How IFAD’s reforms on donor funds utilisation will affect project in West, Central Africa

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2 years ago

IN 2022, West and Central Africa experienced a rebound of economic activities that were well above expectations, following the devastating impact of the COVID-19 pandemic.

And strong economic growth is predicted in 2023 in several countries of the region, including Benin, Côte d’Ivoire, the Democratic Republic of Congo, Niger and Senegal.

However, in other countries, growth is expected to be more subdued and the social and economic hardships endured because of the pandemic have led to an increase in overall poverty. The war in Ukraine has accelerated increases in commodity prices in the region which had already been an issue. Addressing the complex drivers of fragility remains at the top of the policy agenda.

Currently, 10 countries in the region are in fragile and conflict-affected situations. The expansion of areas with situations of fragility in the Sahel is undermining the better than-expected economic growth achieved, and particularly threatens livelihoods in rural areas, where poverty rates are highest.

Recently, the Financial Management Division (FMD), the West and Central Africa Office, organised a Regional Training Workshop for IFAD-funded projects to discuss various reforms relating to Financial Management and Fiduciary Reforms within the division.

The central theme in FMD reforms has been the move to principle as compared to rule-based assurance, and analytical rather than transaction-based processing for disbursement to projects.

Over the last year, IFAD has made important progress on its ambitious suite of financial management and disbursement reforms.

In line with IFAD’s focus on strengthening efficiencies and improving service delivery to our clients, the new disbursement system introduced a streamlined processing of withdrawal applications (WAs), moving out of transactional monitoring (SOE reviews) to reviewing Interim Financial Reports (IFRs) as a basis for disbursement to all investment projects.

IFRs will include semi-annual cash forecasts based on project needs and approved work plans and budgets. IFRs also provide a more analytical basis for monitoring financial progress and financial management risks for the benefit of Project Delivery Teams.

The primary goal of the workshop training was to discuss and reinforce the capacity of stakeholders regarding significant FMD reforms – principally Interim Financial Reports (IFR). Disbursement FMD West and Central Africa initiatives such as the automation of the IFRs will also form the fulcrum of this event.

A wide range of participants from IFAD-funded projects, and other financial management stakeholders across anglophone countries in West and Central Africa including Coordinators, Finance Managers, Accountants, Internal and External Auditors from Supreme Audit Institutions, as well as representatives from Ministries attended.

This will be the first in-person workshop since 2019 and will be a great opportunity for participants to interact and share their experiences and best practices on the Financial Management and fiduciary assurance of the IFAD-funded projects.

The Country Director of IFAD, Mrs Dede Ekoue, said at the training that the contribution of IFAD to attaining the Sustainable Development Goals depends primarily on the successful implementation of IFAD-funded projects and programmes.

She said the FMD regularly organises training and exchange Sessions (face-to-face and remote) with the project fiduciary teams in order to provide effective and sustainable support for the financed projects.

“The primary objectives of the workshop are to discuss the practical implementation of the reforms (specifically the Interim Financial Report and disbursements); Train projects on the Use of the Financial Execution (FE) module of the IFAD Client Portal (ICP) for submitting financial reports and linking to Was; strengthen understanding of lFAD’s fiduciary management procedures; discuss key FMD-WCA themes and Issues identify obstacles encountered during project implementation and propose solutions to these obstacles.

She said that the current portfolio of IFAD’S West Africa and Central Africa Region consists of 62 programmes in 23 countries with a total financing amount of approximately USD 4 billion, of which IFAD contributes approximately $1.9billion.

She further stated that as part of the People, Processes, and Technology Plan, IFAD is implementing a more robust risk-based assurance methodology that encompasses both financial controls in currency disbursement and financial management, two of the most important factors influencing efficiency.

Ekoue said indicators relating to the scope of interventions, natural resources, environmental management, and climate change adaptation are typically met by IFAD-funded projects. Significant reforms have occurred in financial management, notably in financial reporting, disbursements, IT systems (ICP financial execution module, etc.), and the introduction of the Project Financial Management and Financial Control Arrangements Letter.

The Regional Financial Management Officer of IFAD, Tatah Austin, explained that IFAD has introduced a lot of reforms, especially with regards to disbursement over the past years, and the workshop is an opportunity for them to reinforce the capacity of the project in order to optimize these reforms and embed them in their financial management system so as to improve and ensure seamless disbursement for the project.

“IFAD is moving from a transactional based approach to analytical based approach with regards to how we analyse and provide disbursement to the project. So these reforms are based principally in terms of ensuring that the projects understand these reforms and also they are able to embed these reforms for the purpose of improving disbursement for their project”, he said.

A communiqué issued at the end of the training workshop said these reforms aim to enhance the efficiency and effectiveness of projects for greater impact on the livelihood of small-scale farmers, women, young people and other vulnerable groups living in rural areas.

It said the primary aim of the workshop was to strengthen the capacity of stakeholders of with a view to improving the quality of financial management of IFAD-financed projects and programmes.

The workshop built the capacity of 130 participants including Coordinators, Finance Managers, Accountants, Internal and external Auditors from Supreme Audit Institutions, as well as Ministries experts from Anglophone West and Central Africa (Gambia, Ghana, Liberia, Nigeria and Sierra Leone).

The Regional Director of IFAD West and Central Africa (WCA), Mr Bernard Hien represented by Mr Ahmed Tarek thanked the Federal Government of Nigeria for hosting this important international workshop. He congratulated Ministries experts, Government Auditors, Projects Coordinators and staff for their successful completion of the training and called on them to use the knowledge acquired for increased development impact and results in support of the food system transformation agenda.

IFAD WCA Senior Regional Financial Management Department Officer, Mr Radu Damianov, stressed his appreciation for the active participation of all stakeholders which was critical for achieving the objectives of the three-day workshop. Mr Daminanov indicated that the Financial Management Department in partnership with the Regional and Country offices will provide continuous technical advice to participants to accelerate the implementation of the financial reforms.

The communiqué further noted that the Permanent Secretary, Federal Ministry of Agriculture and Rural Development, Dr Ernest Umakhihe, who was represented by Mr Bukar Musa, Director Projects Coordinating Unit commended IFAD for the successful organization of this regional workshop which will contribute to scale up the impact of projects jointly funded by IFAD and Government on agriculture and food system transformation.

The Permanent Secretary therefore, invited all participants to continue collaboration and networking within and across West and Central Africa countries for continued exchange of knowledge and best practices and solicited the support of IFAD to pursue this south -south cooperation in financial management.

The workshop also provided avenue for participants to enhance their knowledge on efficiency and effectiveness in utilising donor funding and demonstrating value for tax payers money of countries contributing to IFAD.

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