FIDAction

Issue number 7 - August 2007

Message from the director of the Western and Central Africa Division

Poverty reduction strategy papers (PRSPs), introduced in 1999 along with the enhanced Heavily Indebted Poor Countries (HIPC) Debt Initiative, have generally brought greater coherence in aid to the world’s poorest nations. They have helped make the fight against poverty a priority.

PRSPs have become the framework that guides governments and donors in pro-poor policy formulation, and in resource mobilization and allocation in all HIPC countries. But while PRSPs have brought overall coherence to aid efforts, they have not yet achieved their full potential.

There are still some challenges, especially in their approaches to rural development. Participation by all stakeholders needs to be improved. Instruments for monitoring and evaluating the outcomes and impacts of proposed PRSP options for reducing rural poverty are yet to be developed. Governments need to invest in this area, with the support of donors.

Rural development is crucial to alleviating poverty in Western and Central Africa and will help most countries in the region reach the Millennium Development Goals (MDGs). IFAD is working to contribute to the improvement of the quality of analysis of agriculture and rural development, particularly in the PRSP processes. The rural content of PRSPs has recently been assessed in eight of the 13 West African countries that have full PRSPs. The assessments have shown that country ownership or government commitment to poverty reduction is still limited.

We need a more systematic approach towards monitoring and assessing the degree to which the key dimensions of rural poverty are taken into account in PRSPs. There needs to be greater coherence and depth in proposed options for addressing the technical, institutional and policy matters related to rural poverty.

IFAD and the International Food Policy Research Institute (IFPRI) have developed a programme to support the PRSP process in Western and Central Africa. The goal of the programme is to help make the poverty reduction strategy (PRS) an effective framework for reducing rural poverty in the region. The programme will focus on the 15 countries that have passed decision point, with in-debt modelling work carried out in Burkina Faso, Cameroon, Ghana and Senegal.

Our ambition is to set up a tracking and reporting system to monitor implementation of the PRSP process as it relates to rural poverty. IFPRI will collect PRS-related data in the region and produce annual reports analysing poverty trends and the implementation of poverty reduction strategies. By the end of next year, we are planning to produce thematic reports, the results of the tracking and reporting system and the reviews of the PRSPs. An exchange network will support capacity-building of stakeholders involved in the implementation of the PRSPs and dissemination of PRS-related information in the region.

The three-year programme should bring us a full range of tools and guidelines for monitoring and evaluating PRS processes, outcomes and impacts as related to rural poverty. These instruments will help governments and members of the donor community reflect on how best to tackle rural poverty, adjust their development programmes to PRS processes and policy and institutional reforms, and ensure stronger in-country partnerships in the whole process.

Mohamed Béavogui

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IFAD’s new Strategic Framework 2007-2010: six objectives to enable poor rural people to overcome poverty

Strategic Framework 2007-2010Today governments, civil society and international organizations are all mobilized to meet the Millennium Development Goals by 2015. Everywhere, countries are setting up poverty reduction strategies to work in favour of the first of those goals: eradicate extreme poverty and hunger.

In December 2006 IFAD’s Executive Board adopted the organization’s new strategic framework for the period 2007-2010.  The framework charts IFAD’s new directions and new ways of working in response to the needs of some 800 million poor rural people in a rapidly changing world.

The general objective is to offer poor rural women and men in developing countries the means to improve their incomes and food security.

Specifically, IFAD will implement programmes and projects to give poor rural people better access to:

The framework provides the following principles of engagement as IFAD pursues its strategic objectives:

In this and upcoming editions, FIDAction looks in detail at the six Strategic Framework objectives and what they mean for the Western and Central Africa region.

Creating opportunities for off-farm employment and enterprise development in rural areas

Labour is an important asset of poor people, and it is often their only asset. Its full utilization and remuneration are essential for reducing poverty and hunger. But because the majority of poor rural people in developing countries are involved in farming, their income is affected both by climatic vagaries and by the volatility of agricultural prices.

