Extract of Agreement at Completion Point

Background and core learning partnership

The Southern Region Cooperatives Development and Credit Project (SOCODEP) was one of the first significant internationally funded projects in Ethiopia following the fall of the former Marxist-Leninist regime (the Derg) in May 1991. The Project aimed to respond to the then new legislation (Proclamation 85/1994) concerning Cooperatives, which set out a means of turning the former Producer Cooperatives into farmer-owned viable business entities serving their members' interests. In particular, it aimed to make rural finance (specifically micro-credit) available to so-called Service Cooperatives and their members.

The project was implemented in the Southern Nations, Nationalities and Peoples Regional State (SNNPRS), which is one of the four largest Regions in Ethiopia and is probably the most diverse Region in ethnic terms, and it contains some of the most remote and wettest parts of the country. SOCODEP was fully implemented from September 1994 until December 2005.

More specifically, the components funded by the International Fund for Agricultural Development (IFAD) (excluding the water, sanitation and health component) were implemented from September 1994 to July 2002, a total of nearly 8 years with the Mid-term Review (MTR) at the end of 1996.

Work on the Belgium Survival Fund (BSF) component (i.e., the one on water, sanitation and health) commenced in November 1998 and continued until the Project was finally closed in December 2005. The responsibility for implementing the project changed several times, but began with Southern Regional Agricultural Bureau (SRAB) and eventually migrated to the Bureau of Finance and Economic Development (BOFED). The evaluation of the project was conducted in late 2006/7 by IFAD's Office of Evaluation (OE).

Following usual practice for OE evaluations, a Core Learning Partnership¹ (CLP) was established providing critical inputs at key stages in the evaluation, including comments on the main evaluation deliverables.

Main evaluation findings

Design

The Project aim, as described in paragraph one, was an imaginative attempt to respond to the then new legislation concerning Cooperatives.  However, this was an ambitious and in hindsight an unrealistic goal.  A number of factors contributed to the difficulties faced by the SOCODEP. First, the Region's size, diversity, poor infrastructure and poverty posed numerous development challenges.  Second, the project underestimated the obstacles to and rate of beneficial change and the capacity of the government for implementation in the post Derg period. 

Quality of project delivery

SOCODEP concentrated on delivery of numerical outputs, such as  cooperatives restructured, credit disbursed, trainings delivered, drugs purchased, kilometres of road constructed, water points built, and so on. Insufficient emphasis was placed on the quality of these outputs. For example, insufficient consideration was given to the intensity and duration of activities required to achieve the desired quality standards. In particular, the human factor of individual and group (community, cooperative, institution) attitudes were addressed minimally. For example, the design was too optimistic about the speed with which the former model of cooperatives, centrally controlled by the government, could be turned around into a member-owned and member-controlled viable business model. To turn around a failing, politically-established cooperative to become a viable business serving its members, or to bring about community ownership and management of a water point demanded a great deal of attention to quality of the investment, not just numbers.

However, some of the activities such as upgrading of health facilities and training of staff and community health workers performed better. 

Relevance, effectiveness, efficiency

The project objectives and activities were relevant to needs of the rural poor in southern Ethiopia (e.g., in terms of the need for credit, improved market access, better health services and environmental health) and were consistent with the government's regionalization programme.

The Project was moderately ineffective achieving some, but not all of its objectives. Similarly, the project was moderately inefficient. Given the difficult operating environment in Ethiopia, the project could have been more efficient if it had been more realistic and had less ambitious objectives and coverage. The vast geographic area, poor infrastructure and communication meant that the projected resources were not optimally used.

Sustainability of the SOCODEP's benefits are unlikely to continue, partly due to the lack of a defined exit strategy. Moreover, institutional sustainability is limited and on-going access to credit, and water supply is not assured.

Innovation

At the time of design, SOCODEP's focus on cooperatives and credit represented a response to the apparent liberalization of national politics and economics, and to the change in cooperatives legislation.

Unfortunately, the country context changed rapidly and the design became less relevant given the new context. Despite the positive efforts at the MTR, the design adjustments were not adequate given the changing realities. On another issue, the BSF component introduced an effective monitoring and evaluation system, which however was not integrated into the other project components. As the project was overstretched and its components were not integrated, SOCODEP offered little opportunity for the learning being generated to be feed back into the project.

Hence, the evaluation considered the project to be moderately unsuccessful in terms of innovations, replicability and upscaling.

Policy dialogue

SOCODEP was largely responsive to policy changes and government-led restructuring. There is little evidence however of the project contributing to IFAD's effective engagement in policy dialogue in the country.

