COSOP Timing and requirements

The general approach described above includes significant flexibility to accommodate the different circumstances of individual countries. The need for a differentiated approach is recognised and has already been reflected in the COSOPs developed since 2007. Related lessons are reflected in relevant sections of Volume 2 (COSOP Source Book).

An increasing number of countries are now designing and implementing sector-wide approaches (SWAps) for rural sectors such as agriculture. A COSOP will be required for countries where IFAD’s programme involves participation in a SWAp or other joint approaches with other donors including the government led agricultural investment plans under the CAADP in an increasing number of Sub-Saharan African Countries. While these sector investment plans provide a framework for translating the Growth and Poverty Reduction or National Development Strategies at sector level and facilitate the donor harmonisation process, they do not substitute for COSOPs as an instrument of accountability not only vis-à-vis Government and partners but also vis-à-vis IFAD own governance (Board) as well as an investment planning tool for IFAD staff and managers. It captures the respective contribution of various investment projects and policy and knowledge management agenda as a building block towards IFAD institutional and policy objectives at country level.

In SWAp or similar situations, reference will be made to the IFAD SWAp policy paper. Formulating a COSOP for a country where a SWAp or other joint donor assistance strategy is under consideration may well require IFAD to participate in much more lengthy and detailed consultations with other donors and with the government, and so may require a longer period and more resources than a standard COSOP. It may also require IFAD to follow a format for a joint donor strategy that differs from the usual COSOP format. In such situations, emerging experience indicates that donors are often still preparing their own country strategy documents, and that these documents are being annexed to a unifying joint country strategy document.

In post-conflict countries and fragile states, the COSOP may be adapted to reflect suggestions from the IFAD Policy on Crisis Prevention and Recovery. In particular, a shorter period may be covered by a “transitional COSOP” (e.g. three years instead of the usual five) to take account of a country’s uncertain situation and the fact that needs may rapidly change when peace is fully established. For such a transitional COSOP (or revision of an earlier COSOP), it may not be possible to carry out very much in the way of consultations or poverty analysis, and there may be little economic data available as country background information. In these cases, emphasis will instead need to be placed on crisis risk and vulnerability assessment.

It was agreed on occasion of consultations for IFAD VII replenishment, that its approach to fragile state should be characterized by the following¹:

• A flexible approach to programme and project design, with a strong focus on building the capacity of community and government institutions.
• More focus on the key issues of vulnerability and resilience, economic empowerment, gender, indigenous peoples, food security, land rights and natural resource management, and particular targeting of vulnerable population groups including displaced female-headed households, indigenous peoples and soldiers requiring reintegration.
• Greater simplicity in project objectives and activities, to take account of the limited capacity of many fragile states to manage and implement development projects.
• Attention to mitigating, and responding to, risks of natural disaster and conflict – particularly local conflicts, e.g. over access to natural resources.
• Expanded knowledge-sharing, including working with partners able to address a broader range of the causes of fragility than IFAD alone is able to do.
• Co-financing, wherever possible through harmonized procedures, in order to avoid increasing transaction costs to governments.
• Strengthened capacity for analysis to underpin programme and project design and implementation, including through expanded IFAD country presence and direct supervision.
• Particular attention to the management of risk associated with engagement in fragile states, including security of the workforce.

Sometimes, neighbouring countries have a strong shared development agenda (for example, the islands of the Pacific or the Caribbean, or specific country groupings in Central America or sub-Saharan Africa). In such situations, it may be appropriate to prepare a sub-regional strategic opportunities programme (SRESOP), as was done recently for some Pacific island States and Central Asia. Development challenges that may justify such a regional approach include shared external constraints and opportunities (e.g. trade arrangements such as free trade areas) or shared geopolitical, social and economic characteristics (e.g. the countries of the Southern Common Market [MERCOSUR]). SRESOPs would be prepared on an ad hoc basis, as dictated by circumstances. To the extent possible, they would be planned and conducted in the same way as COSOPs. SRESOPs will focus largely on strategic, policy and operational issues of relevance to a region or subregion, including prospects for financing operations. SRESOPs will take into account the strategies and activities of all other relevant stakeholders, i.e. national governments, regional institutions, IFIs and regional civil society organizations.

