Portfolio review: 2000
1. The scope and depth of periodic reviews at the divisional, departmental and corporate levels further improved in 2000, thanks to their special focus on the requirements of the IFAD V: Plan of Action (2000-2002) (hereafter Plan of Action) during project implementation and more thorough analysis of performance trends. Training in the application of the logical framework and management-by-objective has started to pay dividends, as evidenced by the attention given by an increasing number of Project Status Reports (PSRs) to the achievement of development objectives and their linkage to the physical progress and financial performance of each project.>
2. Implementation of the Plan of Action was initiated in 2000. Its main elements were pursued by means of day-to-day project portfolio management and were followed up during periodic portfolio review meetings at the departmental and corporate levels chaired by the Assistant President, Programme Management Department (PD), and the President of the Fund, respectively. Section III of the present report describes the action taken and progress made in meeting the requirements of the Plan of Action insofar as it relates to the implementation phase of the project cycle. Since this is the first attempt of its kind, the Plan of Action’s four main building blocks, namely, impact assessment, building partnership, knowledge management and policy and institutional dimensions, have been used as a framework to present the work in progress. Discussions on some of the elements of the Plan of Action have opened up a new vista on the qualitative aspects of the project portfolio. >
3. As part of the preparatory work to follow up on the recommendations of the Plan of Action, a new format of the Project Completion Report (PCR) was devised for the purpose of capturing the outcome of completed projects well beyond the traditional treatment of the input–output relationship. The new format was used for 13 projects in 2000. As a result, a number of important lessons were learned because, for the first time, the PCRs showed exactly what the projects had achieved and areas where there had been little or no progress. Projects already rated as successful during implementation have variously recorded significant achievements in terms of environmental protection, increased production, improved household nutrition and food security, gender mainstreaming and development of community-based activities. All these findings highlight the importance of close monitoring during implementation to ensure that timely corrective measures are taken, this being one of the aims of the refined review system that IFAD introduced three years ago in close cooperation with its cooperating institutions.>
4. Despite the persistence of a number of implementation problems, which were exacerbated by widespread drought in some regions (particularly in Near East and North Africa (NENA)), the proportion of under-performing projects in the total project portfolio amounted to only 26% in 2000, compared with 25% in 1999 and 30% in 1998. The significance of this figure is that more rigour has been exercised in rating individual projects’ performance since 1998, when PD adopted the new format. Cross-cutting issues that affect project implementation include: weak project management performance and institutional capacity; unsatisfactory functioning of monitoring and evaluation (M&E) units, particularly in terms of measuring project impact, and the adequacy and timeliness of counterpart funds; and widespread drought, civil unrest and loan suspension as a result of unsettled arrears.>
5. PD regional divisions have employed a variety of proactive and reactive measures for dealing with country- and project-specific implementation problems. Project start-up workshops increasingly use the logical framework technique as a participatory means of fine-tuning project design and delineating the roles and responsibilities of project implementers. These workshops, as well as regional or country implementation workshops, are used as fora for training in loan administration and financial management. The use of Special Operations Facility (SOF) grants has proved to be crucial, both for expediting project launching (i.e. loan effectiveness) and for facilitating project implementation through training in loan administration and M&E and preparation of implementation manuals.
6. The participation of IFAD staff and consultants in supervision, follow-up and mid-term review (MTR) missions invariably aims at providing technical and management support and at streamlining project design. Joint missions for discussions on the management of arrears have been fielded with staff of the Controller’s Office (VC). Most regional divisions have linked up with regional technical assistance (TA) grants to facilitate backstopping support for their lending activities.
7. Total disbursements amounted to SDR 217.0 million in 2000, almost SDR 10.0 million more than in 1999 and only slightly less than the peak figure reached in 1998. The continuous proactive portfolio management pursued by PD regional divisions, assisted by VC and the Office of the General Counsel (OL), contributes to maintaining this trend. Total cofinancing arrangements during 2000 amounted to USD 276.0 million, surpassing the scorecard target for the year.
8. With 35 projects having been completed in 2000, the year-end current portfolio consisted of 240 projects. The number of projects completed in 2000 was the highest for any one year in the history of the Fund and reflects its continued efforts to stabilize the size of its ongoing portfolio. During the period under review, 22 loan accounts were closed and a total of SDR 40.3 million was cancelled, representing 23% of the original commitment compared with the overall average of 18%. Non-extension of poorly performing projects with outstanding loan accounts, and partial cancellation of non-performing components/activities, are tools for portfolio management across regional divisions.
9. The ongoing portfolio is administered by nine cooperating institutions and by IFAD. The United Nations Office for Project Services (UNOPS) is responsible for the supervision of 53% of the portfolio, followed by World Bank with 12%, Andean Development Corporation (CAF) with 8% and the Arab Fund for Economic and Social Development (AFESD) with 7%. Meetings were held with all cooperating institutions during the course of the year, both at headquarters and in the field. Over and above the routine matters discussed, various aspects of the Plan of Action, particularly the need for reporting on impact, featured predominantly in these meetings. Given the unchanged level of resources for carrying out supervision work, the foremost concern expressed by the main cooperating institutions regarded the new demands for the monitoring of project impact.
10. Only one of the 15 projects directly supervised by IFAD has not yet been declared effective. Effective projects are at various stages of implementation, largely corresponding to the time of their presentation to the Executive Board. One distinct feature shared by these projects relates to the preparatory work undertaken to measure their future impact. The projects directly supervised by IFAD have also helped in establishing closer implementation partnerships with governments and project management units (PMUs); they have also generated first-hand knowledge and enhanced the Fund’s institutional memory.
11. The last section of the present report is devoted to the theme selected for the year 2000, namely, environment and natural resources management. In that section, the discussion on IFAD’s evolving corporate approach is supplemented by information on regional approaches, covering a wide range of project-specific examples relating to soil conservation, watershed management, deforestation, rangeland management, desertification, biodiversity conservation, environmental health and, to a lesser extent, aquatic resources and response to emergency situations. However, the common aspects in most regions include increased beneficiary and community participation, transfer of environment-friendly technologies and promotion of environmental policies, as well as rural finance to encourage off-farm income-generating activities and microenterprises to take the pressure off natural resources. While the section recognizes successes, it also highlights shortcomings where corrective action is required.
