Enhancing quality is clearly central to IFAD’s ambitions in and around its contribution to ending poverty and achieving zero hunger. This means we must continue to adapt and improve the way we tailor our work to addressing the challenges rural communities are facing.

Improved quality means greater impact. Essential for achieving impact on the ground are three elements: strong country ownership, sound project management and sufficient flexibility to make design adjustments during a project. These and other elements were emphasized in the context of an intense corporate focus in 2019 on design quality. Consequently, IFAD further strengthened its quality assurance apparatus to improve the quality “at entry” – that is, before approval by the Executive Board – of its country strategies, loan-funded projects and grant-financed activities.

We have also streamlined our design and review processes, ensuring that any lessons learned are widely disseminated to inform future designs. In addition, IFAD’s final ratings methodology was made more consistent, enabling the Fund to guarantee accountability, identify systemic issues, and allow comparison between quality at entry and during implementation.

Focusing on improving quality
As part of IFAD’s push to streamline its processes and improve the quality of its operations, IFAD Management committed the Fund to “front-loading” project approval in the first year of IFAD11. That made 2019 a bumper year in terms of the quantity of projects being designed and destined for Executive Board approval, with 42 loans and 13 proposals for additional financing passing through the quality assurance review process.

The year 2019 was one of record approvals (US$1.67 billion) for IFAD. At the same time, we also fully rolled out the recalibrated project design process. In all, 54 projects went through the new process, which adopts a risk-based approach to determine the appropriate review and approval process. Of the 54 projects approved, 13 were considered “track 1” projects, requiring high corporate attention and presenting higher risks.

A comprehensive analysis of ratings revealed that the projects approved in 2019 had the highest average rating for overall quality of design since 2013. Areas of strength in design included alignment with IFAD and government policies, mobilization of cofinancing, assimilation of lessons from the past, and analysis of project context.

Likewise, the grant programme was also sizeable, with 53 concept notes for grants being presented for internal approval throughout the year. By the end of 2019, global/regional grants for a total value of US$25.3 million had been approved. In addition, loan-component grants worth US$14.2 million had been agreed as part of investment projects. In 2019, we conducted an overall assessment of projects funded under the regular grants programme, to identify opportunities, challenges and lessons learned to strengthen the effectiveness and efficiency of the programme. This assessment will also provide the foundations for the preparation of a revised corporate regular grants policy for consideration by the Board in 2020.

Enhancing country strategies
A large number of country strategic opportunities programmes (COSOPs) came up for review in 2019. The 16 strategies were the first batch to be reviewed under the new guidelines approved by the Board in December 2018. The new guidelines prioritize: tailoring COSOPs to a country’s particular context; consulting and involving partner governments; and ensuring that IFAD’s internal processes are efficient, focused and cost-effective. The new COSOPs, based upon a more robust analytical and strategic underpinning, are already showing marked improvements, in particular in enhancing clarity, focus and relevance. Additionally, supporting the strengthening of results frameworks, improved alignment with relevant SDGs, government policies and strategies, as well as alignment with IFAD’s own corporate strategies, have also been identified as benefits from the revised guidelines.

Building knowledge and sharing lessons In 2019 
IFAD’s Quality Assurance Group (QAG) used its unique vantage point to generate lessons and suggest good practices for IFAD operations and country strategies. QAG became more proactive in sharing such lessons and driving conversations about quality. In the second part of the year, QAG organized three learning events (including a QAG Learning Series event on COSOP design quality) and launched the QAG VIEW – a tri-annual insights pamphlet based on lessons taken from quality-at-entry design reviews. QAG staff participated in regional divisional workshops in Brazil, the Republic of Korea and Turkey – holding sessions on quality at entry, and QAG’s reviews and role. The aim was to bring QAG’s viewpoint to bear on improving the quality of project, grant and strategy design, strengthening knowledge dissemination, and providing guidance and clarity on QAG’s methodology and procedures.

