Western and Central AfricaPortfolio Performance Review

Regional Project Implementation Workshop Accra, Ghana

1-4 December 2009

Presentation outline

1. Overall context and status of the portfolio

2. Achievements and Challenges

3. Actions taken to improve performance

The overall context of IFAD Portfolio in Sub-Saharan Africa

Population in Sub-Saharan Africa (SSA) 800 million

West & Central Africa (WCA) population 400 million

Extreme poverty line (<$1/day)

60% of extreme poor in SSA in West and Central Africa

24 countries in WCA facing a very challenging environment

WCA is a very challenging environment

with20 LICUS / fragile countries

Human Development Index lowest 5 rankings are in WCA

7 face civil war or conflict; and 3 emerging from post-conflict

1/3rd of the area of WCA is located in the arid or semi-arid zone where drought and famine are common.

However, the enabling environment is improving

Aid environment (including HIPC) facilitate increasing IFAD interventions in the region

Poverty rates and under-nourishment have been declining in most countries

Food output per capita has been expanding with significant scope for yield increases in most countries

7 WCA out of 8 African countries have had average GDP growth rates over 5% from 2000 to 2004

The Portfolio

The IFAD Portfolio in SSA is USD 1.7 billion and USD 800m for WCA (about 47% of SSA)

47 active projects in 20 countries

Total IFAD financing about US$800 million compared to US$729

million from last year

Co-financing mobilized increased by 21% from US$313 million to US$397 million over last review period

The regional grant portfolio amounted to US$17.28 million: 11 large regional grants (US$14.89 million) and 15 small grants (US$2.39 million)

Main portfolio achievements

• Increasing IFAD financing: from USD 729 ml to USD 800 million with a similar number of active projects

• Sustainability trend increasing to 70% from 66% in 2007-08

• 62% of ongoing projects are co-financed

• More Improvements being made in time taken for project effectiveness - approval to effectiveness lag now only 8.7 months against 9.6 months in 2007-08

• 92% of Divisional projects under design have been rated satisfactory or better at Quality Assurance over past year

Implementation improvement strategy

• IFAD direct supervision (34 projects are under DS: 75% of portfolio)

• Portfolio Management Support Unit backstops CPMs, projects in implementation support. Continuous training for projects and at IFAD.

• Grants used to strengthen capacities, particularly M&E, project and financial management

• Greater emphasis given to in-country teams and local knowledge through CPOs and out-posted CPMs (existing, new and planned)

• Regional Implementation Workshop in Douala Jan ’09 provided an Action Plan – and implementation strategy agreed between IFAD and all projects

Improving Performance areas

•Community-Driven DevelopmentCape Verde, Guinea, Mauritania, Nigeria

•Food security and natural resource managementThe Gambia, Mali, Sierra Leone, Chad, Niger, Burkina Faso

•Micro-enterprises developmentGhana, Senegal, Burkina Faso

•Commodity chainsSão Tomé & Principe; Regional cassava processing & marketing

initiative

•Knowledge and innovation sharing (exchange programmes, learning events and workshops,)

Mauritania, Mali, Cameroon, Nigeria, Gambia, East Africa (FIDAfrique III)

Remaining challenges

2007-08 2008-09

• Disbursement lag 12% 27%

• Actual Problem Projects 4 7

• Proactivity Index 80% 75%

• Not effective/not signed projects 7 10

Project performance overall not improving

The increase in number of projects with risk flags may be related to a closer monitoring and supervision of projects by IFAD (compared to supervision by CI)

Indicator # of projects (07-08) % # of projects (08-09) %

Satisfactory (rating 5)Satisfactory (rating 5) 12 30 6 13

Moderately satisfactory ( 4)Moderately satisfactory ( 4) 23 57.5 33 72

Moderately unsatisfactory (3)Moderately unsatisfactory (3) 4 10 6 13

Unsatisfactory (2)Unsatisfactory (2) 1 2.5 1 2

There were no ratings for highly satisfactory (6) nor highly unsatisfactory (1)

