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Document of The World Bank

Report No: ICR0000886

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA Grant No. H038-ET, IFAD Loan No. 4500)

ON A

CREDIT

IN THE AMOUNT OF SDR 22.0 MILLION (US$30.0 MILLION EQUIVALENT)

TO THE

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

FOR THE

PASTORAL COMMUNITY DEVELOPMENT PROJECT PHASE I

June 26, 2009

Agriculture and Rural Development Sustainable Development Department Africa Region

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CURRENCY EQUIVALENTS (Exchange Rate Effective December 2008)

Currency Unit = Ethiopian Birr

US$ 1.00 = Birr 9.93

FISCAL YEAR July 8 – July 7

ABBREVIATIONS AND ACRONYMS

AfDB African Development Bank APL Adaptable Program Loan CDD Community-Driven Development CBO Community-Based Organization CIF Community Investment Fund CDP Community Development Plan CBW Community-Based Worker DCA Development Credit Agreement DFID UK Department for International Development DPCF Disaster Preparedness and Contingency Fund DPPB Disaster Prevention and Preparedness Bureau (Regional) DPPC Disaster Prevention and Preparedness Commission (Federal) DPPO Disaster Prevention and Preparedness Office (zonal) EAMF Environmental Assessment and Management Framework EWS Early Warning System FAO Food and Agriculture Organization FPCU Federal Project Coordination Unit GoE Government of Ethiopia IDA International Development Association IFAD International Fund for Agricultural Development IGA Income Generating Activity JSDF Japan Social Development Fund MoA Ministry of Agriculture MoFA Ministry of Federal Affairs MOT Mobile Outreach Team MST Mobile Support Team NGO Non-Governmental Organization PAD Project Appraisal Document PASDEP Plan for Accelerated and Sustained Development to End Poverty 2005-2010 PCDP Pastoral Community Development Project PIM Project Implementation Manual PLA Participatory Learning and Action (Methodology) PM&E Participatory Monitoring and Evaluation (System) PRA Participatory Rural Appraisal QAE Quality at Entry QAG Quality Assurance Group RPCU Regional Project Coordination Unit SNNPR Southern Nations, Nationalities and Peoples Region WDC Woreda Development Committee

Vice President: Obiageli Katryn Ezekwesili

Country Director: Kenichi Ohashi

Sector Manager: Karen Mcconnell Brooks

Project Team Leader: Assaye Legesse

ICR Team Leader: Malathi Jayawickrama

ETHIOPIA PASTORAL COMMUNITY DEVELOPMENT PROJECT PHASE 1

CONTENTS Data Sheet A. Basic Information i B. Key Dates i C. Ratings Summary i D. Sector and Theme Codes ii E. Bank Staff ii F. Results Framework Analysis ii G. Ratings of Project Performance in ISRs ix H. Restructuring (if any) x I. Disbursement Profile x 1. PROJECT CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN 1 1.1 Context at Appraisal ..................................................................................................... 1 1.2 Original Project Development Objectives (PDO) and Key Indicators ......................... 2 1.3 Revised PDO and Key Indicators, and reasons/justification. ....................................... 2 1.4 Main Beneficiaries ........................................................................................................ 2 1.5 Original Components .................................................................................................... 2 1.6 Revised Components .................................................................................................... 3 1.7 Other Significant Changes ............................................................................................ 3 2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES 4 2.1 Project Preparation, Design and Quality at Entry ......................................................... 4 2.2 Implementation ............................................................................................................. 5 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization .............. 8 2.4 Safeguard and Fiduciary Compliance ........................................................................... 9 2.5 Post-completion operation/next phase ....................................................................... 11 3. ASSESSMENT OF OUTCOMES…………………………………………………… 11 3.1 Relevance of Objectives, Design and Implementation ............................................... 11 3.2 Achievement of Project Development Objectives ...................................................... 12 3.3 Efficiency .................................................................................................................... 17 3.4 Justification of Overall Outcome Rating .................................................................... 17 3.5 Overarching Themes, Other Outcomes and Impacts .................................................. 18 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops ........... 19 4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME....................................19

5. ASSESSMENT OF BANK AND BORROWER PERFORMANCE ......................... 20 5.1 Bank Performance ……………………………………………………………… 20 5.2 Borrower Performance ............……………………………………………………... 22 6. LESSONS LEARNED…...………………………………………………………..... 23 7. COMMENTS ON ISSUES RAISED BY BORROWER/IMPLEMENTING AGENCIES/PARTNERS ..………………………………………………………….. 24 ANNEX 1. Project Costs and Financing ……………………………………………… 25 ANNEX 2. Outputs by Component …………………………………………………… 26 ANNEX 3. Economic and Financial Analysis ………………………………………… 42 ANNEX 4. Bank Lending and Implementation Support/Supervision Process ……….. 46 ANNEX 5. Beneficiary Survey Results ………………………………………………. 48 ANNEX 6. Stakeholder Workshop Report and Results……………………………….. 54 ANNEX 7. Summary of Borrower’s ICR……………………………………………… 55 ANNEX 8. Comments of Cofinanciers………………………………………………… 67 ANNEX 9. List of Supporting Documents ……………………………………………. 68

i

A. Basic Information

Country: Ethiopia Project Name: Pastoral Community Development Project

Project ID: P075915 L/C/TF Number(s): COFN-04500,IDA-H0380,TF-52888

ICR Date: 06/29/2009 ICR Type: Core ICR

Lending Instrument: APL Borrower: GOVERNMENT OF ETHIOPIA

Original Total Commitment:

XDR 22.0M Disbursed Amount: XDR 21.6M

Environmental Category: B

Implementing Agencies: Ministry of Finance and Economic Development Ministry of Federal Affairs Cofinanciers and Other External Partners: International Fund for Agriculture Development (IFAD) B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 04/16/2002 Effectiveness: 09/30/2003

Appraisal: 02/18/2003 Restructuring(s):

Approval: 05/20/2003 Mid-term Review: 06/05/2006 06/30/2006

Closing: 12/31/2008 12/31/2008 C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Unsatisfactory

Borrower Performance: Moderately Unsatisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Unsatisfactory

Quality of Supervision: Moderately Unsatisfactory

Implementing Agency/Agencies:

Moderately Unsatisfactory

Overall Bank Performance:


Overall Borrower Performance:


ii

C.3 Quality at Entry and Implementation Performance IndicatorsImplementation

Performance Indicators

QAG Assessments (if any)

Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA):


Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Moderately Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

General agriculture, fishing and forestry sector 70 70

Other social services 30 30

Theme Code (as % of total Bank financing)

Natural disaster management 33 12

Other environment and natural resources management 17 12

Participation and civic engagement 33 65

Water resource management 17 11 E. Bank Staff

Positions At ICR At Approval

Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo

Country Director: Kenichi Ohashi Ishac Diwan

Sector Manager: Karen Mcconnell Brooks Karen Mcconnell Brooks

Project Team Leader: Assaye Legesse Daniel M. Sellen

ICR Team Leader: Malathi S. Jayawickrama

ICR Primary Author: Malathi S. Jayawickrama

J. R. Deep Ford F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) For selected woredas in pastoral areas, to provide capacity-building and establish effective models of public service delivery, investment, and disaster management that address communities' needs and reduce their vulnerability.

iii

Revised Project Development Objectives (as approved by original approving authority) Not Applicable (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Funds allocated to the community Investment Fund (CIF) were used for approved community micro-projects and inter-community sub-projects

Value quantitative or Qualitative)

0 At least 80% 100%

Date achieved 09/30/2003 09/30/2003 09/30/2008 Comments (incl. % achievement)

CIF was overcommitted, with 25% of CIF subprojects remaining incomplete.

Indicator 2 : Funds allocated to the Disaster Preparedness and Contingency Fund were used for approved sub-projects


0 At least 80% 100% of revised allocation


95% of IDA allocation under the DPCF disbursed, though most in response to emergency and not based on Disaster Preparedness and Contingency Plans (DPCPs).

Indicator 3 : At least 75% of community subprojects requiring government support receive it in a timely and adequate fashion, as measured by beneficiary assessments.


0 75%

82% of the Beneficiary Assessment participants indicate they received capacity building training


Indicator 4 : At least 75% of the results of participatory monitoring and evaluation (PM&E) meetings are used in decision-making for community investments, pastoral risk management plans, and other project activities, as measure by M&E reports


PM&E was developed but not implemented. There is evidence of community

iv

decision making for investment in most areas, the most exceptions being in the Somali region.

Date achieved 09/30/2008 Comments (incl. % achievement)

Although the PDO was not achieved, there is evidence of community decision-making for investment in most areas, the most exceptions being in the Somali region.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Increased delegation of authority to woredas, kebeles and communities

Value (quantitative or Qualitative)

0

Refresher training and capacity building support for the 460 kebele development committees is completed

The project established 32 woreda development committees, which are functional. 592 kebele project management committees have been established and are operational. 97% of informants in Beneficiary Assessment confirm that community development plans were


Indicator 2 : Existence and use of transparent, accountable, demand-driven and decision-making processes at community level


0

90 percent of Beneficiary Assessment participants indicate that capacity building enhanced empowerment.

Date achieved 09/30/2003 03/31/2009

v

Comments (incl. % achievement)

Indicator 3 : Broader representation of hitherto marginalized groups in local affairs


0

Beneficiary Assessment reports the enhanced participation of women and youth in local affairs.

Date achieved 09/30/2003 09/30/2008 Comments (incl. % achievement)

Indicator 4 : Number of Community Development Plans (CDPs) developed and approved. Value (quantitative or Qualitative)

0 500 CAPs were prepared at kebele level.


Indicator 5 : Number of micro-investments and inter-community sub-projects executed


0

1357 total subprojects executed, 1025 of these have been completed and 332 are ongoing.


Indicator 6 : New technologies developed and existing technologies adapted to local conditions.


0

6 new crop and forage varieties developed. These were introduced to 780 agro-pastoral communities.


Indicator 7 : Technology adoption rate. Value (quantitative

0 Not measured

vi

or Qualitative) Date achieved 09/30/2003 06/30/2008 Comments (incl. % achievement)

Indicator 8 : Literacy Rates. Value (quantitative or Qualitative)

not measured Not measured.


Indicator 9 : Access and use of mobile and stationary health and education services. Value (quantitative or Qualitative)

0 Not measured


No mobile services were supported. The project constructed and rehabilitated 203 schools and 214 health and animal health posts.