When poor rural people have to look for ways of complementing or substituting for farm income, their options are limited and usually consist of selling labour to other farmers who are better off. The off-farm sector may represent a new and better source of income, especially for the most marginalized and vulnerable strata of the rural population such as rural women and youth and landless poor people.

Micro and small enterprises (MSEs) contribute to the achievement of IFAD’s strategic objective of reducing rural poverty by empowering poor people and strengthening their organizations. This increases their access to markets and to inputs for enterprise development, including financial resources, skills training and technology and raw material.

IFAD’s approach to promoting rural MSEs is based on reducing the current constraints that prevent poor rural people from investing in MSE activities. Any effort to develop sustainable MSEs in rural areas requires a proactive strategy for providing the entrepreneurial poor with access to various grass-roots-oriented business support services (both financial and non-financial, including market-related services) delivered by public or private providers. (See the Burkina Faso story.)

Business support services, including information technology, can enable poor producers to capture greater earnings for their products as they move along the value chain, and to explore new markets.

Business investments linked to processing and marketing activities are crucial for increasing the value of agricultural production. Small-scale entrepreneurial activities in rural areas may also contribute to improving rural livelihoods by facilitating household access to basic social and non-agricultural services. Such activities include input trading and marketing, transport, repair and assistance (related to electricity, private water access and agricultural equipment), and the activities of blacksmiths, brick manufacturers, small business centres, rural telephone services and small bakeries.

For more information, please contact:
Karim Hussein, regional economist, Western and Central Africa Division

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Stories from the field

Burkina Faso: new resource centres will support microenterprises in rural areas

Burkina FasoThe Rural Microenterprise Support Project (PAMER) is the first IFAD project in Burkina Faso dealing exclusively with the off-farm sector. The overall goal of this seven-year, IFAD-initiated project is to diversify and increase rural incomes by launching a sustainable process of microenterprise development. Although external donors and NGOs have offered rural microentrepreneurs technical and financial support on a selective basis, no consolidated attempt has been made until now to assist this increasingly important subsector, particularly in rural areas.

Over the past five years, PAMER has promoted more than 1,700 rural microenterprises, many of them belonging to women and young entrepreneurs. Nearly 3,000 jobs have been created or consolidated in new or already active microenterprises. And most of the new activities are successful.

An internal review conducted by PAMER showed that in the Western region 95 newly created microenterprises were making an average profit of more than 37,000 CFA francs (US$77) per month. The reinforced or consolidated microenterprises involved in PAMER were even more profitable. In the Centre East region, average yearly income from microenterprises has been as high as 784,000 CFA francs (US$1,500) as early as 2003 (from a sample of 120 microenterprises generating a total of 93.4 million CFA francs (US$194,057)).

PAMER is looking at ways to make the microenterprises sustainable in the long term. After the project’s investment phase, the private sector will take over all support activities. The handover will ensure continuity without reliance on public funds.
 
Burkina FasoIn July 2006 PAMER launched five resource centres to work as consultancies for promoting and supporting microenterprises. The centres are located in the departments of Garango, Ouargaye and Pouytenga in the Centre East region and in Orodara and Duna in the Western region. The decision to set up the centres came after some of the rural microenterprises launched in the early days of PAMER had to close down because they were ill prepared to run a business activity without external support.
 
“The resource centres are designed to help people living within [a radius of] a few kilometres to create their business project from scratch,” says PAMER director Guy Raoul Sanon.

“Their proximity to and their knowledge of local markets are major assets. They will help microentrepreneurs, many of whom are illiterate, set up a simple accounting system, follow their stock and look for new markets. They will also evaluate the microenterprises every three months to monitor job creation and turnover. The resource centres also run small-scale audits to ensure that no funds are being mismanaged. They are able to intervene in businesses in all sectors, such as transformation of agricultural products, trade and car repair.”

