Portfolio review: 2003
The year 2003 was marked by new initiatives to improve the quality of the portfolio and the impact of IFAD's activities in general. Efforts were enhanced to provide implementation support focused on capacity-building, networking and results-oriented management. A pilot programme was developed to strengthen field presence and in-country capacity with a view to reinforcing project impact and facilitating policy dialogue, partnership-building and knowledge-sharing. A Gender Plan of Action was launched as a framework for region-specific gender strategies and an instrument for mainstreaming gender issues in all aspects of IFAD's work. The present document, based on the internal portfolio review process, analyses the evolution of the portfolio during the year under review and reports on the various measures taken to strengthen its performance and impact.
IFAD-wide portfolio reviews are carried out with the full recognition that governments are the owners of loan resources and accountable for their effective application to achieve the agreed objectives. Through its cooperating institutions, IFAD exercises due diligence in fiduciary aspects and provides support on technical issues, institutional capacity-building, knowledge-sharing and policy dialogue to promote a conducive environment for rural poverty reduction strategies. Such activities have resulted in an overall improvement in the health of the project portfolio - the share of underperforming projects was reduced from 25% in 2001-2002 to 21% in 2003.
By approving 25 projects for a total lending volume of USD 404 million, IFAD has been able to maintain the annual flow of resources despite resource constraints. Sub-Saharan Africa continued to be the largest recipient of IFAD's assistance both in terms of the number of projects and lending amount. In 2003, the number of current projects in the portfolio reached 234. The average extension period for closed projects was 29%, which is slightly higher than the 25% average for the previous three years but considerably lower than the historical average of 38%. The project pre-implementation phase averaged 14.6 months from 2000-2002. Its increase to 16.4 months in 2003 was due to prolonged delays in obtaining agreement on the conditions for effectiveness of eight loans.
The level of cofinancing in 2003 amounted to USD 124 million including two cofinancing arrangements with the Global Environment Facility of USD 6.8 million. This is equivalent to 31% of the level of IFAD financing in that year. Partnership-building, however, went well beyond cofinancing arrangements and included activities such as participation in poverty reduction strategy papers (PRSPs), collaboration with bilateral donors, particularly through the use of supplementary funds for programmatic approaches (e.g. gender-related programmes), and carrying out thematic
Some of the ongoing project implementation issues persisted in 2003. These include coordination among implementing partners, performance of the Monitoring and Evaluation (M&E) system, complicated procurement procedures, and timely submission and quality of annual project audit reports. Due to the dynamic nature of the implementation process, projects move along the performance scale, dealing with varying management issues from year to year. In the majority of instances they responded positively to the increased implementation support provided by IFAD and recommendations of supervision missions, leading to an improvement in performance.
By directing some technical assistance grants (TAGs) towards implementation support and result-oriented management, regional divisions have strengthened the performance of the project portfolio. Activities supported by regional TAGs include training of project staff in management and associated disciplines, M&E, knowledge-sharing and networking. Initiatives supported by TAG resources are often reinforced by resources from supplementary funds provided by bilateral donors. Moreover, joint missions have been launched, involving the Programme Management Department, the Loan Administration Unit of the Office of the Controller (FC) and staff of the Office of the General Counsel, to resolve financial and procurement matters including project audit. Countries a affected by loan suspension because of arrears, have also benefited from these missions by developing repayment schedules for the arrears.
IFAD's efforts to introduce result-based management for IFAD-assisted projects over the past several years seem to have started to pay dividends. This is evident from the Project Completion Reports (PCRs) prepared during the year under review. Without exception, all PCRs have provided a candid assessment of achievements and shortcomings. While the M&E system cannot yet fully measure impact, physical achievements recorded by the M&E units, combined with findings of special studies commissioned by some completed projects, offer evidence of actual or potential impact of the completed projects. The most encouraging message from PCRs is a greater awareness of sustainability issues upon completion of IFAD financing, although sustainability seems to have been interpreted in various ways by different project implementers.
At the end of 2003, the ongoing portfolio was supervised by nine cooperating institutions and IFAD. The United Nations Office for Project Services (UNOPS) continues to be responsible for the largest number of projects (57%), followed by the World Bank (12%). While IFAD supervises 7% of its projects, the loan administration of these projects is assigned to UNOPS. Both Country Portfolio Managers (CPMs) responsible for direct supervision and project managers having their projects directly supervised by IFAD, have confirmed that this mode of supervision is their preferred option since it facilitates direct contact among key actors in project execution. The Office of Evaluation (OE) will conduct a mid-term evaluation of the direct supervision pilot programme in 2004.