As stated in its Strategic Framework 2016-2025, the overarching goal for IFAD is to invest in rural people to enable them to overcome poverty and achieve food security through remunerative, sustainable and resilient livelihoods. IFAD pursues this goal through three closely interlinked and mutually reinforcing strategic objectives:
• Increasing poor rural people’s productive capacities
• Increasing poor rural people’s benefits from market participation
• Strengthening the environmental sustainability and climate resilience of poor rural people’s economic activities.

To hold itself accountable on progress made in achieving this goal and these three strategic objectives, IFAD has adopted a unique approach to reporting impact at the corporate level, building on rigorous project-level evaluations. This initiative is a key element of our drive to improve the quality of the Fund’s operations, and to ensure alignment with corporate strategies and with the SDGs.

The Development Effectiveness Framework, which stipulates that approximately 15 per cent of IFAD’s portfolio of projects should undergo rigorous impact assessment, provided the overall guidelines for carrying out the impact assessments.

The results of the assessments completed as part of the IFAD10 Impact Assessment Initiative were presented to the Executive Board in September 2019. The analysis showed significant impacts on the lives of project beneficiaries relative to the corporate goal of greater economic mobility and its three supporting strategic objectives. In line with these findings, the preliminary results of the corporate impact assessment show that IFAD10 has exceeded its targets for its overall goal of fostering economic mobility and for two of the three strategic objectives.

Showing how projects impact beneficiaries
Globally, beneficiaries are significantly better off as a result of IFAD-sponsored projects. Overall, the number of people benefiting – in terms of economic mobility, production, market access and resilience – is above the targets set for IFAD10.

Capturing lessons to widen and deepen the impact of future projects
The impact assessments have provided significant learning, with lessons contributing to IFAD’s drive to enhance the quality of its operations.

Linked objectives. The assessments demonstrated the benefits associated with having focused, interlinked activities and objectives are greater than those from projects with more diversified or unlinked interventions. For example, in the Guangxi region of China, where infrastructure interventions were combined with marketing activities, the impact on production was 70 per cent, against 51 per cent in comparative projects without complementary activities.

Value chain approach. To achieve the best impacts from market participation, linked and coordinated approaches need to be taken into account to address all constraints along value chains – for example in credit, market access, market information and links with consumers. This was demonstrated by projects in Bangladesh, Nepal, the Philippines, and Sao Tome and Principe.

Integrated risk management. Sustained impacts are much more likely when precautionary measures to manage the risks associated with extreme events are integrated into projects. For example, in a project in the highlands of Ethiopia, small-scale irrigation proved to be an effective risk mitigation strategy against drought, with project impacts in production and market access (51 per cent and 175 per cent, respectively) significantly higher than comparison groups.

IFAD is the only international financial institution that conducts this type of corporate-level impact assessment where the corporate impact estimation builds on the use of project-level impact assessments chosen to be representative of its portfolio. Beyond accountability, the findings from impact assessments also provide essential lessons that can inform decision-making. In addition, the impact assessments are designed in close collaboration with local stakeholders and government counterparts and this process ensures the significance of the results for the Fund. To this end, the findings have the potential to feed into improvements in the effectiveness, efficiency and overall relevance of IFAD operations for the SDGs.

In addition, IFAD’s Independent Office of Evaluation (IOE) contributes to the extraction of valuable lessons from projects and programmes. For example:
• A 2019 corporate-level evaluation on pro-poor value chains found that our project design is improving in this area and provided recommendations on partnerships, outreach to poor people and gender analysis that will support us in making further quality improvements in future operations.
• An evaluation synthesis on inclusive financial services provided lessons on transitioning to new types of financial services that will inform future designs.
• A second evaluation synthesis focused on technical innovations for rural poverty reduction, offering important insights into how partnerships can help manage the risks associated with innovations.

Also, with respect to evaluations and their role in encouraging learning and positive change, in 2019 IOE jointly launched a new prize recognizing outstanding evaluations of development interventions that promote transformational change and are linked to the SDGs. The biennial competition, “Evaluating Development Interventions for Transformational Change Award” was developed jointly by IOE, the Independent Evaluation Group of the World Bank Group and the International Development Evaluation Association. The role of learning was also a theme during IFAD’s hosting of the launch of the book Information and Communication Technologies for Development Evaluation, which examines the implications of new and emerging technologies in development evaluation and in particular the added challenges of charting progress towards the 2030 Agenda.