Such is the popularity of the resource centres that they are already starting to attract clients that are not directly involved with PAMER. If the evaluation planned for the end of 2007 confirms the early success of these centres, new ones could open in 2008. There is a proven potential for these decentralized business consultancies, which are more advantageous than expensive, larger companies from the capital, Ouagadougou, that would only be involved for short periods. There are no standard fees for the services of the resource centres, but fees are negotiated on a case-by-case basis and some have been as small as 1,000 CFA francs (US$ 2.07).

“One of the objectives is to diversify the economy of the rural world,” says Sanon. “The revenues earned by non-farm businesses are much higher than those derived from farming. Over the last 40 years, Burkina Faso has not been food secure. Diversifying will relieve congestion in the agricultural sector. What is the point of having 20 family members working on one hectare of land? It is disguised unemployment — nothing else. By diversifying family revenues through sustainable, off-farm activities, we can help reduce the pressure on household economies.”

But rural development in the country is still hampered by serious infrastructure challenges such as lack of water, electricity and roads. There is limited access to credit and to services such as those required to maintain microenterprise equipment.

“Farming is not seen as a private enterprise activity in this country. That means that a big cotton farmer earning 10 million CFA francs [US$21,000] a year does not pay taxes on this income,” says Sanon. “In the meantime a microenterprise does pay taxes. That does not help diversify the economy. The tax system needs to be reformed.”

Yet agriculture could be a potential sector of intervention for the resource centres. PAMER has already established contacts with various farmers’ organizations willing to introduce a more businesslike approach into their activities.

By diversifying and increasing the incomes of rural people, PAMER is trying to slow down rural-urban migration. The exodus from rural areas is a source of concern for Burkina Faso’s authorities, as it is expected that by 2025 a third of the country’s population will be living in an urban environment.

For more information, please contact:
Norman Messer, country programme manager, Burkina Faso
Guy Raoul Sanon, project director, PAMER

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Senegal: better water management changes women’s lives 

SenegalLike most of Senegal’s so-called Groundnut Basin, the area around  Diourbel and Bambey departments has suffered over the past few decades from decreasing and erratic annual rainfall, declining tree cover and progressive soil erosion, as well as from the fall in demand for, and the price of, peanut oil on the world market. Two successive phases of the IFAD-initiated Agroforestry Project to Combat Desertification there have helped improve fertility, access to water and regeneration of tree cover.

In support of the government’s policy of combating desertification, the project’s US$13.9 million second phase, which ended in March 2007, focused on protecting the environment and improving the working and living conditions of women. It was partly financed (with an investment of US$2.0 million) by the West African Development Bank.

In an area with a harsh climate, the reforestation programme, which covered more than 2,000 hectares and was supported by the project over the past six years, has contributed to the improvement of farmland fertility. Water is more easily available and can be better managed as a result of the building of ponds and dams, and agricultural productivity has increased dramatically. Some 55 hectares of market gardens are being exploited, and part of their production is made available on neighbouring markets. Generally, living conditions have improved for some 80,000 people in Diourbel and Bambey.

“You can see it from the way we look. We have a better life because we eat better,” says Modou Kamara, technical adviser in the neighbouring Keur Ousmane Kane village. Farmers cultivate tomatoes, cabbages, eggplants, carrots and onions, and mango and lemon trees, on 10 hectares of farmland that have been developed around a borehole in the village. All of the produce ends up in the family’s cooking pot at dinner time.

“We eat better and we sell better. With what we sell, we can afford to buy cattle. If only we had fish, I could tell you that we have a better life than in the capital Dakar.” And Modou laughs, “In fact, that is already the case!”

The building of 24 wells and 44 drinking fountains, in particular, has made a considerable difference in life in the villages. It changed women’s lives, because carrying water is traditionally their duty. Young women do not have to spend hours by the well anymore and they have time to attend literacy classes.

“The project changed our mentality and opened our minds,” says 46-year-old Maguette Diop. “Thanks to the project we have learned how to read and write, and we have drinking water, better homes, the shop, the borehole.”