Indicator 10 : Training Program Completed.


0

3174 Community Based Workers in animal health, community education and traditional birth attendants were trained.


Indicator 11 : Research contracts granted.


0

There were no research contacts granted during this phase.


Indicator 12 : Timely delivery of remote sensed information to woredas. Value (quantitative or Qualitative)

0 Not achieved.

Date achieved 09/30/2003 09/30/2008

vii

Comments (incl. % achievement)

Indicator 13 : Food security assessment applied in threatened areas.


0

Not achieved. The EWS in Somali was expanded to project woredas in Oromia and SNNPR and the livelihood baseline data were collected for all woredas.


Indicator 14 : Disaster Plans implemented. Value (quantitative or Qualitative)

0 Not achieved but 23 DPCPs were prepared.


Indicator 15 : Cereal stocks used when necessary. Value (quantitative or Qualitative)

0 Not achieved.


Indicator 16 : Number of regional plans developed and approved.


0

23 woreda disaster preparedness and contingency plans are ready to be used.


Indicator 17 : Number of investments executed.


0

The DPCF financed 447 disaster preparedness and contingency subprojects.

viii


Most investments identified and completed before DPCPs were completed.

Indicator 18 : Frequency of reports.


0

Quarterly progress reports have been prepared on the financial and technical activities of the project.


Indicator 19 : Accuracy of reports. Value (quantitative or Qualitative)

0 Partially achieved.


Indicator 20 : Number of policies promulgated and effectively implemented.


The project finalized several studies including a Pastoral Policy Gap Analysis (2007), which served as a basis for GoE to prepare and implement pastoral policies.


This indicator has been achieved by GoE outside of project resources.

Indicator 21 : Effective advocacy of pastoralists at all levels of government.


The Ethiopian Pastoralist Development and Governance Network was established to provide a forum for policy discussion on various issues of pastoral

ix

development.


Indicator 22 : Clear vision and strategy for pastoral development.


The project finalized several studies including a Pastoral Policy Gap Analysis (2007) and a social analysis, which served as a basis for the GoE to prepare its Pastoral Area Development Strategy. It will be adapted by regions in the second phase.


Indicator 23 : Adoption of transparent and inclusive planning and development activities in regions.


Partly achieved. Coordination was acceptable, but there were several issues with transparency of funds allocation (as discussed in the ICR text, Section 2.2).


G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual

Disbursements (USD millions)

1 10/22/2003 Satisfactory Satisfactory 0.00 2 11/20/2003 Satisfactory Satisfactory 2.00

x

3 06/02/2004 Satisfactory Satisfactory 2.28 4 12/10/2004 Satisfactory Satisfactory 4.01 5 05/23/2005 Satisfactory Satisfactory 5.24 6 10/04/2005 Satisfactory Satisfactory 10.59 7 03/27/2006 Satisfactory Satisfactory 19.78 8 08/25/2006 Satisfactory Satisfactory 23.69 9 03/27/2007 Moderately Satisfactory Moderately Satisfactory 28.64

10 11/30/2007 Moderately Satisfactory Moderately

Unsatisfactory 30.99

11 03/26/2008 Moderately Satisfactory Moderately Satisfactory 31.71 12 09/25/2008 Moderately Satisfactory Moderately Satisfactory 31.71 13 12/24/2008 Moderately Satisfactory Moderately Satisfactory 31.71

H. Restructuring (if any) Not Applicable

I. Disbursement Profile

1

1. PROJECT CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN

1.1 Context at Appraisal

1. About 93 percent of Ethiopia’s pastoral area population depends directly on livestock for subsistence. Pastoralists earn an annual per capita GDP of about US$100 and are among the poorest.1 They inhabit the peripheral lowlands, which are drought prone and classified as marginally arable and non-arable lands that cover 500,000 km2, or roughly 61 percent of the land surface. Pastoralism is extensively practiced in the Afar and Somali Regions, and in some zones of the Oromia Region, and the Southern Nations, Nationalities and Peoples Region (SNNPR). These lowlands include over seven million people and eleven million animals--the largest livestock population in Africa. 2. Pastoral livelihood systems were under increasing stress. Pastoralists not only lived in an ecologically hostile environment, but also had meager social services and physical infrastructure, and were poorly connected to the more developed areas of Ethiopia. Many factors impeded pastoral livelihoods: nonexistent or poorly planned stock routes and watering points for livestock; animal health services that rarely extended beyond lowland woreda (district) boundaries; poor human health services; educational services that reached less than one-fifth of pastoralists, limiting prospects for livelihood diversification; and virtually non-existent agricultural advisory services, especially for helping agro-pastoralists. Ethiopia’s lowland pastoralists had often faced the challenge of periodic drought. However, as rangeland degradation worsened, driven by mounting human and livestock population pressure and an apparent increase in the frequency of drought, the capacity to cope with drought had declined to a point where the survival of viable pastoral productions systems was under threat. 3. The Government of Ethiopia (GoE) acknowledged the need to redress the national development balance that had traditionally favored the highland areas. GoE also recognized that past experience in pastoral areas, which emphasized livestock and rangeland management had been largely unsuccessful, and that a new approach consistent with a more holistic view of lowland communities was needed. GoE reiterated its strategy for pastoral development in several programs including in the Sustainable Development and Poverty Reduction Program (2002). 4. The World Bank assisted GoE in preparing the Pastoral Community Development Program (PCDP)--a 15-year, three-phase Adaptable Program Loan (APL). PCDP related to the central features of GOE’s Rural Development Strategy for pastoral areas by promoting an integrated and holistic approach that focuses on people, not merely their animals or the rangeland that they inhabit. Phase I of PCDP (2003-08) aimed to: (i) help pastoral livelihoods through economic and social development investments owned and managed by communities and local governments; (ii) protect these livelihoods and reduce risks faced by pastoralists by improving the knowledge of pastoral economies and coping mechanisms; and (iii) strengthen policies that promote pastoral area development. PCDP I, (financed with an IDA grant of US$30 million equivalent and co-financed by IFAD with a loan of US$20 million) was approved on May 20, 2003 and became effective on September 30, 2003.

1 Pastoralists derive more than 50 percent of their income from livestock and livestock products. Agropastoralists derive less than 50 percent of their income from livestock and livestock products, and most of the remaining income from cultivation (Customary Pastoral Institutions Study, March 2007).

2

1.2 Original Project Development Objectives (PDO) and Key Indicators

5. The PDO in the PAD was, for a selected set of woredas, to provide capacity-building and establish effective models of public service delivery, investment, and disaster management in pastoral areas that address communities' needs and reduce their vulnerability.2 6. The Key Performance Indicators (KPIs) -- The project was considered to be successful if in targeted communities and woredas: (i) at least 80 percent of funds allocated to the Community Investment Fund (CIF) are used for approved community micro-projects and inter-community sub-projects; (ii) at least 80 percent of funds allocated to the Disaster Preparedness and Contingency Fund (DPCF) are used for approved sub-projects; (iii) at least 75 percent of community sub-projects requiring government support receive it in a timely and adequate fashion, as measured by beneficiary assessments; and (iv) at least 75 percent of the results of participatory M&E (PM&E) meetings are used in decision-making for community investments, pastoral risk management plans, and other project activities, as measured by M&E reports.3

1.3 Revised PDO and Key Indicators, and reasons/justification. Not Applicable. 1.4 Main Beneficiaries 7. The main beneficiaries included 450,000 rural households (where the average household consisted of 5-12 people) in pastoral and agropastoral communities in 30 woredas of the Afar, Somali, SNNP and Oromia Regions. This represented about one-third of pastoral and agropastoral woredas in the four Regions.4 Beneficiaries included female-headed households (about 20 percent) and a limited number of destitute refugees dependent on food aid, especially where traditional social safety net mechanisms had failed. Ultimately, the program was expected to enhance the well-being of potentially several million people living throughout the rangelands. Woreda selection criteria stressed equitable selection across zones that had a minimum level of human resource capacity and access, and avoidance of woredas where other donors were active. Secondary beneficiary groups were community associations and local and regional governments. 1.5 Original Components

8. Component 1: Sustainable Livelihoods Enhancement (SLE) (US$36.52 million) sought to establish decentralized and participatory planning procedures at the kebele (sub-district) and woreda (district) levels, operating within the regional government structure. This was to enable pastoralists to identify, design and implement community driven micro-projects that reflected their development priorities. Sub-components included: (i) Capacity Building, where project-supported Mobile Support Teams (MSTs) would work with woreda administrations and their technical and social support offices to train communities, using participatory learning and action (PLA) tools to design local development projects; (ii) the Community Investment Fund (CIF), to provide funding to enable quick execution of community-prepared and WDC-appraised sub-projects according to agreed measures; and (iii) Support Services, to finance infrastructure investments and strengthen public service delivery at regional and woreda levels, and support research activities.

2 This differs from the PDO in the Development Credit Agreement (DCA), which states, “…reduce their vulnerability and contribute to overall poverty alleviation in the territory of the Recipient”. 3 PAD Annex 1 (Project Design Summary) lists KPIs (i)–(iii). (iv) is an indicator under Component 3. 4 PCDP started in 30 woredas. Later, two of these woredas (Miyo--a part of Dirre in Oromia, and Chinaqsen--a part of Jijiga in Somali) attained woreda administration status, raising the number of PCDP woredas to 32.

3

9. Component 2: Pastoral Risk Management (US$16.43 million) aimed to improve drought preparation through steps to mitigate risk and reduce vulnerability. Subcomponents included: (i) Community-Based Early Warning System (EWS), to build on ongoing efforts of the federal Disaster Prevention and Preparedness Commission (DPPC) and NGOs to establish (at woreda level) the collection and analysis of basic household welfare data using a pastoral production systems survey instrument. The EWS was to provide the information to assign each participating woreda to one of five "warning stages" (normal, alert, alarm, emergency and recovery situations) with appropriate responses to each stage; (ii) Disaster Contingency Planning, to invest in capacity at woreda and regional levels to prepare Disaster Preparedness and Contingency Plans (DPCPs) including both mitigation activities and rapid response activities, monitor local disaster indicators, and manage disaster response funds; and (iii) Disaster Preparedness and Contingency Fund (DPCF), to provide the woredas with grants to finance activities identified in their DPCPs. An acceptable plan, including documentation of participatory process and environmental assessment, if applicable, was to be a condition for the release of funds.

