1. In the last few years, reflection and action to improve project impact have gained increasing momentum. Improvements in monitoring the performance of the portfolio have been supported by important changes to advance its quality, starting with the entry of projects into the pipeline. Impact– on beneficiaries and institutions – constituted the main theme of the Programme Management Department (PD) portfolio review process in 2001. Various methodologies and key impact indicators were and are being examined to establish a linkage with the Millennium Development Goals (MDGs).

2. Implementation of a technical assistance grant (TAG) for the Programme to Promote Impact Orientation during Project Cycle Management facilitated the extension to the field in 2001 of training in the logical framework (logframe) technique. In addition to TAG resources, several countries used their own resources to launch in-country workshops for the training of project staff and key staff of implementing agencies in the use of the logframe. In-country workshops were also used to review the existing logframe of a project to improve its functionality as an impact-oriented management tool and as a base for implementation planning.

3. Logframe training activities were further supported by impact-oriented monitoring and evaluation (M&E) systems in new projects and by strengthening the M&E units of ongoing projects. In response to PD’s request, the Office of Evaluation and Studies (OE) developed and finalized the draft of Managing for Impact in Rural Development – A Guide for Project M&E for implementation in 2002. Regional and subregional workshops held in China, Madagascar and Rwanda focused intensively on project impact and the tools for its measurement. In 2000 and 2001 the Asia and the Pacific Division (Asia) pilot tested several participatory impact assessment/monitoring (PIA/PIM) methodologies in projects in Bangladesh, China, India, Indonesia and Viet Nam.

4. At the end of 2001, IFAD’s current project portfolio stood at 241 projects for a total value of USD3.29 billion. Sub-Saharan African countries are still the largest recipient of IFAD assistance. Regional divisions continue their efforts to maintain a stable portfolio size and this year both the number of projects approved and the number completed amounted to 25. During 2001, total disbursement amounted to SDR236.5million. This is the highest amount ever disbursed in a single year and has continued the trend shown in the previous three high-performing years.

5. The share of underperforming projects in the total portfolio remains at the same level as in previous years (25%). Political unrest and civil disturbance are reported by most regional divisions as external factors affecting project performance. The aftermath of persistent drought is another factor affecting some projects, particularly in the Near East and North Africa (NENA) and Asia regions. The influence of certain exogenous factors aside, weak project management can give rise to a host of other project implementation problems across all geographic regions. Generally, in the two Africa regions weak institutional and public-service capacity is more pronounced than in other regions. Other cross-cutting issues affecting the entire portfolio can be summarized as: poor definition of management responsibility among implementing agencies, inadequate flow of funds, the incentive structure of civil service, lack and/or untimely provision of counterpart funds, complicated procurement arrangements, and late submission of audit reports. In the context of project portfolio reviews, in 2001 preparation of the “country portfolio issues sheet” began on a trial basis across the regional divisions. This instrument is intended to complement the information and analysis contained in project status reports (PSRs).

6. Project implementation problems are variously addressed on a project by project basis and through corporate actions. In addition to participating in the supervision missions of the cooperating institutions (CIs), extensive follow-up missions were conducted by IFAD staff and specialist consultants in order to provide backstopping support on technical and management problems to ongoing projects. Such involvement has been instrumental in keeping field-level project implementation closer to the spirit of project design for better achievement of qualitative impact. The key quality features of project design are subject to the constant attention of follow-up missions. Such features include participation and empowerment, a more equitable approach to gender, pro-poor institutional arrangements and policies, and on-farm and catchment area environmental issues. Nevertheless, the necessity of operating from Headquarters affects the continuity of follow-up actions.

7. Regional divisions continue to look for innovative methods to improve project performance and compensate for the lack of field presence. Foremost among them is the use of TAGs to regional and national institutions, as well as to local and international non-governmental organizations (NGOs) for capacity-building and provision of project implementation support. Use of national staff of the World Food Programme (WFP), on a cost-sharing basis, has been practiced in China and India with tangible positive results. In countries where IFAD is present with a relatively large number of projects, facilitation units have been set up and paid for by the projects themselves. Despite these measures, and because of competing demands on the time of country portfolio managers (CPMs), it is not always possible to be present at some crucial in-country meetings on institutional and policy issues.

8. The ongoing portfolio is administered by nine CIs and IFAD. The United Nations Office for Project Services (UNOPS) is responsible for 55% of the portfolio, followed by the World Bank with 13%. Over the past two years, the main theme of dialogue with CIs has been their role in monitoring and reporting on impact. However, the major concern by leading CIs is the incremental resource requirements to meet new demands without sacrificing routine supervision of regulatory aspects. All 15 projects approved for direct supervision are now effective, and the process has led to the creation and accumulation of valuable institutional memory. Better command of project design through more direct contact has enabled IFAD to be a more forceful catalyst in support of its strategic objectives.

9. Total cofinancing arrangements during 2001 amounted to USD270.3million, resulting in a cofinancing-to-loan ratio of 67%, twice that of the target for the year. Mobilizing cofinancing – building and maintaining partnership – is a highly staff-intensive task. Lack of field presence has further compounded the challenge for IFAD in the face of the decentralized decision-making structures adopted by most donor agencies. In situations in which a potential donor withdraws late during project design or fails to maintain commitment during project implementation, additional effort is required to find a new cofinancier or adjust the project design. In some regions, notably Africa, the level of partnership and cofinancing is constrained by the declining priority placed on rural development by other donors. Nonetheless, cofinancing targets are being met and surpassed through a successful drive to diversify cofinancing partners.

10. Twenty-three projects prepared project completion reports (PCRs) in 2001 based on IFAD’s new report format. These reports provide a fairly detailed and candid account of the successes and shortcomings of completed projects. In varying degrees, most projects achieved their stated development objectives of increasing income and raising production and productivity. In many cases appropriate technologies and training contributed significantly to reaching these objectives. Most of the projects emphasized beneficiary participation and the use of participatory methodologies that were crucial to project success. About half had a particular focus on gender and on improving the living conditions of women. Rural finance facilities were also instrumental in raising and diversifying incomes, although often not without problems. In addition to project- and country-specific lessons, a number of generic lessons have been drawn that confirm the current emphasis of IFAD on project design and implementation. Stakeholder participation, capacity-building and support to local organizations and institutions are key elements in successfully achieving project objectives and ensuring sustainability. A gender-balanced approach implies precise targeting of women to ensure that they are not marginalized. Flexibility, creativity and the ability to adapt to the local situation are prerequisites to improving the project design within its stated objectives. An efficient M&E system is the basis for successful project management, a focused annual programme of work and assessment of project impact

 

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