The Government of Kenya and development partners have taken steps to harmonize, align, and coordinate their activities with the aim of increasing the efficiency and effectiveness of aid and of reducing transactions costs to government, in line with Paris Declaration 2005.

The Harmonization, Alignment, and Coordination Donor group (HAC) was established in 2004 as a subgroup of the Donor Coordination Group (DCG) with World Bank as permanent Co-chair, with an initial membership of seven bilateral and multilateral agencies.  In 2008, after the Third High level Forum in Accra Ghana, the government felt the need to take stronger leadership of the whole Aid Effectiveness Agenda and therefore it was agreed that all HAC meetings will be held at the Treasury Building which houses the Finance Ministry and that all meetings to be jointly chaired by Government and Development Partner Co-chair. A further need arose to review the HAC group and based on the recommendations, restructure it. A review of HAC was finalized in February 2009 and this was followed by a retreat in September 2009 in order to discuss the recommendations.

An outcome of the September 9-11, 2009 Aid Effectiveness Retreat recommended that the Aid Effectiveness Group (AEG) will replace the HAC Group and will be firmly rooted in the External Resources Department (ERD), Ministry of Finance with increased participation from the Planning Ministry, along with the then Office of the Prime Minister and other line ministries.  The AEG continues the role of the HAC, but now with a sharper focus on delivery of the Paris, Accra and recently Busan Agendas.  It serve as an information clearing house collecting and sharing information about emerging good practice at sector level, analyze and address challenges to achieving the Paris/OECD indicators, and reporting on their progress.  It reports to the Development Partnership Forum (DPF) on the aid and development effectiveness agenda.  All of these efforts are supported by the Aid Effectiveness Secretariat (AES) formalized in 2010. which replaced the HAC Secretariat.

From the beginning of the Kenya Joint Assistance Strategy (KJAS) period, extending from 2007 to 2012, the HAC/AEG group comprised 17 Development Partners together with the Government of Kenya.  They are Canada, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, Spain, the United Kingdom, the United States, and the African Development Bank, the European Commission, the United Nations, and the World Bank Group.  Work is ongoing to bring additional countries on board with the KJAS update process finalized in March 2011, which will now run through June 2013 to align with the GOK budgeting cycle. China has been participating as an observer. In the spirit of Partnership and Cooperation, Non KJAS members are invited to be part of the Aid Effectiveness Agenda in Kenya and be part of the Updated KJAS.

As Kenya is not aid dependent and currently external financing only represents 16% of the government's  total 2013/14 budget, an important role for AEG will be to combine the knowledge and financing of Development Partners (DPs) and the Government of Kenya to leverage Development Partner support on a much larger scale and increase development results. However, the implementation of the devolved system of governance as per the Constitution, poses great challenges to development partner and county governments coordination.

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