10. Component 3: Project Support and Policy Reform (US$7.01 million) was to provide operational and training support to the Federal Project Coordination Unit (FPCU) in Addis Ababa and Regional Project Coordination Units (RPCUs) in the regions. Sub-components included: (i) Project Support and Coordination, to ensure that the FPCU and RPCUs would effectively perform the following functions: fiduciary obligations; policy analysis and liaison with stakeholders; multisectoral coordination at the federal and regional levels; project communication; project monitoring; and mobilization of technical backstopping; (ii) Monitoring and Evaluation, (M&E) to finance: an aggregate-level Management Information System (MIS); and a local-level system that combines community-derived impact assessments of sub-projects with a data base that tracks pastoral livelihoods at the woreda and regional levels. The M&E system was to provide timely feedback to program management on the effectiveness of interventions in reaching the intended beneficiaries. The communication program was to disseminate program information and results using a variety of media; and (iii) Policy Analysis and Reform, to address policy and institutional reforms (mainly targeted studies, training and outreach) to improve pastoral livelihoods and reduce risk. Funds were to be earmarked for strategic policy work at the regional and federal levels. 1.6 Revised Components. Not Applicable. 1.7 Other significant changes 11. Amendments to the DCA and the Reallocation of Funds. The DCA dated June 12, 2003 was amended three times. The first was on November 11, 2005, to allow an increase in the Authorized Allocation from US$5m to US$6m, to be deposited into the Special Account. The second amendment was on September 20, 2006, following the June 2006 mid-term review (MTR). As rising costs of basic construction materials (cement, steel and their products) and community demand for facilities of reasonable quality were making it difficult to stay within the initially established budget caps for community-based development activities, the DCA was amended to: (i) increase the budget ceilings for community sub-projects from US$15,000 to US$30,000, and for inter-community sub-projects from US$75,000 to US$100,000 to accommodate price fluctuations and remote sub-project sites; (ii) reallocate the grant proceeds from less active to more active expenditure categories under Schedule 1; and (iii) lift the aggregate threshold for National or International Shopping to encourage local and international procurement of needed items. The third amendment was on September 18, 2007. As PDCP I was the major source of tangible investment in these marginalized areas, beneficiary community and local government demand

4

exceeded the originally anticipated demand for micro projects. The DCA was amended to increase Category 5 (community grants) of the SLE component by SDR 2,550,000. 12. Cancellation of IDA Grant funds. Post Procurement Reviews (PPRs) in February 2007 and November 2007 identified two sets of misprocurement: in Somali (on four contracts); and at federal level (on one contract, sliced into three by FPCU, inconsistent with Bank procedures), and occurrences of fraud. Management and the Department of Institutional Integrity were informed. On February 1, 2008, the Bank formally notified GoE of the cancellation of SDR 142,274 (US$190,858) from the IDA Grant, and requested reimbursement of the amounts disbursed against these contracts. The Grant Agreement Schedule 1 was revised to represent the cancellation (of SDR 73,606 from the Goods Category and SDR 68,668 from Consultant Services and Audits).

2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES

2.1 Project Preparation, Design and Quality at Entry 13. The Bank responded promptly to GoE’s request to donors to reduce the information gap on pastoral development, and Bank staff worked closely with donor s and research programs on rangeland management issues. In collaboration with IFAD and FAO, the Bank undertook Economic and Sector Work (ESW) in FY01, which evolved into the FY03 operation. Project preparation involved a strong Bank team, with IFAD participating in project design, pre-appraisal and appraisal. FAO also played a major role during preparation. The Japan Social and Development Fund (JSDF) approved a grant (US$1.88 million) to GoE in October 2003 as complementary financing. DFID played a key role in promoting dialogue among pastoral parliamentarians and other stakeholders, and AfDB committed grant funds for a pastoral study. PCDP also consulted with the International Livestock Research Institute to seek help on disseminating new technologies and drought preparedness strategies. 14. The Bank discussed project proposals in workshops with key stakeholders at preparation, pre-appraisal, and appraisal, and consulted with pastoral communities in Somali and Afar, the Borana Zone of Oromia and South Omo in the SNNPR. During preparation, PCDP also undertook several NGO-facilitated meetings with community leaders in the planned project areas. 15. PCDP’s general design reflected innovative responses to lessons from pastoral development experience, mainly by embracing an integrated and holistic approach. First, in incorporating a CDD approach the project emphasized the importance of decentralization and community empowerment. This was the first time a CDD approach was attempted in Ethiopia and was a considerable innovation for the GoE. Second, through flexible funding mechanisms to finance community identified and implemented interventions, it sought to promote ownership and sustainability of the development process. Third, the program’s multi-phase design recognized the lengthy process of pastoral area development, and that better integration of pastoral communities into the national economy would be more likely through a longer-term approach.

16. PCDP’s expenditure-linked KPIs, however, were a fundamental shortcoming in design, and appear to have focused implementation efforts on maximizing the speed of fund disbursement at the expense of quality and efficiency. This is particularly so given the commitment to a CDD approach that was new and needed time and effort to take root in such traditional and disadvantaged communities. Sufficient time for training and analysis to precede decision making and implementation would be major concerns given this design element. The first two KPIs did not particularly encourage giving time to communities to prioritize, plan, implement and monitor their development activities in a learning-by-doing manner. Rather, they seem to have

5

reinforced the reported “tendency for a strong push from the top to disburse funds quickly”, and the FPCU’s enthusiasm to show sub-projects on the ground to win the confidence of communities, without regard to the speed with which pastoralists could cope, nor the sufficiency of funds to complete and operationalize approved sub-projects.5 17. PCDP’s design should have paid more attention to sustainability of its activities. This concern is applicable to all three components. Under the SLE component, the design did not sufficiently address how the CDD process might be institutionalized, through continuous training and capacity building for communities and other stakeholders, rather than a one-off Participatory Rural Appraisal and PLA exercise (MTR Aide Memoire, July 2006, and GoE ICR, p. 35-37). Under the second component, the DPCF manual with rules and procedures to manage the fund should have been stressed as an important project startup activity. Under the third component, studies to guide public policy in pastoral communities should also have been undertaken at the start of project with the remainder of implementation contingent on their findings. The relevance of these studies to change livelihoods remains under question (M&E Report, MOFA, April 2006). 18. Late changes (at appraisal) of the anticipated project executing agency from the Ministry of Agriculture (MoA) to the Ministry of Federal Affairs (MoFA) undermined readiness for implementation. This introduced administrative and technical concerns related to project execution. MoA was more decentralized and experienced on pastoral development issues, and was committed to participatory efforts. MoFA was new, and, by its own admission, was more “an agency that pulls federal resources to states” than a project implementing agency (Sixth Quality at Entry Assessment, QAE6, July 2003). MoFA’s management also seemed to favor the settlement of pastoralists (ICR Mission interviews, June-July 2008, QAE6). This sudden change in the executing ministry disrupted the momentum of building implementation capacity and getting staff in place. It also may have made the project more susceptible to political influences not fully reflected in the risk ratings in the PAD. 19. Baseline study results and the Project Implementation Manual (PIM) should have been key tools for successfully launching the project, especially given the new CDD approach. The PIM (finalized only as an effectiveness condition) should have been associated with a baseline survey that facilitated targeting, measuring and evaluating implementation activities and results. This was even more important given the expenditure-oriented KPIs. Essentially, the lack of impact indicators being central to the design affected both the process of the project (CDD planning and involvement of communities themselves in identifying meaningful impact indicators, which may differ across regions and districts) and evaluation of its performance. 20. Quality Assurance Group Ratings: (detailed in Section 5.1.) Quality at Entry (Stage 1) rating = 4 (Moderately Unsatisfactory, on the revised 6-point rating scale); July 23, 2003. 2.2 Implementation

21. Overall implementation of PCDP was mixed, and varied by region and by component. Oromia (78 percent) and SNNPR (85 percent) performed better in completing executed projects (Annex 2, Table 3). In Somali, the equivalent number was 69 percent. From a component standpoint, there was a vast difference between the amount and effectiveness of activities carried out under Component 1, which was relatively well done, compared to Components 2 and 3. Under Component 2, interventions were not sequenced as they should have been, and under Component 3,

5 Aide Memoire, November 2004. See Aide Memoire, Nov. 2007 and ISRs of November 2007, March 2008.

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M&E was very weak and policy studies were generally not completed. Several activities under these two components seem to have been implemented in a rushed and ineffective manner between the MTR and project closing in order to satisfy the Phase 1 triggers. 22. Despite limitations, MoFA and the FPCU made good efforts to implement a demanding project. The CDD approach was generally unfamiliar in Ethiopia and to a new Federal Ministry. Nevertheless, reasonable coordination among project units (from federal to woreda) resulted in benefits that were clearly valued by pastoralists. The management and implementation structures that are now in place should serve as a foundation for continued efforts to overcome the challenges faced by pastoral communities, especially the lack of income earning opportunities.

23. PCDP conducted useful community capacity building in the first year, but attention to its institutionalization and sustainability was insufficient. Some communities learned how to be responsible for their development processes through participatory methods. This was a major change from past, less decentralized efforts to promote area development. However, continuous training, responsive to community needs identified during implementation, was not sufficiently addressed, and as a result the introduction of CDD processes fell short of the high expectations set. One fact that demonstrates this is that, as proposed in the PIM, MSTs were not camping with pastoralists for 10-15 days to provide the consultation and training activities. This would have enabled even greater changes in attitude and practice, and better quality and value of outcomes.6 24. Hasty project approvals resulted in increased rates of disbursement in 2004-06, which introduced fiduciary challenges and difficulties for sectoral actors to provide staff/equipment resources necessary to ensure service delivery.7 The previous PCDP management, concerned with low disbursement rates in the first year, launched an aggressive campaign among communities to use project resources. In this push for rapid disbursement, the perception developed that all projects would be financed as long as they met the defined set of criteria. No consideration was given to the balance available in the CIF when approving sub-project requests. Furthermore, no indicative annual budget ceilings were defined and provided for the RPCUs and woredas. By the end of PCDP’s fourth year, about 91 percent of the available budget had been spent. This issue was not picked up until the MTR. Some 25 percent of the sub-projects could not be completed due to lack of funds—a major efficiency loss. It also reduced the confidence in PCDP among beneficiaries and contractors who were waiting for their payment (IFAD Country Programme Evaluation, June 2008, p. 29). Regions were advised to abandon projects that were at a low level of performance, and, in Oromia and SNNPR, construction of several ongoing projects was discontinued. Although Regional Bureaus were to give priority to projects that were in the completion stage, this could not be realized as the disbursed finances were used to settle payments on the already implemented projects. The anticipated implementation improvements were insignificant (2007/2008 2nd Quarter Progress Report of PCDP Activities, January 2008, p. 18).8

6 Community training on how to be inclusive in planning, drawing up proposals, and evaluating their activities have been too short. MSTs and MOTs have spent little time with the communities to begin the CDD process. At least in Oromia and SNNPR they have not followed the PIM procedures of camping for 10-15 days to work with a community (MTR, Aide Memoire, Annex 6.1). 7 See ISR write-up and Country Director’s comments in ISR, March 26, 2008. 8 Also see, “…the push to expand within three years to 516 kebeles in 32 woredas and to increase disbursement of project funds, combined with constraints on MST field allowances in some regions, appears to have compromised the quality and inclusiveness of planning and approval procedures in some cases, and stretched the capacity of MSTs to train WDC and community stakeholders, as well as to supervise CIF implementation adequately” (Aide Memoire, November 20, 2007, p. 16).