The new situation also satisfies men. “Now women have more time to look after the house and they even earn some money in non-farming activities,” says Ndiougassa Ndjol. He adds ironically, “Women are almost becoming middle-class, they can afford to sleep peacefully until 6:00 in the morning before they have to go to fetch water from the public drinking fountain.”

With the reduction of poverty levels, and with literacy programmes helping women assert their position in the community, the social cohesion of villages in the area has improved.

To enhance sustainability, the upcoming value chain support project in the Groundnut Basin (Soutien à l’accès au marché dans le Bassin Arachidier – SAAMBA) will be implemented in the same project area in order to capitalize on the investments and lessons learned from the Agroforestry Project to Combat Desertification.

For more information, please contact:
Sylvie Marzin, country programme manager, and Mamadou Kane, field presence officer, Senegal
Moumar Gueye, project coordinator, Agroforestry Project to Combat Desertification (PAGF II)

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Niger: an innovative evaluation process allows project participants to set effective targets

NigerThe ongoing Project for the Promotion of Local Initiative for Development in Aguié (PPILDA) has introduced a simple but highly effective new means of targeting poor rural people and of monitoring and evaluating the impact of development activities.

“Past projects in the country have shown us repeatedly that we do not have the tools to properly know and assess the impact of operations carried out,” says Hubert Boirard, IFAD country programme manager for Niger. “We can set up cereal banks and seed multiplication facilities and provide training and the like, but we have no way of knowing whether these interventions have had a real impact on the lives of villagers – either at the close of the project, or ten years on.”

When there is no intimate knowledge of the target population and of the specific character of poverty in the locality, there is little basis for providing effective interventions.

“Without effective tools, we were working in the dark. The question of who we are reaching and whether activities really work is fundamental to our interventions,” says Boirard.

One of the main features of the new approach is that the local population is fully involved from the start in the process of guiding and managing project activities. The PPILDA set out to train local people grouped in committees to carry out a detailed census of all villagers and their assets. It asked villagers to develop their own definitions and categorizations of poverty.

“We were surprised, for example, to learn that those in the most disadvantaged category, the extremely poor, made up only 1 per cent of the village population,” says Chaibou Guéro, the PPILDA technical director. “We had imagined they would be more numerous. This kind of information is crucial in guiding our interventions.” 

NigerCommittees meet regularly every 15 days to update the records by documenting the participation of each individual in project activities. The information gathered is entered into large registers that list, among other things, the names of villagers, their status, the composition of their households, the amount of land they cultivate, the livestock they own, and how they rank themselves in terms of poverty.

The result is an exhaustive record of all the inhabitants of 22 villages in the Maradi region in southern Niger, a total of 27,000 people. This wealth of information can be cross-referenced in useful ways. It is now possible to pinpoint the real benefits of development activities, individual by individual, poverty group by poverty group, village by village, and intervention by intervention. Development activities can then be adjusted or targeted accordingly.

At the same time, the villagers are able to see and understand for themselves the benefits of keeping accurate records. This helps generate a sense of social responsibility and citizenship. The approach also helps build local capacity and creates employment within the villages, particularly for young people who have a school education. This enables more people to stay in the villages instead of leaving to seek work elsewhere.

The PPILDA intends to expand its activities to 78 additional villages while continuing to refine and improve upon the new tools. Eventually it could cover the whole Maradi region, and IFAD is concentrating its development investments in Niger in that region. In a future phase the project plans to train village committee members to input the data into computers.

This innovation in monitoring and evaluation helps promote relevance, effectiveness and efficiency in IFAD-financed development interventions. It is hoped that these new tools will be replicated elsewhere in Africa and even further afield.

