In an effort to further improve the quality of IFAD-financed country programmes and projects and achieve better results, IFAD has decided to increase its involvement in project supervision and further focus its implementation support.

The move was approved by IFAD’s Executive Board last December – at which time approximately 95 per cent of IFAD operations were supervised by cooperating institutions like the United Nations Office for Project Services (UNOPS). IFAD’s new policy on supervision and implementation support will allow IFAD to more effectively support developing countries in their efforts to eradicate rural poverty and improve performance.

The policy defines the term “supervision” as the administration and disbursement of loans and grants, ensuring compliance with loan covenants, procurement agreements and other contracts. “Implementation support” refers to working closely with the project’s implementers and recipients to effectively identify and solve problems as they arise. The policy notes that such support will pay “special attention to social and environmental dimensions, including improved targeting and mainstreaming of gender issues with a focus on poor women.”

Gradually taking the lead in supervision and further supporting the activities it finances means that IFAD will enhance its ability to capture important knowledge, build partnerships, provide innovative and improve impact. The new policy rests on a number of principles, the most important being “that implementation is the responsibility of the project recipients,” says Ides de Willebois, Director of IFAD’s East and Southern Africa Division and author of the policy. “With this policy, IFAD is highlighting the fact that loan and grant recipients are key partners with shared accountability for project outcomes.”

The growing emphasis to support nationally owned poverty reduction strategies, as set forth in the 2005 Paris Declaration on Aid Effectiveness and other recent international agreements, was an impetus for the change, says de Willebois. In addition, studies have shown that direct supervision and implementation support are particularly effective in addressing specific constraints, such as weak national institutions.

The agreement that established IFAD in 1977 stipulated that the organization would delegate the role of supervision to international cooperating institutions. In 1997, an amendment to this agreement was adopted by IFAD’s Governing Council, allowing IFAD to directly supervise up to 15 pilot projects.

Evaluations and analyses of the supervision pilot initiative highlighted the limitations of relying on a cooperating institution to conduct supervision.

“Cooperating institutions tend to have standardized arrangements for all programmes and countries, which do not fully reflect the range of supervision requirements or the unique needs of a particular country,” says de Willebois. “Moreover, these arrangements do not bear in mind the strategic imperatives of IFAD.”  

The type of supervision employed for IFAD-financed projects will now depend on the size of the particular IFAD country programme, the funding arrangements and a country’s implementation capacity.

Over the next three years, IFAD will focus on building the capacity of its staff to conduct top-notch supervision.

“We plan to gradually reduce our reliance on cooperating institutions for supervision,” says de Willebois. “Within the next two to three years, we expect that most IFAD-initiated loans and grants will be supervised by IFAD.”