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25. Weak procurement supervision, (i.e. limited transparency in fund allocation, lack of accountability at woreda level) affected implementation (see paras. 43 and 44 on Fiduciary Compliance). In Somali, the mandate of the communities to participate, negotiate, control and use resources for their needs was violated by woreda administration officials.9 This issue raised significant concerns about the appropriate (transparent) use of resources towards the agreed PDOs. 26. Repeated delays in moving forward on the Japan Social Development Fund set back efficient and effective implementation of capacity-building activities in civil society oversight, and training of NGOs, CBOs and local governments in using PM&E as a tool in development planning. The JSDF grant was to secure the participation of NGOs to help build capacity among the PCDP communities to better place them to take advantage of the opportunities offered through PCDP. Pastoral Forum Ethiopia, an NGO, was the recipient of the Grant. The agreement was signed in November 2004 after a 13-month wait, but further delays in opening the special account and in agreeing on signatories and management modalities of the grant led to JSDF activities commencing only in September 2006, after PCDP had almost exhausted its resources.

27. Lack of clear leadership and policy coherence in GoE affected the Risk Management component. Following GoE reorganization in 2005, the DPPC was renamed the DPPA and placed under the auspices of the MoA. The restructuring changed the mandate of the former DPPC to lead this task as specified in the PAD and PIM. The new DPPA was reluctant to assume its responsibilities. The absence of a clear mandate to host the component, and poor coordination between DPPA and PCDP at all levels delayed the establishment of the EWS and the woreda-level Disaster Contingency Plans. The DPCF utilization manual was never prepared. The DPCF, however, was utilized (contrary to the principles outlined in the PIM) to finance shelf projects on ad-hoc basis in both PCDP and non-PCDP woredas. The Bank halted this investment until ongoing projects were evaluated. Later, the MoFA and the FPCU in cooperation with Regional Disaster Preparedness and Prevention Bureaus took the lead to proceed with this task. 28. High turnover of staff at the federal and regional levels contributed to delayed and/or partial implementation. The turnover compromised the efficiency of training investments and hampered institutional learning: FPCU’s Project Coordinator departed in March 2007 and was replaced only in January 2008; long vacancies in the Coordinator positions in SNNPR and Afar undermined implementation momentum; the departure of two FPCU M&E specialists left PCDP with no specialist for some time; and frequent staff changes at woreda level slowed project activities and necessitated re-training, which was difficult to arrange (MTR Aide Memoire, Annex 6.1). Moreover, other regular assignments for MOT members affected their attention to PCDP-related work. Overall, the institutionalization of CDD processes and the spread of this practical approach throughout and beyond PCDP could have been greater without this limitation. It also led to inadequate follow-up and technical support on fiduciary aspects of the project. 29. Profitability, growth and sustainability of income generating activities (IGAs) were not sufficiently emphasized during implementation. As a result a number of IGAs were established that were not economically viable, not being able to consistently cover costs of operation and maintenance. In some instances there has been inadequate attention to markets and especially market prices, resulting in IGAs charging of lower prices than reasonable on the market. There has also been almost no follow-up business management assistance as might be related to how to distribute and reinvest earnings (Assessment of IGAs, May 2008).

9 Operational Review of PCDP in Somali Region Mission report, June 2007.

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30. The lack of a systematic communication strategy with the government structure and among staff of project coordination units limited implementation. Attempts to develop an MIS to enable FPCU, RPCU and woredas to exchange information were not successful (GoE ICR, p. 39). This affected participation in program activities and sharing of training materials with relevant stakeholders as planned. Information about the strategy was not available in a form that could be easily shared and understood, for example, in local languages. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 31. Design and staffing failures undermined the creation and use of an effective M&E system. The KPIs were not well linked to the PDO. The first two KPIs measured fund disbursement, when the PDO was to provide capacity building and establish effective models of public service delivery, investment and disaster management. The fourth KPI focused on capacity building and the extent of use of PM&E methods in decision-making. However, the PM&E system that was intended to be responsive to the realities on the ground, and required involvement of relevant stakeholders, was not implemented, and the intended objectives were not achieved. (GoE ICR, p. 39).

32. The lack of baseline indicators to provide insights and structure to the project’s M&E system further weakened M&E implementation. Baseline surveys (without control groups) of 25 woredas were conducted in the third year of PCDP; however, their use was limited in the absence of follow-up surveys of these communities for comparison. 33. In August 2005 it became evident that the M&E system was too output focused and that the delay in developing and using outcome indicators was affecting implementation. Twelve outcome indicators were suggested during the MTR, but despite discussions with regional M&E officers, the data were not compiled. Staffing issues did not help this situation. 34. PCDP was not able to use PM&E feedback to identify and take suitable remedial measures, as there were no standard reporting formats, especially at woreda level to be aggregated at regional level (except Community Action Plans and annual plans for office purposes), and the PM&E systems were not included in the decision-making process. At woreda level, although the WDC was responsible for project monitoring, the system relied on MSTs and MOTs, and regional M&E officers. As a result, data collection of community projects was weak. Had the PM&E system been operational, issues in Somali, where WDCs approved turnkey projects to capture CIF resources rather than following the CDD approach, may have been identified and addressed earlier.

35. Furthermore, progress reports assessed outcomes by using national norms rather than actual data. Thus, reports estimated that 50 children (the norm) benefited from a project-built classroom. Yet, enrolment in the schools visited by the project diverged widely from this norm (MTR Aide Memoire, July 2006, Annex 14, p. 2). There were also inaccuracies in sub-project data. With regard to IGAs, M&E has been minimal, as there are no government offices and PCDP mechanisms to monitor IGA performance. 36. In the absence of an M&E system, efficiency and performance indicators in the reporting format could have helped to evaluate and improve implementation. Data collected was limited to reports on disbursement, project activities and their current status (on ongoing, completed and operational sub-projects) by sector and region, with lack of attention to any higher-level outcome indicators. Effectiveness of interventions could have been interpreted by linking the type of interventions (wells, ponds), with their costs and reach (numbers benefiting). Overall, PCDP failed

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to have an adequately designed, implemented and utilized outcome-based M&E system, especially one that included community participation in the evaluation.

2.4 Safeguard and Fiduciary Compliance Safeguards 37. PCDP was assigned the environmental category “B”. The PAD showed OP 4.01 Environmental Assessment, OP 4.04 Natural Habitats, and OP 4.09 Pest Management as triggered. To ensure compliance with these policies, the Environmental Assessment and Management Framework (EAMF, dated January 10, 2003) was prepared. The EAMF included provisions for identifying natural habitats and recommended that PCDP establish, with help from the Environmental Protection Authority, a working definition to identify natural habitats and thus ensure that its interventions would not impact them negatively. Similarly, the EAMF provided measures in the screening process to identify the potential for impacts, and, if triggered, specified the requirement of an Integrated Pest Management Plan to ensure compliance with OP 4.09.10 38. The above policies did not contribute to improved environmental management as: (i) the sub-projects were not screened for potential adverse environmental and social impacts as per OP 4.01; (ii) a pest management plan for sub-projects was not developed for small-scale irrigation sub-projects as per OP 4.09; and (iii) a working definition for the identification of natural habitats was not developed, and, therefore, the revised environmental and social screening process for sub-projects excluded funding of sub-projects that could have negative impacts on natural habitats. 39. Although PCDP took some steps in the right direction in 2005-2006, efforts to strengthen environmental management capacity under the micro-projects were unsuccessful, mainly due to a lack of commitment by the Bank and the FPCU to implement an efficient environmental and social screening process for micro-projects, and an insufficient number of two environmental supervision missions. The Bank did not clearly state the importance of effective environmental management in the Aide Memoires.11 GoE failed to share with IDA Environmental Assessment Reports prepared in 2005 for the Kelafo Inter-Community River Diversion, the Lasaret Inter-Community Water Supply System in Somali; and community ponds, small-scale irrigation and inter-community roads projects in Afar and SNNPR, as agreed by January 31, 2005. Similarly, a Regional EA for the Afar Region was to be completed by December 31, 2005. These EAs could have provided guidance for sub-projects in these regions. 40. The DCA did not include the EAMF along with the requirement that it be implemented to IDA’s satisfaction, further complicating the situation. Consequently, there was no legal basis for requiring that FPCU implement the institutional arrangements for strengthening environmental

10 The PAD should also have shown OP 7.50 Projects on International Waterways as triggered given that Ethiopia’s riparian neighbors Kenya and Somalia were notified on March 25, 2003. OP 4.10 Indigenous Peoples was marked as triggered in the ISRs even though it had been decided at appraisal that this policy was not triggered as PCDP was to be implemented by and with pastoral people who formed the dominant society in the project areas, and were to be beneficiaries of the project investments. Therefore, they could not be regarded as “indigenous peoples” in World Bank terms; i.e. social groups distinct from the dominant society that are vulnerable to being disadvantaged by the project. Recommendation for revising the safeguard policies showing as triggered in the ISRs was forwarded to the TTL on July 18, 2006. 11 For example, the 2005 Aide Memoire stated that the FPCU should review the revised draft environmental and social screening process and “prepare a comprehensive action plan on how to make it functional”, and a revised version was to be forwarded to IDA for endorsement on October 28, 2005; the 2006 Aide Memoire stated that the FPCU should support the environmental training program.

