7 6 S O U T H E R N A F R I C A N development of strategies and policies to improve public D E V E L O P M E N T C O M M U N I T Y finance management and allocation systems across the 5.2.2 Official Development Assistance region and to harmonise approaches, if coordinated at a Although official development assistance has been regional level, will harness greater returns by helping to declining and averages about 0.24% of industrial country lower transaction costs across a larger market. This will GDP it remains one of the important sources of finance for encourage private savings, investment, exports and the implementation of the RISDP. NEPAD can play an growth and will make the region an attractive destination important role in persuading industrial countries to since the private sector will be able to count on relatively increase the level of ODA to the recommended 0.7% of constant prices and interest rates in all SADC countries. their GDP. The absorptive capacity of SADC in the utilisation of ODA resources will have to be addressed. NEPAD STRATEGIES identifies several constraints including good governance a) Maintenance of macroeconomic stability There is need to create and sustain macroeconomic stability by managing the macroeconomic fundamentals as envisaged in the SADC MOU on Macro- (political, economic and corporate). STRATEGIES • economic convergence. building programmes at national level in the debt b) Public Financial Management management, strengthening public budgeting and There is need to improve public financial manage- financial management and effective absorption of ment through fiscal prudence and financial discipline, and avoid financial imbalances. Member States donor assistance; • would need to implement capacity building pro- Work through NEPAD and other fora to mobilise and increase the level of ODA to 0.7% of industrial grammes in public finance management. c) Development and implementation of capacity countries' GDP, reform the aid-delivery system to Fiscal Management ensure domestic ownership by recipients and improved There is need to develop mechanisms for increasing coordination with recipients' domestic priorities, and to revenues through strengthening tax administrations streamline the fragmented delivery system; and to efficiently collect taxes and to broaden the tax net. • Work through NEPAD and other fora to reform ODA This will require development and implementation of relationship including the setting up of mechanisms programmes to strengthen the capacity of Member by recipients to engage OECD/DAC and other donor States. structures. d) Good Economic Governance Good governance, including accountable and transparent public resource management, is 5.2.3 Debt Relief fundamental in establishing credibility that will Unsustainably high external debt has indeed become a attract investment resource flows. NEPAD has key constraint to development. Debt relief is an important identified and prioritised codes and standards for part of a comprehensive strategy to create the basis for achieving good economic and corporate governance. sustained growth and poverty reduction. The Heavily In this context, harmonisation of best practices in Indebted Poor Countries (HIPC) Initiative is the accounting and auditing standards across the region international response to provide comprehensive debt for sound public financial management is an relief to the world's poorest and heavily indebted imperative. Member States are encouraged to countries. The Enhanced HIPC Initiative is based on three implement the programme of harmonisation of key elements: deeper and broader debt relief, faster debt auditing and accounting standards coordinated by relief, link between debt relief and poverty reduction. the Eastern, Central and Southern African Federation of Accountants (ECSAFA). The resources made available as a result of debt relief initiative are a potential source of finance for the