Risk status and main areas of concern

a) Project Risk Status

- Projects at risk (7 Actual Problem Projects, 1 Potential Problem Project)- Proactivity index (75%, 3 of 4 problem projects upgraded)

b) Unsatisfactory performance indicators

Fiduciary aspects- Disbursement rate/lag- Financial management- Counterpart fundsProject implementation progress- M & E- Project managementSustainability- Responsiveness of Service providers

Unsatisfactory performance indicators (Source: PSRs 08-09)

The increase in number of projects with risk flags may be related to a closer monitoring and supervision of projects by IFAD (compared to supervision by CI)

Unsatisfactory Performance Indicator* # projects 07/08 # projects 08/09

1) Disbursement rate 14 18

2) Financial management 10 16

3) M&E system 14 14

4) Availability of counterpart funds 12 13

5) Programme management 13 12

6) Responsiveness of Service providers 11 9

*These 6 indicators are critical for project performance

Portfolio disbursement lag

Expected disbursement = cumulative disbursement compared against the median of the % disbursement by quarter for all loans. However, a model to calculate expected disbursement will be developed by PA to respond to LICUS countries specificities

Expected disbursement in 2008-09 = SDR220.4 million

Actual disbursement in 2008-09 = SDR160.7 million

• 6 projects have lags = or > than 40%

Year 2007-08 2008-09

Disbursement lag 12% 27%

Why unsatisfactory disbursement rate/lag?

Main reasons :

- Lack of capacity at the PMU - Inefficient management of the Special Account initial deposit by

the PMU- WAs are not sent on regular basis and/or their processing is

delayed- AWPB and Procurement Plans are not realistic causing delays in

procurement- Non availability of counterpart funds; IFAD funds are often used

to pre-finance Government contribution expenditures

Reasons for unsatisfactory performance in the six risk flags

Lack of capacity at the PMU level

Adaptation period to IFAD direct supervision

Systems and software, records, M&E not appropriately used or set-up

Very heavy and complex structure at the Government level

Counterpart funds are disbursed late or not available

Difficulties in recruiting and retaining competent staff

Lack of competent service providers, late payment to them

Grant management

• Number of ongoing large grants decreased from 15 to 11, and small grants from 19 to 15 thanks to portfolio clean up

• 12 regional small grants managed by PT for a total of USD 7.7 m

• Approval to effectiveness lag of 12 months (average) = stable compared to last year’s review period

• Effectiveness to 1st disbursement lag at 5.6 months = increased compared to last year’s review period lag of 1.8 months

• Need for greater grant supervision

• Division is initiating large-scale dissemination of grant programme results (i.e. Technical Advisory Notes, etc.)

Summary: key actions being taken to improve performance

• Designing simpler projects (fewer components), minimising risks in civil strife countries

• More rigorous supervision and implementation support including customized training program for IFAD staff and projects

• More aggressive restructuring and closing of projects which do not take actions to improve

• Increased partnerships with local and bilateral institutions with demonstrated ability to obtain results in difficult countries

Summary: key actions being taken to improve performance

• Number of active projects are being reduced while emphasising country programme approach (1 substantive project/country designed during the 3 year PBAS cycle)

• Quarterly financial management review introduced in high risk countries

• Regional Douala implementation action plan; and now WS in Accra

• Greater emphasis given to in-country teams and local knowledge through CPOs and out-posted CPMs

• Innovation and learning fostered through partnerships, Knowledge Share Fairs, CDD workshop, FIDAfrique, training events.

To conclude…

Pro-activity required in the following:

Dynamic and proactive management at country level: strengthening and using CPMT; better management of country teams; continued capacity building (at IFAD and project level)

Implementation as key as design: good COSOP and design, with monitored implementation and support – assurance of successful project. Priority now: increased implementation support.

Direct supervision and continuous follow-up of project activities with one main outcome: achieving field-level results and impact!

Areas of further action

• Differential treatment for LICUS countries and eliminate need for counterpart funds in LICUS countries with extra resources for poverty assessments

• Additional resources for implementation support including CPOs and in-country first level processing of Withdrawal Applications

• Preparation grants (resources available before loan signature) and stronger linkages between loans and grants