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management capacity outlined in the EAMF, i.e. recruitment of : (i) an Environmental Coordinator at the level of the FPCU; (ii) Environmental Focal Points at the regional levels to ensure that in each region (Somali, Afar, Oromia) there is a focal point to support the kebeles in implementing the Environmental Management Plan and in screening and approving sub-projects; and (iii) Environmental Focal Points be recruited at the kebele levels. None of these steps were taken. Instead, the project hired four water engineers. 41. “In most cases the Environmental and Social Screening List is not applied and the budget allocation for community sub-projects do not include budget for mitigating impacts on both environment and society. The List has never been used in woreda sub-project approval processes depicting that there is no sign of allocating budget for mitigation measures along with funds for implementing community sub-projects. During the field assessment, the team observed that most of the “birkas” (water points) are exposed to animal dung, people are swimming, there is no fencing, and drinking slots are not formed and that they are becoming a breeding ground for water borne diseases…” (Participatory Assessment Report, MoFA, 2007, p. 19). Thus, it was not surprising that the ICR team observed poor environmental conditions at a number of water points. 42. On the positive side, PCDP’s promotion of improved management of pasture development and grazing areas, and soil erosion control projects has contributed to an improved environment. For example, experience with communal pasture improvements in Tulunga had shown that environmental conditions improve substantially once access to pastures is strictly limited and the rules are enforced by the community elders. Communities are able to maintain the improved pastures. The site was selected by the community on the basis of the quality of the grass and the even level of the land, which is owned by the community. The key to the success and sustainability of pasture improvements is: (i) for the kebele committee for pastoral affairs to train the community as to the rationale for enclosures, and the application of rules and possible punishment for ignoring the rules; and (ii) the assignment of guards in strategic locations.

Procurement 43. The PAD anticipated that capacity constraints would be the main procurement issue. PCDP provided several remedies to limit misprocurement and misallocation of funds: (i) investment to proceed at a pace consistent with beneficiaries’ implementation capacities; (ii) random audits to review the use of funds; (iii) ex-post review of 20 percent of micro projects by independent consultants; (iv) the FPCU to set up a roster of consultants to assist RPCUs and woredas with procurement; and (v) if the woreda is weak and there are no capable sponsoring agencies, tendering to be done by the RPCU for projects costing less than US$100,000. None of these remedies appear to have been applied, either by the FPCU or the RPCU. Unfamiliarity with supporting project documents (PAD and PIM, Financial, and Procurement Manuals) was a contributing factor to this outcome, particularly at the RPCU and WDC levels. Despite concerns, the MTR rated procurement activities and procurement plan implementation at the FPCU level as satisfactory. Clearly the hoped for levels of procurement capacity were not achieved. Financial Management (FM) 44. Inadequate forward financial planning, insufficient management oversight and weak accountability systems led to failure in following expenditure guidelines. While this was clearly the case in Somali, it was present to a lesser degree in other regions. The RPCU, WDCs and woreda administrations did not follow the qualification criteria and guidelines in the PAD, PIM and the FM and Procurement manuals, committed more funds than available, and exceeded expenditure caps. The lack of adequate expenditure oversight undermined the principles of PCDP, as investment funds were allocated without following the CDD approach. The March 2007 and the February 2008 missions concluded that (with the exception of Somali), there was reasonable

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assurance that Bank and IFAD proceeds were being used for the intended purposes. The FM rating remained moderately unsatisfactory. Thus, as determined during project preparation, the project continued to face a substantial risk in the area of financial management. 2.5 Post-completion Operation/Next Phase 45. Communities and local government have demonstrated their desire for capacity to implement sub-projects beyond initial expectations. As PCDP was initially planned as an APL to support long-term processes and learning and this remains valid, a follow-on second APL was prepared to continue these activities. The Board approved PCDP II (US$80 million) on May 29, 2008. IFAD will continue to co-finance Phase II with US$33.5 million.

46. Lessons learned in Phase I have informed the design PCDP II, which will expand its activities to 57 woredas covering about 600,000 rural households, institutionalize many activities and strengthen pastoral risk management.

47. PCDP II has built robust results and M&E frameworks with clearer objectives, measurable indicators, and provisions for M&E. Detailed operational guidelines have been developed for all components. For the CIF, the approach includes annual budget and work plans for beneficiary communities and woredas, sustained capacity building of communities, MSTs and WDCs, and the strengthening of social analysis and accountability aspects. IGAs will be undertaken by the Federal Cooperative Agency, which is responsible for developing rural micro-finance, and PCDP will strengthen the capacity of this agency to adapt and extend its services to pastoral communities. The execution of the Pastoral Risk Management component has been delegated to the Early Warning and Response Directorate of MoARD, and implementation plans have been built on the needs of this agency. Key challenges during Phase II will be to instill greater ownership by regional governments, strengthen participatory approaches, provide timely social and technical support services to a dispersed set of communities, improve compliance of communities and local government officials with project rules and procedures, and ensure more effective M&E.

3. ASSESSMENT OF OUTCOMES

3.1 Relevance of Objectives, Design and Implementation 48. PCDP’s objectives remain relevant to the key elements of the pastoral development program in GoE’s Plan for Accelerated and Sustained Development to End Poverty (PASDEP, 2004/5 – 2009/10), which are to improve pastoral livelihoods and asset bases, improve basic services in pastoral areas, and address institutional issues related to pastoralists. Pastoralists constitute a large proportion of the poorest communities in Ethiopia, and thus considerable assistance is still needed to reduce poverty and vulnerability of their communities. 49. The central element in the project’s design—the CDD approach, was very valid. The pace and sequencing of activities, and, in particular, how the outcome indicators themselves were defined could have been better. The indicators, which emphasized delivery targets (outputs) rather than outcomes, did not sufficiently capture or prioritize the institutional and organizational dimensions despite their importance for ensuring sustainability of the achievements. This design weakness inevitably carried over to supervision in a project where a focus on process and quality of interventions should have been as important as amounts disbursed and/or products. 50. The three-phase APL with flexibility to support a long-term development strategy was important given the country context, pastoral traditions, and limited existing capacity of local

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government and communities. This allows time and actions to reinforce first period activities and raises the likelihood of sustainable outcomes, as later projects can be designed based on lessons learned and results achieved from the earlier phases.

3.2 Achievement of Project Development Objectives 51. Insufficient and conflicting data12 and the fact that several outcome indicators do not necessarily reflect the PDO make it a challenge to accurately evaluate if PCDP achieved its objectives. GoE’s ICR states that, “adequate and reliable quantitative information from project woredas and regions was not available to analyze the outcomes of project interventions” (GoE ICR, p. 26). This ICR attempts to assess if PCDP realized the PDO by looking at the PDO in two parts: (i) providing capacity building and establishing effective models of public service delivery and investment; and (ii) establishing effective models of disaster management in pastoral areas that address communities’ needs and reduce their vulnerability. This is achieved by assessing the performance of the different activities that sought to achieve each part of the PDO.13 52. PDO Part (i). The project has been satisfactory in providing capacity building training at community and public service provider levels. In the Beneficiary Assessment (May 2007) and the Assessment of Income Generating Activities (May 2008), there is clear endorsement that the CDD approach has built capacity, created empowerment and fostered a sense of ownership of project activities by pastoral communities (Table 1).

Table 1: Community/Kebele level Key Informants’ Responses (by Woreda %) to selected

questions and key issues on PCDP by Region and National level Somali Afar Oromia SNNPR National Community desire to continue with the approach 95 100 100 100 98Received training/orientation from PCDP 76 98 91 88 87Trainees’ participation in project cycle management 100 100 100 100 100Trained beneficiaries’ ability to transfer what they learned to beneficiaries who have not been trained.

74 95 86 68 82

Community empowerment in decision-making, feeling of ownership of subprojects, self confidence

91 93 86 88 90

Participation of all beneficiaries in the implementation and management of subprojects

94 100 96 100 97

Creation of Community Development Committees 95 100 96 96 97Usefulness of MSTs visits 83 100 100 100 97Implementation of PCDP approaches as intended 58 100 100 100 92

53. The successful introduction of this local development process has enabled access to a wider range of public services, i.e. health, education, and communication, and demonstrated the high receptivity and commitment of communities to assume responsibility in playing the role as key stakeholders in pastoral development (in partnership with other key stakeholders). Communities identified health and education, water supply, and social infrastructure programs as

12 The “Participatory Assessment Report on Implementation Arrangements by Working Team submitted to State Minister, MOFA, 2007, and “Windows of Progress enlightened in the Implementation of Phase I” submitted by MOFA & FPCU to MoFED, 2007 provide opposing data. The MTR M&E Report, April 2006, and the IGA Assessment, May 2008 are consistent with the first. Project reports are in sharp contrast to the results of an independent review on CIF and DPCF implementation in four woredas in Somali. 13 See Annex 2 Appendices 1-3 for Outputs by Component, the Results Framework, and the KPIs.

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their investment priorities; these were the outputs most mentioned as beneficial to improving livelihoods under PCDP.

“The CDD approach had a positive impact on the local stakeholders and development agencies’ (WDC, MOT, sector office experts, etc.) attitude to communities and their ability to initiate, implement effectively and ensure the development sustainability of community-based projects that are initiated, implemented, owned, managed and operated by the beneficiaries themselves” (Beneficiary Assessment, May 2007, p. 19).

54. Ninety eight percent of those interviewed indicated their “satisfaction” with PCDP’s community-centered approach and process, and desire to continue. 14 Beneficiaries attribute satisfaction to their ability to participate in identifying their needs, and in implementing sub-projects through committee members they elected. Eighty two percent indicate that capacity building training has also been “relevant” to solving their development problems, as training messages are usable under their context and easier to disseminate to others. Focal groups indicate that communities are now more committed to improving their livelihoods. 55. Local governments are now better able to plan and manage development activities than in the pre-PCDP period, and delegation of authority to the local level has increased. PCDP has trained 674 Woreda Development Committee (WDC) members, and there are now 32 functional WDCs who manage project resources and supervise sub-project activities at woreda level (Annex 2, Tables 1& 10). In turn, PCDP seems to also have better recognition and respect from the pastoral communities than any other institution in the lowlands (MTR, April 2006). 56. Empowerment and capacity have improved compared to what it was before PCDP. Overall, benefits obtained in terms of “before” versus “after” the training indicate that apart from the capacity building training and orientation, key informants value the significant impact on empowerment of the entire beneficiary from the PLA exercise and the experience gained during implementation of the sub-projects. 57. A total of 1,025 micro-projects were completed and 332 are ongoing. Of the completed projects, 80 percent are operational. The largest percentage of the completed projects is in IGAs (22.7), education (20.3), and water (20.2), followed by human health (12.6 percent), local level support (10 percent), animal health (7.5 percent), irrigation (3.3 percent), community road (2.9 percent), natural resources (0.5 percent) and rural energy (0.1 percent) (Table 3).

