Office of Evaluation and Studies    
  International Fund for Agricultural Development

In a number of projects in Eastern Africa, the arrangements between funding agencies have been less than satisfactory and have resulted in delayed project start-ups or general confusion in the implementation procedures. While cofinancing can enhance the scope and size of a project, from the borrowers point of view it is a two-edged sword which needs to be carefully controlled for it not to add more complexity than rewards.

In Kenya, (188 KE), the nation-wide Animal Health Services Rehabilitation Programme was funded by the International Development Association (IDA), the United Nations Development Programme (UNDP), the Organization of the Petroleum Exporting Countries (OPEC) and IFAD. The programme had a bad start because the IFAD design was reappraised by IDA and the scale of the project increased by a factor of over three times, including a greatly increased contribution from the Government of Kenya. The two appraisal reports caused confusion for the implementers and there were delays in concluding the ever-increasingly complex arrangements between the funding agencies. All this took place in a situation where the implementing agency was known to be weak and where counterpart funding was rarely adequate.

In Rwanda (232 RW), the Gikongoro ADP was funded by UNDP and United Nations Capital Development Fund (UNCDF) grant funds and an IFAD loan, with overlaps between the categories funded by IFAD and UNCDF. The project was (overly) complex with seven components, some of which were themselves made up of disparate activities; implementation was further hampered when the planned appointments of coordinating officers were cancelled by the government. Not surprisingly, the Mid-term Evaluation (MTE) reported that project impact was very limited, mainly because of the difficulties of coordination, and also because the management was too inward looking and concerned with the accounting of funds available, rather than making use of them.

Villagers from Tosing working at water pipes laying as part of the water supply componentIn Burundi (024 BU), there were five cofinanciers, including IFAD. The MTE reported that implementation was directly affected by poor coordination between the funding agencies, resulting in delays in disbursements. Eventually, a review of the projects financial situation highlighted the imbalances between the disbursements of ADF, IFAD and OPEC, which required a completely new financing plan to be compiled, during implementation, although the opportunity was also taken to alter some of the components.

The above examples illustrate the need to ensure that there are clear working arrangements between the funding agencies, so that the overall objectives of development assistance can be met, without imposing an extra and unwelcome burden on the borrowing country.

- The financing plan of a project should be as straightforward as possible, so as to avoid administrative complexities and adverse effects on the achievements of overall project objectives. The items to be funded, wherever possible, should clearly be allocated to one financing agency only, and the specific accounting requirements of each agency should be as similar as possible, so as not to create additional burdens and confusion for the implementing agency.

- In countries with limited implementation capacity, multi-donor projects should be avoided. Where they are used, the arrangements should be as simple as possible, but should contain the level of detail which is relevant to implementation without the implementing agency having to revert to the funding agencies or decisions on items, such as the appointment and payment of consultants, etc.

Select any of the following related project profiles for background information: 188 KE, 024 BU.

 


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