As IFAD addresses an increasingly complex set of global challenges and adapts its operational model to maximize contribution to the SDGs, complementary approaches are needed to support staff to further develop their skills and knowledge.

Supporting enhanced presence in the field
In order to support a fit-for-purpose reform process and increase IFAD’s in-country presence to improve responsiveness and in-country partnerships, IFAD’s Human Resources Division conducted four ad hoc reassignment exercises between January 2018 and July 2019. Each exercise had a specific scope and objectives, with a varying level of complexity related to the number of positions and staff involved. These exercises, affecting more than 35 per cent of staff, allowed IFAD to implement the necessary structural changes for its decentralized model in order to reach the target of basing 33 per cent of positions in the field. At the end of 2019, 31 per cent of fixed-term staff were field-based.

As part of the IFAD Accelerated Decentralization Plan, in 2019 the Field Support Unit (FSU) coordinated with relevant divisions the outposting and/or onboarding of 96 staff to IFAD country offices (49 international staff and 47 national staff). In 2019, FSU also coordinated the establishment of four host country agreements between IFAD and the Governments of Bangladesh, the Philippines, Saudi Arabia and South Africa to facilitate operations at the country level from a juridical point of view. To date, IFAD has a total of 37 such agreements signed. FSU further coordinated and ensured the establishment of 15 service-level agreements and/or memorandums of understanding and/or direct/indirect lease agreements with hosting agencies and/or other service providers to facilitate the running of operations at the country level.

Developing skills and capacities
Throughout 2019, initiatives were taken to support staff in developing the skills they need to adapt to the changing needs of the Fund in the context of decentralization, and for delivering results that contribute to the SDGs. These included a new leadership development programme for supervisors, an executive coaching programme for directors, professional qualification programmes such as International Coach Federation certification, and an expanded e-learning platform. In the framework of a decentralized working environment, the learning approach, in most cases, is a blend of e-learning, virtual workshops and personal interactions. Key initiatives included capacity-building for staff through participation in regional workshops and retreats, delivery of country office-focused training sessions, extensive training in travel processes and in safety and security, organization of briefings for staff relocated to the field, and coordination of security activities related to decentralization. In terms of numbers, 68 training sessions took place and more than 1,000 e-learning modules covering a wide array of topics were introduced.

Capacity development of staff is also important to ensure the success of reforms in IFAD’s financial architecture. In this context, the Accounting and Controller’s Division continues to support staff to register and complete the joint Chartered Institute of Public Finance and Accountancy-IFAD Corporate Finance Qualification Programme. As of 2019, over 30 staff had registered from 11 divisions, with seven candidates having successfully achieved the international certification and more to follow.

Ensuring an ethical working environment
Part of ensuring IFAD is able to attract and retain world-class staff is ensuring a positive and respectful work environment. In this respect, the Ethics Office promotes IFAD’s Code of Conduct and core values, provides confidential guidance to staff and managers, and reviews allegations of unethical behaviour. IFAD has given high priority to combating all forms of sexual harassment and sexual exploitation and abuse. Following the Secretary-General’s request to all United Nations bodies, the Ethics Office led an IFAD multidivisional task force to strengthen rules and procedures and to oversee full implementation of IFAD’s policy on preventing and responding to sexual harassment, exploitation and abuse. In June 2019, IFAD launched its first awareness campaign on this policy entitled “Speak up, Report, Support”. To support these efforts, the Ethics Office and Communications Division worked together to produce a video that is available on the IFAD website in all of IFAD’s official languages.

IFAD’s overarching focus – investing in rural people – means adopting a people-centred approach, providing rural women and men with the tools and opportunities they need to improve their livelihoods. This is central to SDG implementation, in particular ending poverty (SDG 1) and achieving zero hunger (SDG 2). In 2019, much progress was made in enhancing existing approaches, tools and strategies to empower rural people, while several new initiatives were launched.