Table 2: Sustainable Livelihood Enhancement sub-projects by region (2003-2008)

Region Projects Completed Projects Ongoing Total Number Somali 290 127 417 Afar 254 87 341 Oromia 336 92 428 SNNPRR 145 26 171 Total 1,025 332 1,357

Source: Government ICR and PCDP data, (June, 2008) 58. PCDP has enhanced the capacity of grass roots institutions to provide basic services by training over 10,000 people including 3,174 community-based workers (Annex 2, Table 10).

14“Satisfaction” refers to qualitative measures such as relevancy or usefulness, applicability to local situation and suitability to solve local development problems.

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Though the quality of services provided by these para-professionals is not high, their contribution in areas where neither these basic services were available or adequately staffed is important. 59. Beneficiaries identify veterinary service as the most satisfactory intervention by PCDP. Over 200,000 people have benefited from animal health subprojects. Due to difficulties in attracting the required technical personnel to these harsh areas, PCDP has recruited enlightened pastoralists and trained them to become community animal health workers to serve the community within their locality. Adequate animal drugs have been provided; the vaccination programs carried out are relatively better than before PCDP; and overall veterinary service has improved.

Table 3: Ongoing and Completed projects per project type (2003-2008) Project Type On Going Completed Total Number Water 41 207 248 Education 85 208 293 Human Health 85 129 214 Animal Health 43 77 120 Local Level Support 15 102 117 Income Generating Activities 59 233 292 Irrigation 3 34 37 Community Road 0 29 29 Natural Resources 0 5 5 Rural Energy 1 1 2 Total 332 1,025 1,357

Source: Government ICR and PCDP data, (June, 2008) 60. Beneficiaries value the creation of educational facilities, which has contributed to improving school participation of boys and girls. Alternative Basic Education (ABE) sites, and first and second cycle schools at one or different place(s), Junior and Senior high schools, and teachers' resident houses have been constructed within the pastoral communities. Most schools are built in areas where there were no schools previously, and these have also reduced distances to schools. There is now one PCDP constructed and maintained school per 620 km2 and one school per two kebeles (MTR M&E Evaluation, p. 43). More than 20,000 students are expected to benefit from the 180 operational education sub-projects. 61. Better health services, water supply, rural/feeder roads and range management have helped to enhance livelihoods. For example, Argoba woreda in Afar, with 13 administrative kebeles and a population of 15,000, was previously inaccessible, and had no road connecting the kebeles to the woreda capital. Since the community prioritized access roads, 74 kilometers of access roads have been built. Consequently other social services like schools and health posts are being constructed. Expectant mothers are now able to access the health center. Although some of the health posts constructed have not yet begun providing the intended services, the PCDP interventions in human health have brought about general awareness among the beneficiary communities in relation to environmental sanitation, family planning, and child care, among others. 62. PCDP has built capacity by equipping government institutions in the four regions, at woreda and community levels, to access previously inaccessible communities. Almost all woredas have communication and transport equipment, and other office and agricultural tools. These institutions are now better able to manage development activities and provide necessary services. Generally, the impact of capacity building activities has been fundamental to sustainability and enhanced development in the lowlands.

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63. Beneficiaries characterize IGAs, a new area introduced by PCDP, as being relevant to addressing their needs, and as having improved their livelihoods. Jobless youth and women’s groups in particular indicate that IGAs are relevant to improving their livelihoods in terms of generating additional income, creating self-employment, and strengthening their social ties. Youth groups have developed brick-making skills and supply bricks to contractors for building schools and health posts, generating income. The social benefits seem remarkable, as IGA groups have been formed on a voluntary basis and support each other during emergencies. 35 percent of the IGAs sampled say they are saving. Groups repeatedly say that the new activities (other than livestock rearing) have assisted them in acquiring additional skills that improve their lives.

Table 4: Income generating activities per regions (2003-2008) Region IGASomali 105Afar 22Oromia 308SNNPR 6Total 441

Source: Assessment of IGAs financed during Phase 1 of PCDP (May, 2008)

Table 5: Major IGA’s business activities Business Activities Percentage Handcrafts 2.5 Petty trade 17.5 Fruit vegetable production and marketing 7.5 Wood work 2.5 Services* 20.0 Sanitation and hygiene/shower, toilets 7.5 Grinding mills 20.0 Rental house 2.5 Livestock marketing/raring 20.0 Total 100.0

Source: Assessment of Income Generating Activities financed during Phase 1 of PCDP (May, 2008) * Video house, music band, tyre repair, garage brick production and cafeteria.

Table 6: Total beneficiaries from SLE and per Regions (2003-2008)

Region Beneficiaries Total Percentage Female Male Female

Somali 1,154,341 989,343 2,143,686 46.2% Oromia 484,483 486,251 970,732 50.1% Afar 354,859 278,973 633,832 44.0% SNNPR 94,349 91,057 185,406 49.1%

Total 2,088,032 1,845,624 3,933,656 46.9% Source: FPCUP/CDP M&E office (June 2008). 64. Despite these encouraging signs, beneficiaries indicate that capacity building activity at community level remains weak as they still lack confidence to undertake procurement and financial management, and most communities and local governments feel that they still have to rely on external support to propose and execute projects. In most areas, it is the MOTs who have been conducting needs assessments, proposing and supervising projects consistent with regular

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government planning procedures and planning periods. MOTs indicate that sustainability will depend on the commitment of GoE and/or other organizations to undertake similar activities and procedures once PCDP is no more. Thus, more capacity building, frequent training, onsite experience sharing and learning, and frequent monitoring are needed to further empower the community and ensure sustainability of PCDP’s outputs (Performance M&E Report, April 2006). 65. PCDP has been moderately satisfactory in establishing an effective model of public service delivery and investment. This relates to the procedures and principles of the CIF, and support services to strengthen public services (under the SLE Component). PCDP’s planned model can be summarized as follows: (a) training of MSTs and other stakeholders; (b) MSTs use PLA tools and help communities to plan sub-projects based on Community Development Plans. Such capacity building is to be eventually taken up by MOTs; (c) prior to acceptance for CIF financing, WDCs appraise plans against transparent criteria including nature and type, environmental screening and guidelines, technical standards, and woreda development priorities; (d) the woreda administrator (in case of a community micro-projects) and the woreda council (in case of intercommunity sub-projects) approve funding; (e) the woreda finance office disburses funds; and (f) the community implements the sub-projects. 66. The above mechanism has been set up, with some limitations. With respect to (a) and (b), the frequent MST and MOT visits to sub-projects in the first year (2-3 times a week) declined with the rapid increase in project woredas and kebeles. Dissatisfied beneficiaries point to the limited amount, duration and types of training and the high turnover of staff in the project development offices. The timing and sequencing of capacity building could also have been better. Training for elected CDC members differed from woreda to woreda, and some CDC members were trained quite late after sub-project construction commenced (i.e. in Kebribeya woreda in Somali, where there was also misunderstanding between the WDC and the RPCU). More effective capacity building at the local level could have provided a check on several issues PCDP faced, such as the top-down execution of some activities, limited accountability and opportunities for fraud. Especially, combined with weak M&E, these shortcomings led to elite capture by some woreda administrations.15 On (c) above, WDC screening processes are unclear, and varied by woreda. WDCs do not seem to have carefully assessed woreda needs with respect to CBWs (Annex 2), and environmental screening was poor. Of those interviewed, 97 percent stated that the designs for infrastructure built (schools, flourmills, milk collection units etc.) in their respective locality corresponded to GoE standards, and were prepared/came from relevant sectoral offices/Regional Bureaus (except in Somali, where construction quality was not based on government standards). Site observations confirmed that infrastructure designs and quality conformed to GoE standards. The construction quality in some cases was better than that of similar infrastructure built in neighboring kebeles by government and NGOs. On (d) and (e), although WDCs approved proposals submitted by a large number of communities, RPCUs did not release funds, as budget requirements of approved sub-project proposals in some woredas far exceeded the available project budget. In some cases, communities could not complete sub-projects and obtain services. 67. Despite these limitations, PCDP has contributed to enhancing the asset bases and lives of pastoralists. Overall, the IGA evaluation concluded that despite all the challenges with lack of continuous PCDP support, the sub-projects resulted in “tremendous work load reduction, saving time and energy of women, assisting members to develop entrepreneurship skills, enhancing youth participation and strengthening social bondage and cultivating the culture of self support during emergencies. In some instances, it demonstrated that the poor can save”.

15 Operational Review of PCDP in Somali Region Mission report, June 2007.

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68. PDO Part (ii). PCDP has been marginally unsatisfactory in achieving the second part of the PDO. The reorganization of DPPC made it almost impossible to stick to the conditions and sequencing set out in the PIM. As a result, completion of disaster preparedness and contingency plans was only achieved shortly before project closing (Annex 2). Drought struck many areas during the DPPC-DPPA stalemate. As DPCF resources were available, regions used the fund (based on local and traditional knowledge of communities to reduce vulnerability) to intervene in drought-affected areas both inside and outside project woredas. The procedures followed differed by region. In some areas the project financed drought emergency response using shelf projects on an ad-hoc basis. The efficiency and sustainability of such interventions was questionable, and these practices were suspended by MTR in 2006. US$12.9 million of DPCF resources were transferred to the CIF and the rest was to be utilized once preconditions for fund use were met. 69. As the planned institutional framework was not in place, the component was executed by the regions in an ad hoc manner. DPCF sub-projects in different regions are at various stages of implementation. Some are not functional, especially in Somali, where only 73 percent of project completed are operating. In Afar, the region decided to use the DPCF outside PCDP woredas.

