Objective

The overarching objective of the evaluation is to examine the relevance, efficiency and effectiveness of the PBL instrument as used by the Bank in regional member countries over the period 1999 – 2009. Specific attention is being given to the evaluation of: 

 a) The AfDB’s institutional and policy framework for the design, appraisal and delivery of PBL: to evaluate the Bank’s formal policy framework, procedures, skills and organisational structure for the delivery of PBL. How well does this reflect emerging international (and Bank) best practice; and is the Bank organizationally equipped to delivery best practice PBL efficiently and effectively?

b) Policy and practice: to evaluate the Bank’s approach to the design, appraisal and delivery of PBL instruments in practice and how well this fits or deviates from Bank policy guidelines, with international best practice and country context and needs.

c) Choice of aid instruments: to evaluate how choices are made about the use of aid instrument in the country programmes and how relevant it is to the partner country’s problems, policies and priorities 

d) Effects at country level: To assess the contribution made by the AfDB to policy dialogue, joint processes, institutional strengthening and other relevant areas where PBL is focused.

Main Findings

• The degree of harmonisation and alignment of PBOs has improved significantly over the evaluation period There has been significant progress made by the AfDB in Rwanda in terms of harmonisation and alignment of PBOs, which has occurred in the latter half of the evaluation period. PRSSP I-III and the education sector support use government financial, procurement, reporting, monitoring and evaluation, and audit systems. The PRSSP has also become more aligned over time, as the PRSSP I had as a condition the use of a special account for the AfDB in the Treasury. As this increased transaction costs for the GoR this requirement was eliminated for PRSSP II-III with funds being paid into a single treasury account along with other donor funds. Similarly, in education AfDB funds are paid into a special account for all donors funding the education sector budget, rather than a separate AfDB account.

• Policy dialogue and strategic engagement by the Rwanda field office (RWFO) has improved Since the opening of the RWFO, engagement by the AfDB in policy dialogue has been strengthened. Both the GoR and DPs noted that this has had a positive impact on the level of AfDB participation in forums for policy dialogue and visibility at the national level. Currently the RWFO participate in the DPCG and BSHG, while they co-chair the water and sanitation SWG and they have been active in the social, economic and governance clusters, as well as SWGs for PFM, energy, transport and education. The AfDB also co-chaired the BSHG for 6 months in the first half of 2008 and will do so again from January 2011.

• The value-add of AfDB's participation in PBOs has been an impact on policy and processes and additional funding The main value-added from AfDB’s participation in PBOs has primarily been through the additional funding that it has provided to the government budget in conjunction with other DPs. Budget support (general and sector) has funded a large proportion of the GoR Budget at around 50% of the GoR recurrent budget in 2009/10 (ODI and Mokoro, 2009). This has allowed the GoR to increase priority spending in line with the EDPRS target of 13% of the total budget (IMF, 2010). This funding has also supported implementation of the GoR reform programme and the 2010 Joint Annual Budget Review noted that the GoR has made ‘good progress in terms of EDPRS implementation’. In terms of achieving indicators in the CPAF, 73% of economic indicators and 67% of social sector indicators were fully met.

• In-year predictability of AfDB disbursements has improved Year-to-year predictability of PBO disbursements has not been an issue during the evaluation period, but there have been problems with in-year predictability, although this has improved considerably over the evaluation period. This is mainly as a result of efforts that have been made by the RWFO to improve performance in this area.

• Decentralisation of authority to country level has improved PBO operations and further decentralisation would make operations more effective The process of decentralising more authority to country level has been an important move as it was reported by both the GoR and DPs that the establishment of the Rwandan office in 2005 was important in speeding up transactions and making working with the AfDB easier. It has increased interactions between the GoR, DPs and the AfDB, while in the last three or four years it has also been noted that the RWFO has become more visible at national level, as well as becoming more proactive and responsive.

• The capacity to implement PBOs effectively has varied due to staff changes There are currently four professional staff in the RWFO in addition to the Country Programme Officer (CPO) and the Resident Representative. These include an agronomist, an infrastructure specialist, a consultant recruited to support the infrastructure specialist, and a socio-economist. The economist post has been vacant for some time, but it is expected that it will be filled soon.

• There has been a clear trend towards greater use of PBOs within the Rwanda programme and the share of PBOs as a total of country programme disbursement has increased This is evidenced by the AfDB providing general budget support from 2005 onwards, after a gap of five years, as the last structural adjustment programme (SAP II) was completed in 1999. It is anticipated that this assistance will continue to be given to the GoR through GBS for the foreseeable future. There has also been a sector PBO in education, although it is not currently known whether this support will continue after the first phase ends in December 2010. Greater use has been made of PBOs partly as a result of the Bank's initiative to align more closely with international initiatives on harmonisation and alignment, but also because of the strong preference expressed by GoR for the use of budget support where possible.

• Ther is a lack of discussion within the Country Strategy Paper (CSP) on the mix of aid instruments needed to achieve results The CSP should be the main document providing guidance on which sectors PBOs will be used in and how PBOs will complement the rest of the programme. In practice the Rwanda CSPs do not do this and are not able to provide the strategic framework which should drive the use of PBOs. For example, the 2008-2011 CSP notes that Rwanda’s Aid Policy identifies budget support as the GoR’s preferred aid modality and encourages the use of country systems, but there is no discussion within the CSP as to options for the AfDB to comply with this or about other sectors in which PBOs might be used or greater alignment achieved.

• The efficiency and effectiveness of PBO design has improved in the last five years with lessons learned from previous operations The design of PBOs has improved significantly in the past five years. This has been due to a reduction in the number of conditions and increased focus on key areas that are necessary for reform, rather than including a large number of sectors with conditions related to reform. Previously the wide sector scope of programmes and the number of conditions had delayed disbursement as a result of a lack of GoR capacity to implement the complex reform programmes which underpinned these operations. For example, SAP II had 2 conditions for disbursement of the first tranche and 8 for the second tranche. The second tranche conditions related to institutional reforms and restructuring through privatisation that were not easy to implement within a year. This continued with PRSSP I, which had 5 first tranche disbursement conditions and 10 second tranche conditions. The second tranche was again delayed because of non-fulfilment of conditions as a result of limited GoR capacity to implement all the conditions imposed

Main Recommendations

Recommendation(s) to the Bank:

• For the Bank Group: There should be better integration of PBOs in the CSP with a closer analysis of how PBOs link with the overall programme and can assist in increasing the effectiveness of the programme. Related to this, consideration of the mix of aid instruments necessary for achieving national priorities and AfDB objectives also needs to be part of this process.

• Given that the AfDB perceives GBS as the main mechanism through which it supports PFM, more attention needs to be paid to engaging in dialogue related to this and supporting analytical work to complement the work of other donors. Funding through the government budget is only one aspect of supporting PFM through avoiding parallel systems and complementary inputs are also needed to strengthen PFM systems

• For the GoR: Given its preference for budget support and the fact that more of the country programme is likely to be in this form in the future it is necessary for staff to receive training related to the implementation of PBOs. This is particularly important as the skills needed to implement PBOs and engage in policy dialogue are very different from those required for projects.

• For the Bank Group: There is a need to invest more in analytical work in sectors where PBOs are operational. This would support work being undertaken by other DPs, but also give the AfDB more visibility and credibility as a development partner

• Project documents should outline the different design options for Bank interventions and consider which aid modalities would be the most effective in achieving goals