Mainstreaming priority themes into IFAD’s work
IFAD has identified key themes that are central to our mission – climate change, environmental resources, gender, youth and nutrition. To continue empowering more rural people through our operations, we need to mainstream these themes throughout IFAD’s operations and we have made a variety of commitments in this respect.

In order to achieve IFAD11 mainstreaming commitments, IFAD has revised its business and planning processes and is building the necessary capacities while also developing tools and approaches for use in the design and implementation of IFAD country programmes.
For example:
• Enhanced Social, Environmental and Climate Assessment Procedures (SECAP)
• Revised targeting guidelines
• A new transformation framework
• Adaptation of the household methodologies to integrate youth, nutrition, and environment and climate change issues
• A new Rural Youth Action Plan

Results for 2019 indicate IFAD is well ahead of targets in all four priority areas. On climate, all 34 new projects approved in 2019 were screened for climate risk using the SECAP procedures, with US$568 million total investment constituting climate finance, equivalent to 34 per cent of total investment, compared with a target of 25 per cent. On youth, 82 per cent of the 34 projects at design were youth-sensitive, exceeding IFAD11 targets. For gender, 34 per cent of approved project designs were rated gender-transformative and 58 per cent of projects were rated as fully gender mainstreamed or better at completion, against targets of 25 per cent and 60 per cent, respectively. Progress has also been encouraging for nutrition – 61 per cent were validated as nutrition-sensitive, against a target of 50 per cent.

Attracting investment into rural communities
Assembling investment to develop entrepreneurial activities that benefit rural people is key to creating jobs – especially for young people – and driving growth in rural economies. With this in mind, at IFAD’s Governing Council 2019, IFAD, the European Union, the African, Caribbean and Pacific Group of States, the Alliance for a Green Revolution in Africa, and the Government of Luxembourg launched the Agri-Business Capital Fund (ABC Fund), with IFAD as sponsor.

The purpose of the ABC Fund is to boost investments in small agribusinesses across developing markets, primarily in developing, low-income and middle-income countries. The ABC Fund targets micro, small and medium-sized agribusinesses (MSMEs), cooperatives and farmers’ organizations that struggle to access the capital they need to grow their business. The investment strategy of the ABC Fund focuses on four themes:
• Integrating MSMEs and smallholder farmers into value chains
• Addressing bottlenecks in specific value chains
• Propelling technology and innovation
• Enhancing certification, traceability and value added for exports.

Another initiative to attract financing to benefit the business activities of rural people is the Smallholder and Agri-SME Finance and Investment Network (SAFIN). In 2019, SAFIN focused on mobilizing capital to strengthen the financial base of institutions serving smallholders and agri-SMEs, as well as on aligning partners’ investments through inclusive business models. Activities to support these workstreams included collecting evidence on the use of blended finance in agriculture through a study with the Organisation for Economic Co-operation and Development and other partners, identifying investment opportunities in pilot countries, and sharing knowledge and new developments related to agri-SME and smallholder finance.

In addition, we launched the IFAD Private Sector Engagement Strategy 2019-2024 with two main goals: first, to mobilize private investment in rural MSMEs and small-scale agriculture, and second, to expand markets and job opportunities for rural people. The strategy will contribute to closing the finance gap with respect to SDG 2 implementation by reaching out to private partners who can take advantage of untapped business opportunities in rural areas.

Working with and for rural people
Empowering rural people and promoting sustainable change requires working together with rural people and their organizations, listening to their perspectives and advice, and supporting their agency around decisions at the global, national and local level. IFAD continues to engage extensively with rural people’s organizations, especially farmers’ organizations – in 2019, we introduced a new programme, Farmers’ Organizations for Africa, Caribbean and Pacific. The programme will build on existing collaboration between IFAD and farmers’ organizations to extend the geographic coverage of past work, especially economic services and integration into value chains.

IFAD is also supporting the International Land Coalition, hosted at IFAD, in its important work in changing policies and modifying the way policies are implemented for the benefit of rural communities across the world. Highlights for 2019 included policy changes in Cameroon that bring greater transparency around land concession contracts, and the adoption of forest laws in Albania that support the interests of rural people.