3.3 Efficiency 70. The PCDP PAD indicated that given the demand-driven nature of the sub-projects, conventional calculations of net present values and economic rates of return would have little meaning, as: benefits of the capacity-building components (support to communities and local governance) cannot easily be quantified in monetary terms; the investment component cannot be known ex ante, since it is demand-driven and defined in the course of the project; and many benefits from anticipated investments similarly defy quantification. 71. The project did not collect any comprehensive quantitative input/output/revenue data that would enable the ICR to carry out conventional analyses. Activity reviews, however, show that in general, communities chose investments that mattered most to them. The construction costs of health posts and schools compared favorably with those of NGOs following similar construction methods, probably due to community involvement and contribution. However, many incomplete structures have contributed to losses in efficiency (IFAD, June 2008). 72. PCDP II conducted an analysis that examined: (i) disaster early warning and response; (ii) IGAs; and (iii) the introduction of a process to ensure sustainability and cost-effectiveness of all project-supported investments. This analysis is presented in Annex 3. 3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory 73. PCDP partially achieved its PDO. As shown above, the project’s main activities and achievements were under Part (i) of the PDO (and in component 1, which accounted for 66 percent of total project costs). Through the CDD approach, PCDP did create genuine participation and empowerment of pastoral communities and grass root institutions including government, community-based organizations and individuals. Almost four million people have benefited from micro-projects (Annex 2 Table 9). The project, however, did not establish an effective model of disaster management in pastoral areas due to the restructuring and subsequent lack of uptake by the institution that was to carry out the component. The activities were therefore badly sequenced with the planning mechanisms being completed only shortly before project closing.

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74. PCDP’s impact on the local stakeholders and development agencies’ attitudes to communities and their ability to implement projects has been positive, and project investments have improved pastoral livelihoods and reduced their vulnerability. This is sufficient to give PCDP a Moderately Satisfactory rating. 75. The ‘MS’ rating reflects: (i) the relevance of the project’s design and interventions; (ii) the evidence that most social infrastructure construction costs compared favorably with those of NGOs following similar methods, and the quality of most subprojects was consistent with GoE standards; (iii) the satisfaction by stakeholders with the gains derived and their satisfaction with the CDD process; and (iv) the evidence that increased capacity and effective mechanisms are place to provide continuity and the possibility of sustainability in the future. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 76. PCDP contributed significantly to fostering local involvement of both men and women in planning and implementing community sub-projects, and to making them more confident that they can take on local development, and can demand service delivery from government agencies. 77. According to PCDP data, women make up 67 percent of the beneficiaries from IGAs in SNNPR, 71 percent in Somali Region and 88 percent in Oromia Region. Gender-disaggregated data on the IGA’s were not available for Afar Region. Women were also reported as the major beneficiaries of micro-projects and social investments (40 percent of the Grade 1-4 pupils in a PCDP-financed school were girls, and women benefitted disproportionately from increased access to water, health posts/infant care, and grain mills). 78. The IGAs also contributed to livelihood diversification and employment, and addressed poverty through increased/stable incomes. In many instances, the most vulnerable members of the community were identified as micro-project beneficiaries, for example through participatory wealth ranking/classification and decision-making processes. In addition to community-based targeting, self-targeting was also practiced. Use of bottom-up targeting mechanisms combined with adapted CDD approaches that limit entry barriers to participation has enhanced the likelihood of reaching those most in poverty, and reinforced ownership and sustainability of interventions. (b) Institutional Change/Strengthening 79. PCDP contributed to some longer-term capacity and institutional development by progressively strengthening the decentralization process (through training woreda and kebele officers) and mainstreaming institutional change through building and demonstrating CDD models. There is now broader access to essential public services, including trained local staff and equipment at health posts, schools, and kebele administrative offices in beneficiary woredas. There is also increased awareness and improved action among government sector staff to harmonize interventions through joint planning in order to respond to community needs in a demand-driven and integrated manner. (c) Other Unintended Outcomes and Impacts (positive or negative) 80. One unintended negative outcome was the over-commitment to sub-projects and shortage of funds towards the end of PCDP. Lack of sufficient consideration of budget balances, indicative budget ceilings per region, and clear annual budgeting systems contributed to a race for funds under the CIF that led to overreach in some cases, incomplete sub-projects, and a shortfall in resources to complete all approved sub-projects. This could lead to a loss of confidence among beneficiaries if agreed activities are not completed. GoE has confirmed that incomplete Phase I projects will be completed using phase II funds.

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81. Two positive outcomes are: (i) the increased demand for service delivery and community development approaches in woredas neighboring PCDP target woredas. This is increasing the pressure on GoE to invest in these areas based on the priorities of residents; and (ii) GoE’s robust response to the misuse of project funds in Somali has clearly signaled that it will not tolerate use of investment funds for unintended purposes or in a manner inconsistent with its procedures. The subsequent willingness to identify and remedy fiduciary weaknesses has strengthened the fiduciary management framework for PCDP II. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 82. Some of the key observations in the Beneficiary Assessment (May 2007) summarized in Annex 5 include: (i) increasing the ratio of MSTs and MOTs to the number of sub-projects on which they work, given the success of projects that MSTs and MOTs visited more frequently and in a timely manner (as in the first year sub-projects that match the supervision capacity of the available MST/MOT); (ii) institutionalizing the CDD approach requires continuous training for capacity building and also the inclusion of more literate individuals in the selection of training participants; (iii) the importance of taking into consideration the availability of budget in advance so that beneficiaries are not dissatisfied; and (iv) the need to consider a ‘minimum package’ that includes the required services and other inputs when planning sub-projects.

4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME Rating: Moderate 83. Overall, the risk to development outcomes is evaluated as moderate. The risk is low in some areas, given: (i) GoE’s commitment to pastoral development; (ii) the high ownership of PCDP I by local government and by beneficiaries through the CDD process; and (iii) the relatively low to modest financial risks linked to sustainability of most micro-investments. There are substantial risks, however, in other areas (as mentioned in the PCDP II PAD), including: the risk of political and bureaucratic interference with attempts at elite capture; disruptions due to conflict, mainly in the Somali Region; failure of GoE to develop a comprehensive framework for risk management in pastoral areas, and to improve relations with NGOs; and livelihood gains being undermined by natural disasters, in particular, a severe drought. 84. The institutional risk to development outcome is low. PCDP has contributed to longer-term institutional development as evidenced by the gradual shifts in attitudes and practice. GoE’s commitment to support decentralized processes should further strengthen the linkages and efficiency between different levels of government, and the gains to be derived from PCDP.

85. The economic and financial risk to development outcome is low. Economic infrastructure strengthened and funded by PCDP is on a relatively modest operational and financial scale and can be maintained by the regional and community level committees. Similarly, the private sector interventions for IGA’s are not in areas of high cost infrastructure and operating capital, and can be maintained by the community groups who prioritized them as a need.

86. The social risk to development outcome is low. The CDD approach has created social capital. As communities increase their management capacities, assets and income, they should be in a more equitable position with other rural actors, and able to partner more effectively with other key stakeholders. Meeting these aims would increase the communities overall development trajectory and resilience to risks. PCDP has also started to mainstream gender and social equity in the local

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development agenda. More needs to be done to enhance involvement of women on decision-making groups, which is still hampered by traditional social structures.

87. The environmental risk to development outcome is substantial given that PCDP failed to develop environmental and social management capacity through the: (i) appointment of qualified Regional Environmental Specialists to oversee the implementation of the EAMP; and (ii) implementation of an environmental training program to strengthen capacity at the kebele level. PCDP II will need to focus immediately on strengthening environmental and social management capacity, and to making a commitment to frequent environmental supervision missions.

5. ASSESSMENT OF BANK AND BORROWER PERFORMANCE 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory 88. The Bank conducted relevant ESW, collaborated with other donors, and discussed the project proposals with stakeholders to develop a relevant project. The Bank should have performed much better in several aspects: paying sufficient attention at the outset to establishing baselines for each region linked to an M&E system; setting out clear procedures in the PIM on assessing the efficiency and sustainability of sub-projects selected and managed; and sequencing of project activities. Earlier preparation of the PIM, which was left for effectiveness, might have also helped in ensuring earlier buy-in to the process of PCDP. The design also underestimated the time and effort (in terms of training, MSTs etc.) needed to graduate the woredas, undermining the CDD facilitation process and implementation. Finally, the project’s KPIs mostly emphasized delivery targets rather than clear measurable outcome indicators of capacity and improvements in livelihoods. This negatively influenced implementation and supervision in a project where a focus on delivery, i.e. amounts disbursed, was prioritized in detriment to measuring and analyzing quality of community development processes and sustainability of outcomes. (b) Quality of Supervision Rating: Marginally Unsatisfactory 89. There were long gaps in Bank supervision missions (despite QAG’s suggestion for intense supervision).16 This is also confirmed in the low supervision costs incurred in FY05 (see Annex 4). 90. Supervision missions also failed to act on signs of weaknesses in a timely manner, including follow-up on recommendations made during supervision visits. These failures included institutional issues (M&E systems not in place), operational issues (work plan approval procedures not followed in some regions and supply driven allocations being made), and financial management issues (slow actions on signs of non-compliance and misprocurement). The Supervision Mission of November 2007 itself points to previous unheeded recommendations. 91. Although the Bank pointed to the lack of outcome indicators affecting implementation, the team did not remedy this, and supervision efforts continued to focus on fund expenditure and disbursement triggers as opposed to development impact. The MTR Aide Memoire notes

16 There was a gap of eight months between the second (November 2004) and third supervision missions (July/August 05), and one year between the third and the MTR in June/July 2006.

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the concern that no DPCPs or baseline studies had been initiated to launch the disaster contingency planning process. The next sentence states, “This delay is particularly disconcerting with respect to a trigger for the initiation of Phase II of PCDP”. 92. The Bank team failed to act on the high disbursement rates from 2004-06 (that also coincides with infrequent supervision), and allowed the project to run out of funds, despite noting these issues in the November 2004 Aide Memoire, as: (i) the speed with which community infrastructure projects were being constructed and the large numbers that were not yet ready to provide the required services; (ii) the “push from the top to disburse funds quickly” (Aide Memoire, Nov. 15-30, 2004); and (iii) the unsustainable situation of MSTs as the project scaled up.

