In 2019, Cabo Verde became one of the first countries to begin implementing an integrated national financial framework (INFF). To ensure adequate financing resources for its investment plans aimed at achieving the Sustainable Development Goals, the government recognised the need for a more systematic approach that would help identify and mobilise public, private and international resources. The INFF will help in setting up a comprehensive financing strategy and a clear action plan.
Cabo Verde is part of the group of small island developing states (SIDS). Although SIDS are characterised by disparate human development conditions, they face some common financing challenges: limited capacity to mobilise domestic resources, high costs of services, and vulnerability to environmental and economic shocks. Cabo Verde’s experience in initiating an INFF, along with that of the Solomon Islands, another early adopter, will certainly bring valuable lessons for other SIDS.
The first scoping mission to establish an INFF in Cabo Verde took place in November 2019 and was led by the government, supported jointly by the United Nations Development Programme (UNDP), other United Nations agencies and the European Union. An inception report and a roadmap have been defined; these were agreed upon with the government in March 2020.
INFFs are not one-size-fits-all plans, but need to be tailored to the conditions and priorities of each country and take stock of that country’s progress on various topics related to the INFF building blocks. INFFs do not start from scratch, but build on the work already undertaken in financing the SDGs. This is certainly the case for Cabo Verde, where the government, with support from the World Bank and UNDP, had previously established a monitoring and evaluation (M&E) system to help measure progress on implementation and results of the National Development Plan (Plano Estratégico de Desenvolvimento Sustentado – PEDS), built around the country’s priority SDGs.
The M&E system consists of an ICT Information and Communication Technology (ICT) platform managed by the National Statistics Institute (Instituto Nacional de Estatística - INE), which connects to several government sources to compile and store administrative data. The development of quality indicators will be finalised soon, and further training of personnel from the INE, the Ministry of Finance and other agencies, will be carried out.
According to Gilson Pina, Director for Planning at the Ministry of Finance, ‘The system will show results at the right time, in real time, from implementation’ and will ‘allow changes if the objectives are not being achieved’. Such monitoring is vital; Pina cited a recent example in the agricultural sector, where more than USD 7.2 million had been invested but with little impact on the livelihoods of the rural population, thus continuing a trend of massive urbanisations.
‘We do not want that to happen with our PEDS, and the new evaluation and monitoring system has to be aligned with all sectors because we do not have unlimited resources’, Pina concluded.
The INFF roadmap should provide entries for linking existing financing systems – such as the annual public budget process, the national investment system and the medium-term expenditure framework – with a results-based framework. This can generate recommendations for efficient allocation resources, thus promoting stronger accountability systems. As a result, the M&E system can be a fundamental tool in facilitating work in other important areas of the INFF, such as:
- the costing exercise under the assessment and diagnostics building block, which the government, with support from the World Bank, launched in December 2019;
- the budgeting process part of the financing strategy building block, which is aimed at orienting public resources towards PEDS priorities;
- ensuring accountability and providing reliable information and data for the governance process.
The Cabo Verde experience shows how one successful component of the INFF strategy can help towards achieving the other building blocks, including the core objective of establishing a financing strategy.