Participation

Probably the single greatest assurance of sustainability at the level of households and communities is through real commitment to beneficiary participation. However, the evaluation found that ensuring beneficiary participation in an area with a weak tradition of participation is challenging and requires greater commitment in terms of time and resources. As such, approaches which build on existing social capital (i.e., using indigenous Community Based Organizations), rather than working through structures imposed from above and outside the beneficiary communities, are most likely to succeed in the short and long term.

Integration

This evaluation report has highlighted at a number of points the lack of integration between the numerous stakeholders and components within SOCODEP. Although integration is not easy, particularly given the restructuring of government organs and redeployment of personnel, it is the only way to create synergies which can maximize the impact of limited budgets.

Management

The management model used by SOCODEP limited its effectiveness and responsiveness to rapid contextual changes that occurred during project implementation.  The Project Coordinator, attempted to harmonize and synchronize the work of several Government organs and other stakeholders over whom he has no real authority. And support from IFAD through supervision mission mounted annually by the designated cooperating institution the United Nations Office for Procurement Services (UNOPS) was insufficient. However, it should be recognized that during the time of SOCODEP, IFAD did not have modalities such as direct supervision or field presence to support project implementation. Although, IFAD was responsive in using the tools it had at the time, for example by undertaking an early and useful MTR and facilitating the inclusion during implementation of the important BSF component.

Weak linkages between partners during implementation

The linkages between the key stakeholders have mainly been achieved by the efforts of the Project Coordinators (four in total, at various stages of the Project), IFAD's Country Programme Manager (CPM), and UNOPS. The Project Coordinator's role was challenging because of his inherent lack of authority, and the CPM's role is distant from the day-to-day project management issues to do more than provide general support and guidance. Also, annual visits by a cooperating institution are insufficient to rescue an under-performing project. Consequently, the effectiveness of the partnership was limited. Partnership with the private sector was not a viable option in the early years of the Project, but this option could have been pursued as implementation progressed. The extent to which partnerships outside of the project were developed by the implementing stakeholders is limited.

Key recommendations agreed by partners

The following recommendations from the evaluation have been agreed upon by the GOE and IFAD.

Design

It is recommended that consideration be given to interventions which are far more focused in terms of numbers of beneficiaries to be reached and geographic coverage, within the overall framework of IFAD's targeting policy. This would ensure greater synergies across activities and ultimately deeper impact on rural poverty.  Similarly, the project duration should be long enough to achieve the desired results and in particular take into account the time needed to implement attitude and cultural changes. Project management structures should be kept simple to ensure the integration and harmonization among different implementing agencies.

Quality of project delivery

It is recommended that greater attention be given in future project design and implementation to country context issues, and the identification of indicators of quality, and actions necessary to achieve real and lasting impact, alongside those relating to numerical outputs.

Policy dialogue

It is recommended that more explicit attempts be made to engage in policy dialogue with Government and other development actors, where appropriate and required involving a wider range of national and international specialists, rather than just IFAD and cooperating institution staff.

Participation

It is recommended that future IFAD-funded projects and programmes in Ethiopia pay more attention to people's participation, especially as it has not been a tradition of development practice in Ethiopia in the past.

Integration

In future multi-component projects, it is recommended that greater attention be paid to the linkages between the components and between those agencies responsible for delivering them. The evaluation team is in favour of projects which involve multiple components addressing the diverse needs of target populations – but the difficulties of integrating such efforts should be carefully considered.

Management

Management is more than coordination or supervision, and it should be addressed with greater rigour in future projects and programmes particularly in challenging contexts as found in SOCODEP. Projects need to be much more decisively managed. It is recommended that new approaches be explored, either through IFAD itself taking a more hands-on role during execution, facilitated by the Fund's field presence officer, which allow closer monitoring and follow-up to implementation.

Role of the Field Presence Officer

The field presence officer can, among other tasks, provide implementation support to IFAD-funded operations and has the potential to enhance partnerships and policy dialogue in Ethiopia. Hence, the country presence should be further strengthened, so that it can play a greater role in enhancing IFAD's development effectiveness in Ethiopia.

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Members of the partnership included: Ministry of Finance and Economic Development, Bureau of Finance and Economic Development, Bureau of Agriculture and rural Development, SNNPRS, Department of Cooperatives, SNNPRS, Rural Womens Affairs Team, SNNPRS, Bureau of Health, SNNPRS, Bureau of Water Resources, SNNPRS, Planning and Programme Department, Rural Roads Authority, SNNPRS, Sodo Rural Technology Centre, Commercial Bank of Ethiopia, Omo Microfinance Institution, the Association of Ethiopian Microfinance Institutions, Former SOCODEP project Director, field presence officer , and the IFAD country programme manager.