Project rationale and relevance

This Note relates to KSF1: Country relevance, commitment and partnerships
Version: January 2008

Core issues

Investments in pro-poor rural development may be financed on the basis of detailed initial designs or outline proposals to be developed later. But whether investment decisions are made earlier or later, the decision makers are under the same pressures to ensure that the investment is relevant, justified, implementable and generates sustainable livelihood gains for the target group. It is thus necessary to take account of the following issues:

The need for investment proposals to be convergent with government poverty reduction and agricultural sector development plans: Poverty Reduction Strategy Papers (PRSPs); System-Wide Approaches (SWAPs); evidence of whether the government is committed to the proposed IFAD investment; reasons why IFAD is the appropriate choice of financing agency, in terms of its development mandate and comparative advantage.
The forces to which the poor are vulnerable; the consequences of these vulnerabilities and the processes and mechanisms that deepen poverty, or aid escape from it; the livelihood strategies and coping mechanisms that poor people adopt. Constraints, opportunities and priorities for improvement of rural livelihoods as perceived by poor people themselves and other informants in their communities (local schoolteachers, doctors, etc.).
Precedents for, or examples of, poverty alleviation in circumstances similar to those of the proposed project; lessons learned and what has worked or not worked in the experience of IFAD and others; potentials for replication or innovation in design.

Based on the above, it is necessary to adopt:

An approach to poverty alleviation and entry points for change that builds on the strengths of the poor and brings improvements to their livelihood strategies and abilities to cope. The expected impacts on poverty need to be evident and attainable at tolerable levels of risk despite agro-ecological, socio-economic, policy or other constraints.
Various implementing partners able to execute plans effectively, based on evidence of their capacities or potentials. Institutional strengthening and external support may need to be provided to help them to carry out their allotted tasks.
Measures built into the project design that will ensure flexibility in the face of changing circumstances, and the sustainability of project-funded activities and services after the end of loan disbursement.

Key tasks for design and review

Demonstrate why an IFAD project is needed and how it would make a difference, given what others are doing and/or expected socio-economic and policy trends. Evaluate the borrower country’s need for, and willingness to take on, an IFAD loan.
Through rural diagnosis, stakeholder consultation, data searches etc., gain a clear understanding of potential target group identities, locations, rural livelihood strategies, constraints, opportunities, needs, coping mechanisms, priorities and the dynamics of their poverty.
Note and exploit precedents and lessons learned from past poverty reduction efforts. Assess their replicability.
Brainstorm with stakeholders and potential beneficiaries the development concepts, investment approaches or project designs that, taking account of the above points, may overcome important constraints. Consider alternative or more innovative options carefully before any are discarded.
From this dialogue and participation, outline a development proposal, implementation plan and financing needs that are rational and relevant to the intended beneficiaries.
Identify social, economic, legal or policy constraints that, if unresolved, could impede implementation or prevent support of the type proposed reaching the target group; suggest solutions, indicating how, by whom and by when they would be achieved.
Favour design approaches that build on the strengths of the poor instead of only remedying their weaknesses. Design to cater for future trends in the socio-economic and poverty situation that are likely to affect project impact and the interest of the target group (e.g. the changing role of agriculture in response to increasing urban migration; long-term environmental or climate change).
Show how the proposals would make the poor less vulnerable.
Build into designs and implementation arrangements sufficient flexibility to adapt to evolving or unexpected trends and events or emerging implementation experience, and the means for longer-term fiscal sustainability.