AfDB-IFAD Joint Evaluation of Agriculture and Rural Development in Africa: Draft Final Report

1. AfDB-IFAD Joint Evaluation of Agriculture and Rural Development in Africa: Draft Final Report Consultation Meeting with African Governments 29 September 2009, Bamako Mali

2. Evaluation objectives • Determine relevance of IFAD/AfDB policies and operations • Assess performance and impact of AfDB/IFAD policies and operations • Evaluate strategic partnerships of IFAD/AfDB • Develop recommendations to enhance effectiveness * Forward looking - how can IFAD/AfDB more effectively respond to Africa’s changing environment (food price volatility, climate change, Accra Agenda for Action, economic downturn etc.) in partnership with each other and other major players in ARD?

3. Process • Interim Report (April 2009): • Past performance of AfDB/IFAD (meta evaluation) • Emerging challenges and prospects for ARD in Africa • Role of partnerships • Business process review • Quality at entry review and Country Synthesis Report (based on field work in eight countries) • African Stakeholder Workshop Mali (September 2009) • Final report (December 2009) to be discussed with the EC/CODE and Executive Boards • Learning workshop(s) in 2010

4. AfDB and IFAD • IFAD and AfDB are major players in ARD in Africa • Combined cumulative total US$ 10 billion in loans and grants increasing to about US$17 billion with co-financing and borrower contributions • By 2005 the two accounted for 50% of all multilateral aid to ARD in Africa • Current lending(2007): AfDB US$ 274 million, IFAD US$ 208 million • AfDB is multi-sectored working exclusively in Africa while IFAD works exclusively in ARD throughout the world • Both have been over the past 3-4 years undergoing a reform process which continue today. Reforms have mainly focused on lender performance

5. Context: Africa on the move • Economic and agricultural growth accelerating and potential for further growth • Agriculture is essential for reducing hunger • Stronger civil society & improved democratic processes; reduced number of armed conflicts • More regional integration and space for private sector activities • Political will: Rising government commitment to agriculture and rural development and emergence of CAADP • Changes in Aid: Emerging donors playing increasing role, Paris Declaration, return to ARD

6. Context: Challenges Remain • Adapting to and mitigating climate change • Volatile prices for commodities and underdeveloped and inefficient input/output markets • Unfavourable external trade regime and distortions • Infrastructure gap • Getting turnaround in fragile states • Weak government capacity & poor quality sector institutions & limited decentralization • Slow pace of regional integration and weak decentralization • Stagnant volume and quality of aid from traditional donors, new donors emerging

7. Main Findings: ARD Context • There is a Policy Gap in ARD:includes the knowledge gap as well as limited capacity to formulate and implement sound policies • Agricultural growth as a key to reducing rural poverty • Need to focus on widely shared growth (the four Is”): • Improve investment through incentives for farmers & private sector • Close the infrastructuregap • Focus on innovation as the primary motor for productivity • Institutional and human capacity development to overcome weak institutions including for Ag S&T

8. Main Findings: ARD Context (Cont.) • Improve the focus on: • Small holder farmers • Majority of poor people in Africa are engaged in agriculture especially women • Producing for subsistence and the market • Smallholder development is a key to reducing poverty • Bottom Billion • Fall into four traps: Conflict, Natural Resources, Landlocked with poor Neighbors, and Poor Governance and Policy • Require different instruments and implementation modalities

9. Main Findings: ARD Context (Cont.) • Enhanced engagement with the Private Sector • AfDB and IFAD traditionally work through governments • Agriculture is largely a private sector activity • Shift in focus is required (value chain and markets) • Rural Finance • Important input for agricultural and non-farm activities • It is a challenging area requiring innovation

10. Main Findings: ARD Context (Cont.) • New aid architecture • Proliferation of donors • Development assistance shifting to new donors: emerging countries and private sector • 2005 Paris Declaration on Aid Effectiveness bringing more harmonization, alignment, managing for results • Growing importance of regional African organizations, e.g. NEPAD, CAADP

11. Main Findings: ARD Context (Cont.) • Imperative for Regional Integration • Small countries depend on regional integration, given their limited resources and capacities • Regional infrastructure critical for access to markets • Natural resources and environmental management require trans-boundary collective action • Defence against plant and animal epidemics requires collective regional action

12. Past Performance: AfDB & IFAD Projects (Evaluations 2003-07)

13. Project Performance

14. Project Performance (cont.) • Overall 55% of projects have a satisfactory or moderately satisfactory poverty impact • Impact was good in agricultural production and physical assets • Impact was less positive in promoting access to markets, strengthening gov’t institutions, and natural resource management • Sustainability is the area of greatest concern • Weak performance for both IFAD and AfDB as well for the borrowers

