Phased Programming of Lomé Funds: Lessons from Current EU and ACP Experiences

As negotiations for the mid-term review of Lomé IV reach their climax, one of the controversial issues still to be agreed is the European Union (EU) plan to introduce phased programming to Lomé resources. Under the proposal, the allocation and disbursement of funds will be linked to performance rather than to fixed aid entitlements as in the past. It reflects two EU concerns. First, to put its money where it can best be used. Second, to ensure that EU development cooperation priorities are more clearly reflected in the way that Lomé resources are programmed and allocated. Countries in Africa, the Caribbean, and the Pacific (ACP) that use Lomé funds properly will be rewarded with further funds. On the face of it, there is nothing wrong with the principle of phased programming. Achieving "value for money" is the order of the day. This calls for a flexible and realistic allocation of scarce aid budgets. Yet on the ACP side, there is much opposition.  It is claimed that phased programming will erode the Lomé partnership and give too many discretionary powers to the EU. Beyond these political arguments, there are also managerial concerns. Which criteria will be used to assess performance, how will the criteria be applied, and by whom, and is there sufficient capacity in the EU and in ACP states to manage the new system effectively? Read Policy Management Brief 2: