IFAD in Ethiopia
Projects: 16
Total cost:
US$1013.2 million
Approved IFAD loan:
US$392.9 million
Directly benefiting:
10,410,000 households
Since 1980, IFAD has invested a total of US$408.9 million in 16 programs
and projects for an overall cost of US$1029.2 million. IFAD has also provided
debt relief amounting to US$28 million under the Heavily Indebted Poor
Countries Debt Initiative (HIPC).
IFAD’s
strategy in Ethiopia is well aligned with the government’s Growth
and Transformation Plan - GTP implementation strategies. Accordingly, IFAD
focuses on supporting investment programs with the greatest potential impact on
sustainable household food security and the incomes of poor people. Our
strategy is to improve poor rural people’s access to natural resources such as
land and water, improve agriculture and livestock production technologies and
support services, and develop reliable financial services. Our projects
particularly target women, small-scale farmers and herders.
IFAD has taken the lead role, together with our partners, in the
development and expansion of rural finance, small-scale irrigation and support
systems for pastoral communities. To provide increased support to these
interventions efficiently and effectively, IFAD and the Government of Ethiopia
signed a host country agreement in July 2010. An IFAD country office is now in
place in Addis Ababa and more staff are scheduled to join the office in 2011.
This has enabled us to strengthen our engagement with government, programs,
projects and development partners
Performance of IFAD
The
overall performance of the project portfolio. The
portfolio’s performance (measured in terms of relevance, effectiveness and
efficiency4) is assessed as
being satisfactory5 for the
post-COSOP portfolio (rural finance and pastoral community development) and
moderately satisfactory for the pre-COSOP portfolio, with the exception of
small-scale irrigation, which has been supported since the 1990s through three
different operations.
Relevance.
The objectives of the loan-supported projects have been
found to be highly relevant in the case of rural finance, pastoral community
development and small-scale irrigation. These projects responded to the needs
of the rural poor and were aligned with the main Government and IFAD policies
and strategies related to rural poverty reduction. Moreover, the lessons from
the OE interim evaluation of the second phase of the Special Country Programme
were duly incorporated into the Participatory Small-scale Irrigation
Development Programme (PASIDP).
On
a related issue, the CPE recognizes the importance for the Government of
investing in the development of the National Agricultural Research System,
which is seen as a key feature in promoting food security in the country.
However, it also calls attention to the type of contribution IFAD can make to
the process, especially in view of the fact that research results have often
not become available until long after a project’s completion. This has limited
the opportunities for transferring new technologies to the rural poor and for
promoting their adoption. Furthermore, while the CPE supports the introduction
of research into drought-prone under-served areas, some uncertainty remains
about the selected approach, which would focus on the construction of large
research centres with costly infrastructure based on the assumption that highly
qualified researchers could be convinced to come to remote and marginal areas
and to live and work there on a permanent basis. Similar comments were made
during the internal formulation process in 1998 by IFAD’s Technical Advisory
Division. In fact, according to the CPE, IFAD’s experience with the
implementation of ARTP indicates that these comments are pertinent even today.
The
design of the recent agricultural marketing project is broadly consistent with
IFAD’s Private-Sector Development and Partnership Strategy. However, while
recognizing that the marketing project has been in place for just over two
years, the CPE notes that the project needs to explore opportunities for
greater public-private partnerships.
Generally
speaking, IFAD Ethiopia has been supported projects are expected to
contributing for poverty reduction strategy of the country; particularly to
Growth and Transformation Plan (GTP). Nevertheless, every project was
implementing its planned interventions relatively overlapped target areas, but
without effective integration and synergy to bring effective and efficient
result that lead toward the vision of IFAD in Ethiopia. Recognizing these
problems the IFAD country office has planned to create synergy among all
projects. Moreover, IFAD Ethiopia Program took firm stand in mainstreaming KML
in order to achieve meaningful impacts on rural poverty as well as tangible
contribution for the success of the five years GTP of the government.
Effectiveness.
The effectiveness of the interventions undertaken in
the areas of rural finance, pastoral community development and participatory
small-scale irrigation is assessed as satisfactory. Coverage of beneficiaries
or intervention areas has been expanded beyond the levels initially planned,
and the overall quality of services has matched the needs of the beneficiaries.
Effectiveness has been appraised as being moderately satisfactory in the case
of agricultural research (benefits to the broader research system in Ethiopia, while
still limited, are potentially transferable to extension efforts and to
farmers) and as moderately unsatisfactory in the case of cooperative
development (there has been only limited progress in terms of the quality of
services, and problems of insolvency have arisen).
In
the area of pastoral community development, effective and innovative models of
local governance have been introduced for planning and implementing investments
in community infrastructure, as well as in income-generating activities for the
poorest, and this has provided stakeholders and beneficiaries with a sense of
ownership. Communities are actively engaged in the planning and implementation
of microprojects to which they contribute in kind or with cash. Substantial
improvements in living standards are noted. (IFAD uses a
six-point rating scale in which 1 represents the lowest score and 6 the
highest. A 5-point rating is considered to be satisfactory).
Efficiency
is assessed as satisfactory for rural finance, due to
the favourable operating cost ratios when compared to regional standards in the
industry. Efficiency is assessed as moderately satisfactory for pastoral
development and small scale irrigation. While unit costs for construction are
within the parameters of comparable interventions, because of the incomplete
status of much of the infrastructure (pastoral development) and delays in
implementation (irrigation), the benefits will accrue to the project much later
than expected. Efficiency is assessed as being moderately unsatisfactory in the
cases of both cooperative development and agricultural research. This is due to
the fact that the level of project outputs is significantly lower than expected
and to delays and high unit costs in construction and delivery. This situation
is, however, attributable to many factors that are beyond the control of the
project management teams, such as the focus on quantitative targets and the
wide geographic coverage of activities which is called for in the project
design.
A. Rural Poverty
Impact
The
CPE assesses the overall impact on rural poverty as being satisfactory, with
the exception of the early support for cooperatives provided through SOCODEP,
for which the impact is assessed as moderately unsatisfactory. Given the nature
of the project, in which emphasis is placed on the construction of large
research centres, the impact of the support provided for agricultural research
is not rated because it could not be gauged at the time of evaluation. Because implementation of AMIP and PASIDP has begun so
recently, the CPE did not assess or rate the impact of these two new projects.
Impact
on household income and assets. In terms of the
number of households in which income levels and asset ownership have improved,
the most significant contribution has been made by the support provided for
rural finance, followed by the support furnished for pastoral communities and
irrigation. Rural financial services and the MFI industry are making a
significant contribution to poverty reduction in Ethiopia by reaching the poor,
although they do not always reach the poorest. Impact studies consistently
identify widespread and significant improvements in household income,
consumption and asset-building among the vast majority of MFI clients, who are
mainly the “economically active poor”. As is common in microfinance, the
available information suggests that although some changes begin to occur when
the very first loan is disbursed, it is not until after the fifth loan (usually
by the fifth year) that significant improvements in income and living standards
can be seen.
There
is evidence that pastoral community activities are having a broader impact in
terms of poverty reduction. Through an income-generating scheme, interventions
have directly contributed to improving the income levels and asset accumulation
of some 10,000 of the poorest community members, of whom 78 per cent are women
(including female heads of household). According to the evidence gathered
through focus group discussions, it appears that activities are simple and
affordable for very poor households (e.g. petty trading, breeding of poultry,
fattening of goats and sometimes oxen). These results can also be attributed to
the effective and participatory rural appraisal which was conducted when
intervention plans were being prepared. In addition, many more households may
have obtained indirect income benefits from the community micro-projects, in
particular the water supply schemes.
Some
31,000 households in densely populated drought-prone areas have been reached
through the support provided for small-scale irrigation projects, and many of
these households are gradually seeing an improvement in their incomes. Findings
suggest that increases in crop yields over the traditional yields are in the
range of from 25 to 40 per cent, and in cases where irrigation facilities have
been built around springs, the increases have been between 75 and 100 per cent.
Thanks to these irrigation projects, the targeted irrigation farmers’ physical
and financial assets have started to increase, although experience suggests
that it may take six or more years for irrigation farmers to experience the
full benefits.
Food
security. The most direct and significant
contribution to an improvement in food security for rural households has been
made by the support furnished for small-scale irrigation projects. Information
collected by the OE interim evaluation team on Phase II of the Special Country
Programme shows that some farmers were experiencing a reduction in the number
of “hungry months” from about six to two (July and August) thanks to larger and
more reliable yields and higher income. It has also been reported that the
range of dietary intake is widening due to crop diversification.
The
support provided for rural finance and pastoral community development has also
made important direct and indirect contributions. In the case of rural finance,
the various impact studies show that the first impact for new clients is
consumption smoothening, as these interventions enable households to meet their
food requirements throughout the year. Generally speaking, for most rural
clients, the first few loans are used to purchase oxen (usually for use in
ploughing, but also for sale after the oxen are fattened). Multi-access loans
have permitted the diversification of the income base, and this, combined with
growing savings deposits, has improved clients’ capacity for coping with
drought and other external shocks. In pastoral communities, many micro-projects
have been undertaken to improve the water supply, which enables these
communities to deal more successfully with recurrent droughts. The support
furnished for cooperative development made much less of a contribution than
expected to an improvement in food security. Reasonable
disaster risk management have been created through long term DPISP and
decentralized EWI and Response package
Significant
progress has been made in these areas towards the main objective of increasing
yields and cropping rates by expanding irrigated agriculture, and the targets
for beneficiaries and for the land area to be brought under irrigation have
been surpassed. However, advances have been relatively modest in the case of
objectives relating to water management and the settlement of water-rights
issues, user organizations, soil conservation, crop husbandry and vegetable
seed production, and the development of economic activities for women
Market
access. Providing greater access to markets has not
been among the key objectives of these interventions, with the notable
exceptions of AMIP and SOCODEP. Therefore, not surprisingly, the programme’s
contribution in this sphere has been modest when compared to the contributions
made in other areas. For example, some rural finance clients who have bought
oxen or other transport animals have improved their access to markets. Similar
effects may be seen for some beneficiaries of the income-generating scheme
supported in pastoral communities. The support for cooperative development
included the construction and rehabilitation of roads, which did improve market
access for some households, though fewer than targeted. Limited achievements
were made in promoting viable service cooperatives that provide efficient
access for their members to markets and services.
Human
capital. The main contributions to development have
come from the support provided to pastoral communities and the BSF-financed
water supply, health and basic sanitation component of SOCODEP, while the
support furnished for rural finance has made more indirect contributions. More
than 10,000 staff and community members in pastoral areas have been trained,
and households are starting to benefit from the services provided by health
posts and new schools (although no data are available on the quality of the
teaching or of the learning process). The results of the BSF health component
were - according to a BSF-financed impact study and the OE project completion
evaluation of SOCODEP - positive and substantial.
In
rural finance, the impact has been more indirect. Some impact studies have
reported that some clients have improved their income levels and are therefore
in a position to send their children to school. However, progress in supporting
skills development by MFI staff and RUSACCO members has been modest due to the
lengthy procurement procedures employed by the co-financing partner (AfDB).
The
impact of irrigation interventions on human assets, in the form of the
development of skills and knowledge, has been limited by the generally poor
quality of extension work, an unimaginative use of trials and demonstrations,
and the limited institutional support that has been provided. While a large
training programme was made available in order to provide support for
cooperatives, any lasting impact on the institutions involved was undermined by
frequent government restructuring and redeployment of personnel. Furthermore,
capacity-building efforts largely ignored the importance of changing people’s
attitudes towards the cooperative model.
Social
capital. The most significant contribution made in
this domain has come from the support furnished for pastoral community
development. Communities have been empowered through the effective use of
participatory methods and the formation of the woreda (district) development
committees and community development committees, which include members from
government, the private sector and civil society. These committees may serve as
a model for woreda and community planning throughout the country. Significant
impacts have also been observed in the area of rural finance, where credit
groups, local networks and RUSACCOs are helping to develop social capital at
the grassroots level. While the support for cooperatives was expected to make a
major contribution to social capital development, at the project completion
point most of the cooperatives were still weak, both financially and with
respect to management capacity and business skills.
In
the sphere of irrigation, the impact on social capital, through the
establishment and strengthening of local organizations for water management,
has been more limited. The situation has been complicated by the presence of
three different organizations within the same scheme: the traditional water
user group, the “modern” water user association (WUA) and an irrigation
cooperative. Traditional water-user groups have not been utilized effectively
in the move to “modern”’ organizational forms (WUAs and cooperatives). The cooperative
promotion departments, which are mandated to strengthen WUAs, have focused on
the promotion of irrigation cooperatives, even though the cooperative concept
is unattractive to some (perhaps many) farmers because of the coercive
application of cooperative schemes during the Derg administration. This has
been taken into consideration in the design of the latest small-scale
irrigation intervention (PASIDP).
Institutional
impact. The support provided for pastoral areas has
effectively contributed to new approaches and systems for planning and
implementing public investments at the community level. The woreda development
committees and community development committees are in operation and are
contributing to a sense of local ownership. Governmental Institutionalizations of CDD approach through cohesive
partnership between communities and
local government, as well as decentralized risk management established with
firm foundation of early warning and response coupled long term preparedness ,
above all contributed for the deepening of the decentralization process and
popular participatory deevelopment. The support for rural finance has
made a significant contribution towards building an inclusive financial system
that can sustainably address the financial needs of the poor. Mechanisms for
linking the MFI sector and the banking industry have been introduced, and a
diversification process has been initiated in terms of the products offered and
the range of institutions servicing the poor, including RUSACCOs. Finally, the
capacity of the regulatory framework in respect of both MFIs and RUSACCOS has
been strengthened, in particular by helping the National Bank of Ethiopia to
upgrade its Microfinance Supervision Division and give it the status of a full
department. Also, some steps have been taken to reinforce self-regulatory
mechanisms in the microfinance industry by supporting the Association of
Ethiopian Microfinance Institutions (AEMFI).
The
overall National Agricultural Research System (NARS) of Ethiopia has been
significantly strengthened through ARTP for human resource development and
facilities. Through its involvement
in
this support effort, IFAD has helped to introduce competitive research grants
and to establish the basis for improving linkages with the extension system.
The chances that IFAD’s support for six agricultural research centres in remote
drought-prone areas will have a positive institutional impact will depend on
how the current problems of these centres are solved. These
problems include a failure to complete construction work, a lack of potable
water, inadequate accommodation facilities, and difficulties in attracting and
retaining high-quality staff. At the project’s close, major efforts were
reportedly being made to solve the water-supply problem.
Sustainability.
It is likely that most of the benefits promoted through
IFAD-supported activities will be sustained after the relevant projects come to
an end. In fact, in Ethiopia, sustainability prospects are significantly better
than they are, on average, for IFAD-funded projects across all regions (see
table 3). In recent years, more than 10 per cent of the Ethiopian Government’s
budget has been allocated for agriculture and food security. Therefore, within
the public domain, budgetary resources are usually available to support the
continuation of activities in this field. Another positive element is that
project management units are well embedded within the decentralized government
structure (Phase II of the Special Country Programme, PCDP) or in permanent
national organizations (RUFIP, ARTP).
Innovation,
replication and scaling up. The IFAD
portfolio has contributed to the introduction of a number of systems and
approaches that are innovative in the Ethiopian context. For example, in
agricultural research, innovations have included: (i) a system of competitive
research grants; (ii) Farmer/ pastoral Research Groups, through which farmers
are involved in research activities on an ongoing basis (this approach will be
continued and scaled up with the help of funding from the Japan International
Cooperation Agency (JICA)); and (iii) a system of research extension advisory
councils which is supported by public policy and the government budget.
In
the area of pastoral community development, a community-driven development
approach has been introduced, and the planning and management of community
investments are now being conducted by the woreda (district) development
committees and the community development committees. The potential exists for
scaling up this approach and system, not only in pastoral areas (further
funding will soon be coming from the World Bank), but nationally as well. In
the sphere of rural finance, RUFIP has helped to link MFIs with the banking
industry, and large MFIs are now accessing funds from commercial banks.
In
general, while the Ethiopia CPE notes that projects and programmes have
introduced innovations in technology or in social areas, the replication and
scaling up of tried and proven innovations have not been systematic. Although
recently greater efforts are being deployed in this area, in the past
insufficient attention and resources have been devoted to policy dialogue,
knowledge management and partnership-building, all of which are essential
ingredients for replication and scaling up (see the following section). Direct
supervision and the provision of implementation support, together with the
maintenance of an IFAD country presence in Ethiopia since 2005, are steps in
the right direction which can contribute to more effective innovation scouting
and promotion.
For
this purpose the issue of Knowledge Management and Learning (KML) came to into
picture as an approach to address the multi-faceted problems and improve
performance through better managing knowledge thereby help meet the vision.
Moreover, IFAD Ethiopia Program took firm stand in mainstreaming KML in order
to achieve meaningful impacts on rural poverty as well as tangible contribution
for the success of the five years GTP of the government.
As
IFAD becomes knowledge intensive, KML was found crucial in alleviating the
prevailing situations affecting the performance of each of IFAD supported
programs and leading to low synergy between them which in turn have been
resulted in slow impacts. Generally
speaking, the major issues which led to the necessity of mainstreaming KML both
at programs, Country Program Management - CPM and government partners level.
B. Non-project
Activities
The
implementation of non-lending activities (knowledge management, policy dialogue
and partnership-building) has been limited, mainly because of a lack of
resources and the fact that in the past a high priority has not been placed on
such activities. The situation in this respect is improving, however. First,
the country programme manager now has more resources available than s/he did a
decade ago, which allows the manager to engage more effectively in non-lending
activities. Second, the CPE found that the country presence has contributed to
improvements in donor coordination, an exchange of experiences and policy
dialogue.
Policy
dialogue. IFAD’s main contribution to policy dialogue
has been made during the project design phase. Furthermore, in some cases, a
policy dialogue component has been included in the project design (e.g. in the
pastoral community development and rural finance projects). However,
supervision reports note that policy dialogue components are lagging behind
“operational” components and that engagement by government agencies has not
always been as expected. Despite this, a
participatory policy and strategy review was undertaken by private consultant
and “pastoral policy statement” was developed as one of key performance
triggers of phase I of PCDP. Same process was continued to be cascaded to
regional level strategy development in PCDP II as operational component named
“policy implementation fund”. The policy recommedndations resulted in reforms
of strategies such as “pastoral risk management”; appropriate extension and
social servives (education, agriculture, animal and public health)
Knowledge management. This area of activity
was identified as a high priority in the COSOP, but limited progress has been
made in this respect. As mentioned earlier, project-level M&E systems,
which are at the foundation of a vibrant knowledge management system, have
generally performed unsatisfactorily. Under the civil service reform programme,
public institutions are improving their management information systems and are
conducting planning, budgeting and reporting functions based on output targets
and deliverables. However, relatively little attention continues to be paid to
impact issues, and baseline and repeat surveys focusing on changes in household
livelihoods are therefore generally not done. As a means of stimulating
knowledge management, in 2007 IFAD launched the Country Programme Forum to
facilitate contacts and meetings among IFAD project stakeholders (the
Government, IFAD, other donors) with a view to exploring synergies between
projects and different actors and exchanging experiences and lessons.
Moreover,
every project was implementing its planned interventions relatively overlapped
target areas, but without effective integration and synergy to bring effective
and efficient result that lead toward the vision of IFAD in Ethiopia.
Recognizing these problems the IFAD country office has planned to create
synergy among all projects. For this purpose the issue of Knowledge Management
and Learning (KML) came to into picture as an approach to address the
multi-faceted problems and improve performance through better managing
knowledge thereby help meet the vision. Moreover, IFAD Ethiopia Program took
firm stand in mainstreaming KML in order to achieve meaningful impacts on rural
poverty as well as tangible contribution for the success of the five years GTP
of the government.
Partnerships:
At the federal level, there is a solid partnership with
the Government, especially the Ministry of Finance and Economic Development,
Ministry of Agriculture and Rural Development, Ethiopian Institute of
Agricultural Research and others. These agencies regard IFAD as a flexible and
valuable
organization that is working to reduce rural poverty by promoting innovations
in remote areas, and they realize that this area of endeavour is not usually
considered to be a priority by other development organizations.
In
recent years, co-financing partnerships have declined in importance as several
major development partners adopted the budget-support modality. Furthermore,
some of IFAD’s traditional partners, such as AfDB and the World Bank, did not
place priority on small grassroots-type agricultural and rural development
interventions in Ethiopia in the period assessed by the CPE. Non-governmental
and civil society organizations (NGOs and CSOs) have traditionally played a
less important role in development cooperation in Ethiopia than in some other
African countries and have therefore not been as widely involved in
IFAD-supported projects and programmes in the past. However, the capacity of
NGOs and CSOs is improving and, as suggested by the experience gained in
support activities for pastoral communities, NGOs and CSOs can play an
important role in supporting communities and grassroots organizations. The
capacity of private-sector service providers is also expanding, albeit from a
low base level, and this remains an area in which further inroads can be
promoted within the context of IFAD operations.
The
performance of IFAD. In the majority of cases, IFAD has
contributed to good project design. This is especially the case in
IFAD-initiated projects and programmes in such areas as rural finance and
small-scale irrigation. As a consequence of the operating model used in the
past, under which supervision was delegated to cooperating institutions, IFAD
was perceived as a flexible but distant partner in project execution. With the
adoption of the direct supervision and implementation support policy and the
establishment of a country presence in Ethiopia, this perception is rapidly
changing. The CPE found that IFAD’s country presence is an importance feature
of the operating model which can help to further strengthen its development
effectiveness, even though the present country presence arrangements (e.g.
limited resources and delegation of authority) may act as a constraint on its
opportunities in the future.
Cooperating
institutions and cofinanciers. The World Bank
has served as the cooperating institution (CI) in three of the projects
reviewed in the CPE. The best performance has been observed in PCDP, where the
Bank’s Ethiopia country office is in charge of the provision of support and
where all items have truly been cofinanced by IFAD (40 per cent) and the World
Bank (60 per cent). The least satisfactory performance was seen in ARTP, where
support was provided through brief missions from Washington and where IFAD was
fully financing three separate components of the project. The United Nations
Office for Project Services (UNOPS) served as CI on two of the reviewed
projects and provided a moderately satisfactory level of service, but did not
focus enough on correcting problems faced by these projects. The CI and
co-financing partnerships with the World Bank and AfDB have been hampered by
the cumbersome procurement procedures and regulations of these organizations.
This has resulted in delays in implementation, particularly in the case of
research (ARTP, World Bank) but also in the area of rural finance (RUFIP),
where AfDB regulations have hindered progress on the capacity building
components; this, in turn, has had a negative impact on the IFAD-financed
credit component.
The
performance of the Government and its agencies. The
Government’s overall performance is assessed as satisfactory. IFAD has been
engaging in an increasingly constructive and useful dialogue with key government
ministries and agencies. A useful dialogue has been maintained with the
Development Bank of Ethiopia in connection with the credit component for which
it is fully responsible. In the instances in which performance has not been
fully satisfactory, the major problem has been a lack of clarity regarding the
assignment of responsibilities. For example, in the support for cooperatives
provided under the SOCODEP project, too many agencies were involved and major
institutional changes took place which hurt performance.
CONCLUSIONS
Clear
portfolio development directions, but limited analysis of resource needs. The
1999 COSOP was prepared at very little cost but provided concise and clear
directions for portfolio development and non-lending activities. Given the
limited resources available for its preparation, the COSOP’s analytical
underpinnings were, understandably, inadequate. Among other shortcomings in
this regard, different typologies of rural poverty in the country were not well
captured. The COSOP also implicitly assumed that policy dialogue and knowledge
management would be taken care of through IFAD-financed projects, without any
accompanying activity or a specific budget allocation. Finally, the COSOP did
not clarify how the different subsector programmes would reinforce each other
(for example, how to provide financial services, irrigation and marketing
services to the same clients and communities).
Satisfactory
portfolio performance. In terms of many of the key evaluation criteria used by
the Office of Evaluation, the performance of IFAD-supported projects in
Ethiopia has been better than the average for IFAD operations globally (see
table 3). This is an achievement that warrants acknowledgement. In particular,
performance has been good in areas such as small-scale irrigation, rural
finance and pastoral community development, where IFAD operations have had an
impact in terms of reducing rural poverty. Progress has also been made in the
critical area of local governance. Performance and results have so far been
more limited in the area of cooperative development and in the sphere of
agricultural research, where any large-scale impact on farmers’ livelihoods may
not become apparent until after the relevant interventions have come to an end.
This has also been true with regard to
the engagement of the private sector. Overall, sustainability prospects are
good, partly thanks to the fact that the Government has allocated a sizeable
share of its budget to agriculture and rural development.
Valuable
innovations. Innovations have been introduced in a number of IFAD operations.
Community-driven approaches have fostered local partnerships among the public
sector, private enterprises and civil society. In the area of agricultural
research, ARTP introduced competitive funding facilities which can also be
accessed by private entities and non-governmental organizations. Participatory
research activities with farmers and a system for linking up research,
extension and farmers have been established. The Government of Ethiopia and
some donors (the World Bank, the Japanese International Cooperation Agency) are
extending further financial support for these innovations. In the area of rural
finance, linkages between MFIs and banks have been facilitated, and rural
savings and credit cooperatives (RUSACCOs) have been introduced. The
replication and scaling up of tried and proven innovations have not received
systematic or sufficient attention, however.
Opportunities
for further improvements. Opportunities exist, for example, for bringing in
computerized management information systems for use by MFIs and for introducing
business development services for rural finance clients. In addition, IFAD has
not taken full advantage of its grant programme in Ethiopia. The majority of
the grant funds have gone to research projects that are not closely enough
linked to the lending portfolio, while small grants that are tied into a given
project have proved their validity for generating useful knowledge and piloting
innovations.
Project
design. Project design has generally been of good quality. However, in the case
of agricultural research (ARTP), concerns expressed by the Technical Advisory
Division about the project design were not fully responded to. The CPE finds
that these concerns are still pertinent.
Supervision
and implementation support. Under IFAD’s traditional operating model, these
functions have generally been outsourced to cooperating institutions. This is
now changing, however, with the implementation of IFAD’s new supervision policy.
The evaluation considers this to be a good policy that is likely to enhance
IFAD’s development effectiveness in the country. Cases of complex and “heavily
procedural” approaches to procurement have been observed in the context of ARTP
and RUFIP which have caused delays and hurt performance.
