Evaluating Aid for Trade on the Ground: Lessons from Ghana

Assessing the impact and effectiveness of the Aid for Trade (AfT) initiative in Ghana, this report uses nine indicators to measure whether AfT has delivered on its key mandate to provide “additional, predictable, sustainable and effective financing” for building developing countries’ capacity to trade.

The indicators include:

  1. AfT Funds Trajectory—This aspect of the study looks at the flow and nature of funds Ghana received, asking whether they are: “additional”—do they constitute new financing; “predictable”—do donor pledge amounts match what is ultimately dispersed; and what is the nature of the funds—grants or loans?
  2. Ownership—Analyzing the situation both in theory and in practice, the level of ownership covers three broad elements: the extent to which trade is mainstreamed into national development priorities; the extent of national-level coordination and stakeholder involvement in trade issues; and the sustainability of AfT projects.
  3. Alignment—This aspect of the study looks at: 1) whether donor programs are aligned with Ghana’s development strategies, national priorities and trade development priorities, 2) development partners’ use of country systems/parallel implementation structures, and 3) provision of “untied aid”.
  4. Donor coordination—The assessment looks at the level of intra-donor coordination, particularly joint funding mechanisms through the Pooled Fund for the PSDS II.
  5. South-South cooperation—The data on non-traditional donors (NTDs) is limited. This study looks at stakeholder perceptions on the increasing role of NTDs.
  6. Absorptive capacity—This section evaluates the capacity of Ghanaian institutions to utilize aide resources.
  7. Environmental sustainability—This aspect of the study looks at how much environmental issues are incorporated into AfT projects.
  8. Macro-level impact—This section looks at AfT’s contribution to trade performance.
  9. Micro-level impact—This section includes an in-depth analysis of the performance a regionally-oriented AfT development project based in the northern regions of Ghana, the poorest regions of the country.

Overall, the assessment demonstrates that AfT has been partially effective and has generated some positive impact. However, the gains are limited, mainly because of systemic, procedural and human resource related factors arising from both the internal and external political economies.

This study was prepared for the International Center for Trade and Sustainable Development (ICTSD).

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