Between 2007 and 2010, IFAD has developed and submitted to Board review 38 RBCOSOPs with significant differences in the regional distribution ranging from 11 in WCA, 9 in LAC, 7 in NEN, to 6 in ESA, and 5 in APR; by type of countries including MICs, LDCs, LICUS/fragile states; by number of projects ranging from one to 5; by size of portfolio ranging from less than USD 10 million to way over USD 100 million; and by pattern of financing plans, including exclusive IFAD financing or integration into sector programmes. After a record of 15 RB-COSOPs in 2007, the number was reduced to 8 in 2008, 9 in 2009 and 6 in 2010. This reflects a number of factors, including: slippages in the original COSOP formulation plans due to delays in portfolio evaluations, a minimum PBAS allocation as a result of which no COSOP is required a per the 2006 guidelines, and competing demands on CPMs time due to exigencies of enhanced country programme including direct supervision and new pipeline development.

By the end of the current PBAS cycle i.e. 2012, it is anticipated that a total of 55 full RB-COSOPs will have been submitted for Board review. This is based on an ongoing analysis of various parameters including the number of projects in the current portfolio, the corresponding amount of financing, the projected PBAS allocation and the prospective additional number of operations. . This number would rise to 60 including SRESOPs covering more than one countries or transitional COSOPs in.

The 2006 Guidelines and related Board Document have clearly stipulated that countries with a minimal PBAS allocation or countries where a small country programme is envisaged will not require a COSOP. Instead, the information that would be normally included in a COSOP will be incorporated into the relevant sections of any design document that is drafted (paragraph 27- EB 2006/88/R.4). While the countries with minimum PBAS allocation are clearly identifiable, past experience has show that the notion of “small country programme” has been subject to different interpretations over time and across IFAD divisions. Consequently, in order to remove the ambiguity in the interpretation of the 2006 Board decision, and taking into account lessons from the COSOP process since 2007, a general rule will be that in all countries with three or more projects in a given PBAS cycle a full fledged COSOP is normally required. This rule leaves, however, some room for manoeuvre, for instance in the transitional cases where the number of operations reaches or exceeds three while the country PBAS is relatively modest e.g. below USD 15 million. On the other hand, countries with only two operations in the pipeline but with a significant PBAS allocation e.g. of USD 20 million and above, will require a COSOP as a living framework document for overall country engagement.

In cases where the whole country programme is reduced to only one project during a given PBAS cycle, a COSOP will not be required, with the understanding that –as already decided by the Board in 2006- the information that would normally be provided in a COSOP will be incorporated into the relevant sections of the project design document that is drafted, including a clear description of building blocks of a country programme as normally captured in a COSOP-type results management framework, and an adequate discussion of issues on innovation, scaling up, knowledge management, partnerships and policy dialogue. In light of experiences with singleproject countries, further guidance will be provided regarding minimum quality standards².

In transition situations –e.g. between the end of a current COSOP and the approval of a new one- the concerned CPMs will have to exercise judgment and make a case for management consideration, in terms of priority setting and sequencing the design of new projects and the formulation of a new COSOP. In terms of efficiency gains, there is much room for improvements in the sequencing and synergies between country programme related activities (including rural sector assessment, supervision, knowledge management, policy dialogue), sometimes carried out as a set of discrete activities.

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1/ The approach will also take into account the OECD-DAC “Principles for Good International Engagement in Fragile States and Situations

2/ Pending completion of a more detailed trend analysis and in the context of a significant increase of resources under the latest replenishment cycle, combined with large supplementary financing from other sources in the wake of the recent food crisis, the observable increase in the number of singleproject countries may result from a number of factors. These include: efforts to achieve administrative and financial efficiency gains at IFAD level through a cap in the number of total projects combined with increased amounts of financing , which means increased loan sizes for new stand alone projects or sector programmes, and reduction in the number of the of projects due loan closures combined with increased loan sizes.