The drive for greater efficiency has enabled us to plan an increased US$1.67 billion programme of loans and grants – crucial to widen our impact in the context of the SDGs – within a zero-growth administrative budget.

Streamlining budgeting processes
IFAD’s ongoing operational realignment is aimed at achieving excellence through greater efficiency and impact. For example, a comprehensive bottom-up approach was taken for budget preparation in support of IFAD’s shift towards a more decentralized operating environment. The Fund’s recently revised Delegation of Authority framework gives greater responsibility to lower levels of management and field officers. In addition, the Office of Strategic Budgeting successfully implemented a new budget-planning tool, Oracle Hyperion, streamlining the budgeting process and making it less prone to errors. This laid the foundation for more improvements planned in 2020 to further automate and simplify the budgeting process, and upgrade institutional reporting capabilities.

Also in 2019, IFAD began moving to full robotic process automation and launched a fully automated, paperless payment process for consultants.

Aligning with IFAD’s evolving business model
Significant work was undertaken in adjusting IFAD’s administrative processes to institutional changes, especially the more decentralized operating model. For example, we implemented decentralized travel agency services for all IFAD country offices and reformed delegations of authority to conduct low-value procurement with an adequate internal control framework. The security function was enhanced through: security awareness campaigns; monitoring of IFAD staff compliance with mandatory security requirements; monitoring of physical security of IFAD premises worldwide; and delivery of safety and security training.

We also upgraded our electronic records management system to promote knowledge-sharing. And we have widened partnerships with the other RBAs, achieving significant savings through the hosting of the IFAD Governing Council at FAO, implementing common procurement activities, negotiating corporate fares with airlines for discounts, providing printing services to WFP and Bioversity International, and coordinating privileges and immunities activities.

Catalysing innovation
We consider that innovation is a key aspect of delivering better, quicker results. This is why, in 2019, the Change, Delivery and Innovation Unit (CDI) was established. One of CDI’s first moves was to launch the Innovation Challenge – a global, in-house competition for bold new ideas on how IFAD can bring innovation to its operations and business practices. Ten ideas were eventually selected for implementation with some US$700,000 of IFAD funding. Projects included applications of blockchain, virtual reality, crowdfunding and even a board game.

But innovation is not just a matter of coming up with new ideas, it is also about driving change. For example, in 2019 CDI coordinated a response to IFAD’s Global Staff Survey with measures aimed at reducing bureaucracy and supporting a positive working climate. This involved leading the first phase of a business process re-engineering exercise to reduce staff workload and drive efficiency.

Stepping up the use of ICT 
Harnessing new technology is enabling us to respond to partners’ needs more rapidly and efficiently. One example is the continued development of the IFAD Client Portal (ICP). As the one-stop shop for clients to securely conduct business with IFAD and to obtain real-time information, in 2019 the ICP evolved from simply focusing on the submission of withdrawal applications to include the processing of no-objections, contract monitoring, financial statements submission and detailed reporting. By end of the year, it covered 76 per cent of IFAD countries with disbursable projects, processing over US$600 million of transactions and accessing reports and dashboards on a daily basis. 

In 2019, we continued to move towards a financial framework that aims to blend replenishment contributions – which remain the bedrock of IFAD’s financial model – with various forms of debt financing to enable an enhanced programme of loans and grants in a financially sustainable manner. This is key to enable us to scale up our contribution to ending poverty (SDG 1) and achieving zero hunger (SDG 2).

Progressing towards replenishment targets
During the year, progress advanced towards the IFAD11 target of US$1.2 billion. As at 31 December 2019, 94 countries had pledged a total of US$1,008.7 million. This included core contributions, unrestricted complementary contributions for climate and nutrition, and the grant element of concessional partner loans (CPLs). CPLs are a new borrowing instrument, approved during IFAD11, to complement the existing sovereign borrowing framework and to mobilize more concessional funds, which can be on-lent at highly concessional terms. In 2019, CPL agreements were finalized with Finland, France and India. Instruments of contribution (IOCs) deposited (including payments with no prior IOC deposit) amounted to US$955.8 million. Also as at 31 December 2019, Debt Sustainability Framework (DSF) compensation shares pledged amounted to US$35.1 million, leaving a shortfall of US$4.5 million to reach the full compensation for forgone principal reflows under the DSF of US$39.5 million.