15. Country Performance • Relevance of country programmes lower than for projects • Policy dialogue found to be inadequate • Partnerships with governments have been good while partnerships with other development agencies could benefit from a more systematic approach. Likewise greater integration and partnership with the private sector should be considered

16. Performance Issues • Micro-Macro paradox • Not enough attention paid to Gender • Weak analytic work including knowledge management • Performance of the lending agencies and especially borrower governments is critical for overall performance • Focusing on sub-sectors such as livestock, irrigation, micro-finance and community driven development • Benchmarking: performance is on par with other organizations

17. Partnerships • IFAD/AfDB partnership agreements: IFAD and AfDB moved from a strongly input and activity-oriented partnership (1978 agreement) to one focused more on results and joint actions (2008 agreement) • Past partnership performance has generally been weak, mostly confined to about 30-40 co-financed projects (often including other donors), with relatively little joint action, and poor supervision quality of the Bank • Both organization have had good partnerships with African Governments • Partnerships with others: IFAD: Belgium Survival Fund, Farmers associations, Farmers’ Forum, AGRA and IFPRI. The Bank: NEPAD/CAADP. Links with FAO, World Bank, and WFP are not prominent, when happening more opportunistic than strategic

18. Partnerships (cont.) • There is partnership proliferation and competing demand in IFAD and AfDB: • agencies need to set partner priorities better than they have done until now. • IFAD and AfDB need clear partnership policies and objectives. Both agencies have strong corporate intent but no guidelines on rationalizing and ordering various partnerships. • more focus on specific partnership results; set expectations for value-added • IFAD and AfDB need to clearly articulate their comparative advantages in a possible future partnership. • Partnership focus will have to shift from the global to the country level • Ongoing internal reforms in both agencies should be used to develop workable partnership models and supportive business processes • Strong partnerships are dynamic in nature, they require flexibility • Adequate resourcing, including staff resources, and organizational incentives are crucial to make partnerships work

19. The story emerging from the evaluation • Africa is a continent on the move • Medium and long term prospects are good, as there is renewed interest in ARD and macro-economic policies have improved • Challenges remain, new and old, such as low levels of human development, climate change and distored trade regime • Agriculture is key for economic development and poverty reduction. There is untapped potential • Good policies matter, however, there is a policy, institutional and leadership gap. Many governments lack the capacity to lead the development and implementation of pro-poor policies and programmes

20. The story emerging from the evaluation (cont.) • There is more space for private sector engagement in Africa, yet there are opportunities to further expand collaboration (e.g. in promoting market opportunities) • Government performance critical for results on poverty • Political will needs improvement in some countries with greater allocation of resources to ARD in line with Maputo declaration • Partnership between IFAD and AfDB in the past was opportunistic, rather than strategic. Limited co-financing over the past 30 years

21. The story emerging from the evaluation (cont.) • Complementarity between the organizations could be the basis for future partnerships • Strong partnership required between public and private sectors and civil society • IFAD-AfDB need to deepen and complete the process of internal change, and go beyond their current role as project investment agencies and become more focused and specialised • Non-lending activitiesweak in both agencies • Sustainability of benefits and gender equality remains a major concern

22. Recommendations • Focus around the three “Ps” of policy, performance and partnership. Filling the sector policy gap • At regional/sub-regional level, assist CAADP in implementing its mandate and provide a joint statement of support to CAADP • At country level, support borrowers to develop sound national ARD policies • At country level, support sector coordination and align agency strategies and programmes with national policy framework • At global level, develop knowledge and capacity to engage in international advocacy on trade issues affecting African producers

23. Recommendations (cont.) Improving Lender Performance • Strengthen country presence and finance more relevant and tightly focused projects • Increase support to fragile states • Develop increased knowledge and capacity in the areas of policy, analytic work, knowledge management, and partnership • Move further from multi-component approaches to more specialise agenda and strategic partnerships

24. Recommendations (cont.) Improving Borrower Performance • Undertake capacity needs assessments of Borrowers in ARD, and provide substantial support for institutional development, including gender mainstreaming • Support governments to address capacity issues relating to political decentralisation

25. Recommendations (cont.) Building better partnerships • AfDB-IFAD to deepen their current bilateral partnership based on their respective comparative advantage, specialization and complementarity • IFAD’s role in pro-poor innovations and Bank’s capacity to upscale offer opportunities for wider impact • Bank support for large scale operations (e.g., infrastructure) to be complemented by IFAD’s attention to small scale activities (e.g., small producers and their organizations) • At regional level, take forward their partnership within the framework of CAADP