For more information, please contact:
Hubert Boirard, country programme manager, Niger
Chaibou Guéro, project technical coordinator, PPILDA

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News and events

Ghana: participants in a study tour learn about rural finance

GhanaThe IFAD-supported Rural Financial Services (RFS) Project and the World Bank co-organized a Rural Finance Study Tour in Ghana from 25 to 31 March. Some 25 participants came from various countries, including Bangladesh, Egypt, India, Jordan, Nigeria, Sudan and Sri Lanka.

During two days of field visits, participants visited a number of rural and community banks in the Ashanti, Western and Central regions of Ghana. The size of the banks varies considerably: some have only basic infrastructure and few staff members while others are computerized agencies that employ staff of 100 or more. But what all the banks have in common is a demonstrated profitability. They are also able to allocate a portion of their profits for social investments in their communities.

Most of the bank managers attributed the improvement of their operations to services provided to their banks by the ARB (Association of Rural Banks) Apex Bank. The ARB Apex Bank is a ‘mini central bank’ that provides banking and non-banking services to rural and community banks to enhance monitoring, supervision and control of their operations. The managers cited two services as being particularly important to their operations: the cheque clearing service and the Apex Link Funds Transfer System that facilitates money transfers between banks.

Despite the benefits of the Apex Bank’s services, various finance specialists in the country have underscored their concerns about the bank’s sustainability. In this regard, the RFS project conducted a study that found that the performance of rural and community banks, the type and quality of services provided by the Apex Bank and the viable pricing of services without subsidies are all essential aspects of the ARB Apex Bank’s sustainability.

Participants in the study tour learned that rural and community banks have taken a dynamic approach towards expanding their lending and microfinance operations, increasing both their profitability and the services provided to the community. A number of the banks are also developing saving and banking services based on the traditional ‘susu collector’ model to improve rural people’s access to microfinance.

Susu collectors are among the oldest groups of financial operators in Africa. For a small fee they provide Ghanaians with an informal means to save securely and have access to their own money, and to gain limited access to credit. Not only the rural and community banks but also Barclays Bank, one of the most solidly established commercial banks in the country, are embarking on a similar operation. To try to put the sector in order, a Ghana Cooperative  Susu Collectors Association has been formed, and it includes 1,100 of the about 4,500 collectors operating in the country.

The study tour participants also learned about the Microfinance and Small Loans Scheme established by the Government of Ghana. The Government has mobilized a fund of US$50.0 million to be used mainly for direct credit lines to microfinance institutions. The scheme provides funding to boost the microfinance sector. It will help improve rural competitiveness and productivity, which are at the forefront of the government's poverty reduction strategy.

For more information, please contact:
Ulac Demirag, country programme manager

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Sierra Leone: the first country in the region to benefit from IFAD’s debt sustainability framework

Meeting at IFAD’s headquarters in Rome on 17-18 April, the Executive Board approved a new debt sustainability framework for immediate implementation. The framework has the aim of reducing the impact of unsustainable debt on poor countries that are at the highest risk of debt distress. Under the new model, countries deemed least able to sustain debt will receive 100 per cent grant assistance from IFAD, while those with medium debt sustainability will receive 50 per cent grant assistance and 50 per cent loan assistance.

As part of the framework, the Board approved a US$9.9 million grant for Sierra Leone. The Rural Finance and Community Improvement Programme will develop rural financial services in seven districts of the country. More than 34,000 households will benefit from better access to credit and loan facilities and increased opportunities for employment in small-scale businesses. The programme will target small farmers and microentrepreneurs, especially women.

The Board also approved a new knowledge management strategy for IFAD. “The new strategy will shape the way in which IFAD learns from its own projects and programmes and particularly from poor rural people,” said Matthew Wyatt, IFAD’s Assistant President, External Affairs. “It will provide IFAD with the framework and tools needed to be effective at a time when dramatic transformations are changing the face of world agriculture and of rural poverty.”

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New appointment

IFAD’s Western and Central Africa Division congratulates Ms Fatou Gaye Sarr, former Coordinator of the Village Organization and Management Project – Phase II, for her recent appointment as Deputy Minister of Rural Development and Agriculture of Senegal.

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