Total contributions, inclusive of core contributions, unrestricted complementary contributions for climate and nutrition, DSF compensation, and the grant element of CPLs, are expected to reach US$1.1 billion.

IFAD signed 31 new supplementary fund contribution agreements and 7 top-up agreements with 19 donors for a total of US$151.6 million. These agreements have contributed significantly to our ability to surpass our cofinancing targets, as well as to support non-lending activities such as policy engagement that support IFAD’s operational activities (see annex 1 for more details).

Examples of activities to be supported under these agreements include:
• The EU Regional Trust Fund in Response to the Syrian Crisis (the “Madad” Fund)
• Italy, for the Facility for Refugees, Migrants, Forced Displacement and Rural Stability (FARMS)
• Denmark, to sustainably increase the incomes, food security and nutrition of marginal and small-scale farmers and microentrepreneurs in Bangladesh
• The European Union, in support of agricultural research in Africa, diaspora investment in agriculture in Mali, and capacity-building of farmers' organizations
• Germany and Norway, in support of IFAD’s mainstreaming agenda for youth and nutrition, respectively
• Sweden, to support IFAD’s work on insurance
• France, for the Smallholder and Agri-SME Finance and Investment Network (SAFIN) and ASAP2
• France and Italy, for the second phase of the Platform for Agricultural Risk Management (PARM Horizon 2)
• Iceland, to support a blue economy training activity for project staff

Developing partnerships for positive change
We are continuing to strengthen efforts in partnering with organizations that are in a position to support us in our mission to improve the lives of rural people. New partnerships are enabling us to do more in terms of exercising influence at the global level to promote positive change for rural people. A major milestone was the announcement in September of the Food Action Alliance in collaboration with the World Economic Forum in the context of the Forum’s Sustainable Development Impact Summit. The Food Action Alliance, initiated by IFAD and the World Economic Forum, is an emerging partnership between the public and private sectors and international multilateral organizations to deliver better, faster and at scale on food security and nutrition, inclusive growth and decent jobs, environmental sustainability, and climate resilience, in line with the 2030 Agenda. Additional partners include the Alliance for a Green Revolution in Africa, African Development Bank, the International Center for Tropical Agriculture and Rabobank.

Other new partnerships were also established with:
• the Asian Infrastructure Investment Bank
• the Brazilian Development Bank
• the International Livestock Research Institute
• the International Social Security Association
• the Korea Rural Economic Institute
• the Kingdom of Saudi Arabia

We are well aware that continuing to deepen collaboration with our Rome-based sister agencies is essential to ensure complementary approaches to address the challenges global food systems are facing. In May, along with FAO and WFP, we endorsed a joint RBA Action Plan. The RBAs are placing emphasis on enhancing existing country-level collaboration – FAO, WFP and IFAD have conducted joint field visits, which have led to joint action to develop each agency’s work in a complementary way. Following the joint visit to Niger in 2018, the three agencies presented a plan of action for the Sahel during the 2019 informal meeting of the RBA governing bodies.

Sharing knowledge through South-South and triangular cooperation
South-South and triangular cooperation (SSTC) is a key development cooperation approach that is being embedded in IFAD’s business model to complement the Regular Programme. To this end, we established three SSTC and knowledge centres in Addis Ababa, Beijing and Brasilia, with the aim of furthering the SSTC agenda.

In 2019, the China-IFAD SSTC Facility began implementing the eight projects approved following its first call for proposals in 2018. A second call for proposals in 2019 resulted in a further seven projects being selected. The total amount of both calls is US$6.7 million. The projects cover topics such as technical assistance, knowledge exchange, RBA cooperation and value chain development in all five regions.