory to the Cotonou Agreement;
b)Deposit the instrument of ratification of the Fund Protocol;
c)Payment of full assessed contributions to the COMESA Fund; and
d)Compliance with Authority decisions on budgetary contributions to the Secretariat.
ii)Regional policy eligibility:
a)Demonstration of engagement towards the effective implementation of the regional integration process of COMESA and EAC consistent with the aims and objectives of the governing documents of the two institutions; and
b)Engagement in an overall reform programme to implement adopted regional integration programmes including regional trade liberalization, facilitation of investment and facilitation of the movement of goods, services, capital and people across COMESA borders and improvement of the overall business environment – a RIIP in the context of these Guidelines – as part of the process leading to a fully functional Common Market.
iii)Programme specific eligibility:
a)The programme which must be formulated as a RIIP, should be consistent with a recognized national economic strategy as reflected in the Member State’s policies and/or national development plans with clear linkages to implementation of regional trade and integration programmes;
b)The programme must be co-financed by the national government and other cooperating partners, reflecting that Member States also provide (counterpart) funding contributions to the Programme; and
c)The programme must always include a PAF, which is an integral part of the RIIP and PMR.
5.Calculation and Publication of Annual Nominal Allocations
The indicative ANA is a provisional or tentative amount that is confirmed upon the approval of a Member State’s submission by the COMESA Fund Ministerial Committee.
5.1Calculation of Annual Nominal Allocations
In accordance with the CAF Operational Regulations, the COMESA Secretariat shall calculate the indicative Annual Nominal Allocations (ANA) for each Member State from the sum total of the RISM resource available for a given year. The Secretariat shall calculate the indicative ANA based on all eligible Member States as will be determined prior to the launch of the Call for Submissions. The formula for calculating the indicative ANA has been determined as follows in the CAF Operational Regulations:
a)50% of the total available funds for a given year shared equally among the eligible Member States
b)50% of the total available funds for the given year shared pro-rata to the assessed contributions to the COMESA Fund of the eligible Member States and weighted against 100%.
5.2 Publication of the indicative Annual Nominal Allocation
The indicative ANA will provide the indication of the maximum funds that a country can access in a given year. COMESA will inform Member States of their respective indicative ANA at the launch of the Call for Submissions.