93. ISRs were not candid in the ratings, and, in some cases, were inconsistent with the corresponding Aide Memoires.17 At MTR, two of the three components were not progressing well (see Cover Letter to the State Minister and Aide Memoire of July 2006). Yet, the Bank rated progress towards achieving the PDO and implementation as satisfactory. Ratings on safeguard compliance were also inconsistent. Overall, supervision reports were not substantiated by data. 94. The Bank undertook only two environmental supervision missions, and paid little attention to environmental management capacity building. Although the MTR noted concern that sub-projects implemented prior to December 2005 might lack apt mitigation measures, the ISRs continued to rate ‘Environmental Assessment’ as “satisfactory’, through the MTR. Ratings on Environment and Pest Management were finally downgraded to ‘MS’ in the ISR of March 27, 2007, although correspondence from the Project’s Environmental Specialist on March 27, 2007 states that, “the rating for environment is to be Unsatisfactory since the environmental training as agreed was not carried out; and the OPs showing as triggered are not correct.” (Project files). 95. Although supervision efforts improved from 2007 until project closing, these efforts focused on satisfying the Phase I triggers. The Bank took actions on some identified problems and gave more candid (downgraded) ratings, including appropriate action on the findings of the audit and PPR. A positive change in the Project Coordinator at FPCU also contributed to better Bank supervision. PCDP Phase II was discussed as early as during the Phase I MTR, when a PM&E system had yet to be established and several sub-components were not performing satisfactorily (MTR Aide Memoire, July 2006). The Aide Memoire of March 23, 2007 states that it was premature to formally initiate the preparation of an APL II due to: (i) fiduciary concerns; (ii) the need for improvement of implementation modalities in Somali region; and (iii) the status of implementation of trigger studies not allowing adequate assessment of performance. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Unsatisfactory 96. Overall Bank Performance is rated as Moderately Unsatisfactory despite the overall outcome rating of ‘MS’, as the ICR team concludes that the poor supervision quality outweighs the ‘MS’

17 See Country Director’s comment on the rejection of the ISR of May 23, 2005; upgrading of the Risk Management component in same ISR; inconsistency between the MTR Aide Memoire and the ISR of August 25, 2006, i.e. the unsatisfactory performance under Component 3 described in the Aide Memoire and the MS rating in the ISR.

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rating for quality of entry.18 Supervision was ineffective, with significant lapses in terms of the failure to act on the rapid disbursements for sub-projects over a two-year period that left about 25 percent of the approved sub-projects incomplete, the lack of action in light of the failure of PCDP to implement M&E, and weak procurement supervision, including the absence of follow up on the project’s remedies to limit misprocurement and misallocation of funds. These issues raised considerable concerns about the appropriate (transparent) use of resources towards the agreed PDOs (ISR, March 26, 2008). The Bank also did not adequately follow-up on several shortcomings in design, i.e. the poor choice of expenditure-related KPIs and the lack of outcome indicators, no useful baseline studies, and sequencing issues, especially under the risk management component, which was considered critical to safeguarding the vulnerability of pastoralists . 97. Quality Assurance Group ratings. The Stage One rating in the Sixth Quality at Entry Assessment (QAE6) was Moderately Unsatisfactory based on: (i) the low importance given to structural and sector policy reforms in a project of this nature, where decentralization and institutional development are critical to successfully implementing an APL program; (ii) the serious capacity constraints for implementation, particularly at the woreda level needed to be addressed with urgency, and the fact that the project had not yet worked out the operational details of these actions; (iii) the considerable risks of elite capture; and (iv) the government not having the instruments or the experience to guarantee success in decentralization of decision-making. The QAG Panel believed that given the many uncertainties surrounding the infant CDD approach itself and the risks of this project; a more gradual smaller-scale approach would have been preferable. 5.2 Borrower Performance (a) Government Performance Rating: Moderately Unsatisfactory 98. Despite the fact that GoE has demonstrated a commitment to pastoral communities and to decentralization, there were sufficient shortcomings before and during project implementation to rate borrower performance as Moderately Unsatisfactory. First, the switch of Ministries at appraisal without notice to the Bank undermined readiness for implementation. This change also introduced more risks of political influence (evidenced through the performance of the implementing agency below) as MoFA was more an administrative Ministry while MoA was a more technical-oriented Ministry. There also appeared to be different visions of pastoral development between the two Ministries, with MoFA accepting more than MoA that settlement was a characteristic of future development of pastoral areas. Second, the protracted process of the restructuring of DPPA and the subsequent failure to resolve institutional responsibilities jeopardized the risk management component. Third, poor cooperation between and across Government administrative units led to inaction and delays in appointing adequate numbers and levels of personnel to staff. For example, some of the social infrastructure (schools, human and animal health posts) built by the project remain poorly staffed. Further, shortage of government workers and budget limited the effectiveness of MOTs at woreda levels and impacted negatively on joint planning and operations. Finally, the PAD identified GoE relations with NGOs as a risk, mentioning NGO involvement as invaluable to project success. Overall, collaboration with NGOs was not as strong as foreseen during PCDP design (MTR, Annex 6.1), and remained weak. GoE

18 The ICR Guidelines suggest that if one on the two dimensions (Quality at Entry and Supervision) is in the satisfactory range and the other is in the unsatisfactory range, the overall performance rating would normally depend on the Outcome rating, unless Bank performance did not significantly affect the particular outcome.

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inaction on the JSDF delayed activities that required the capacity of existing NGOs, and would have likely resulted in enhanced project outcomes.

(b) Implementing Agency or Agencies Performance Rating: Moderately Unsatisfactory 99. The FPCU was carrying out a project using an approach that was intensive in its use of personnel and complex in its myriad and nature of relationships required for successful implementation. As the project became better known and activity increased across 32 woredas in the four regions, the FPCU did not maintain systematic procedures for operations as outlined in the PAD/PIM and other manuals. Thus, the sequencing and selection criteria for sub-project selection were not enforced, staff was not adequately trained, and sufficient linkages with partner organizations were not maintained as initially envisaged. These weaknesses were compounded by the long distances and difficult terrain to be covered and shortage of required qualified staff in the areas. M&E was also very poor; there was limited data collection, analysis, and reporting of lessons learned. There were also clear failures in the management and delivery of funds, leading to cases of misprocurement. This resulted in hasty decisions, in some cases influenced by political pressure, and financial commitments beyond the funds available for the project. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Unsatisfactory 100. The overall rating of Moderately Unsatisfactory is based largely on the failures related to coordination (between and across governmental entities), implementation (not following procedures for selection of sub-projects, misprocurement and over-commitment), and failure to make progress on the policy aspects of PCDP that are seen to be critical to longer-term sustainability. While supervision reports did point to many of the weaknesses, they were not adequately addressed during implementation. 6. Lessons Learned

101. Do not shy away from formally restructuring a project. Rather than hoping for the best when repeatedly confronting implementation problems, Bank teams should be proactive in proposing changes (such as in the results framework and indicators), which would result in greater clarity and a more substantive definition of project outcomes. 102. Certain projects require closer supervision. Projects such as CDD projects, with new and unfamiliar processes, projects spread across large geographical areas where local procurement is required, projects covering different ethnic and/or religious groups where decision-makers often tend to bias allocations, in situations where very few or no projects have ever been implemented, and projects that include zones with known political tensions and civil unrest, require intensive supervision.19 Thus, regular joint supervision visits by World Bank teams, partner agencies and external consultants should be budgeted to allow for higher frequency. 103. When sub-projects are designed, all inputs, including human resource capacity, which are required to operate the facilities, should be considered up front. (See Annex 5, Beneficiary

19 For example, in two Bank projects in FY09 for US$30 – 40 million in fairly compact and accessible countries--Serbia and Croatia, the supervision budget was US$90,000 each plus modest GEF funds, compared to PCDP’s US$70,000.

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Assessment recommendations on a “minimum package” for implementing projects). For example, adequate attention should be given to the number and types of CBOs trained vis-à-vis the facilities built to ensure no major disparities. Also, when sub-projects in health, veterinary posts and/or schools are considered, assurances that the technical equipment and materials needed for these facilities to function should be sought. Several project-funded schools lack water accessibility and accommodation for teachers; some grinding mills have no water in the vicinity. Sector coordination at local government level is required to ensure that service delivery can commence soon after sub-projects are completed. 104. A consistent results framework, with outcome indicators that are clearly linked to the PDO and differentiated from input/output indicators is very important. Closer attention should be paid to the relationship between meeting indicators of performance and how these very indicators might influence the implementation process. This is especially so in a project where process (both in terms of participation and sequencing) is critical to usefulness and sustainability of the interventions. Given the Ethiopian national context and current stage of decentralization, CDD as the major design characteristic needed to have indicators and targets that were less expenditure and more process and outcome oriented. Due to the focus on meeting project targets and triggers linked to expenditure, the required “moderate” pacing and sensitization, close monitoring and supervision, lessons learning and reflection were compromised. Getting the right links and balance between inputs, outputs and outcomes, and product and process in the design and implementation framework is vital. 105. Institutional and community capacity building should be stressed more when there are new approaches and institutions. PCDP tried a new approach in Ethiopia (CDD) and involved MoFA, which was new to implementing such a project. In such cases, much greater priority needs to be given to training at the start of the project and recognizing the need for this training throughout the project, and especially when there are changes in personnel. Further, training should be extended to collaborating partners beyond the project staff. One major shortcoming in PCDP was not providing sufficient capacity building for government staff and elected community officials (WDCs) as opposed to project staff. Further, a flexible capacity building program needs to be established throughout the implementation period, and this should be extended, repeated and adapted to needs that might arise. This continuous information, training and capacity building support are also needed for both social and private investment activities.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies (b) Cofinanciers (c) Other partners and stakeholders (i.e., NGOs/private sector/civil society)

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ANNEX 1: PROJECT COSTS AND FINANCING

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate (USD millions)*

Actual/Latest Estimate (USD

millions)**

Percentage of Appraisal

1.SUSTAINABLE LIVELIHOODS 34.07 39.32 115

2.PASTORAL RISK MANAGEMENT 15.54 5.96 38

3.PROJECT SUPPORT AND POLICY REFORM 6.58 14.27 217

Total Baseline Cost 56.19 59.55 106

Physical Contingencies 1.77

0.00

0.00

Price Contingencies 2.00

0.00

0.00

Total Project Costs 59.96 59.55 99.32 Total Financing Required 59.96 59.55 99.32

*Exchange rate US$1 = 8.58 Birr (2003) ** Exchange rate US$1 = 9.27 Birr (2007/08)

(b) Financing

Source of Funds Type of Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Borrower/Recipient 5.96 3.92 68

Local Communities 4.00 4.95 121 International Fund for Agricultural Development 20.00 21.14 105

IDA Grant for Debt Vulnerable 30.00 31.89 106

TOTAL 59.96 61.90 103

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ANNEX 2: OUTPUTS BY COMPONENTS20 Component 1: Sustainable Livelihood Enhancement (SLE, US$36.52 million) Achievements under this component are rated moderately satisfactory. This is a key component that accounts for about 66 percent of total project financing. It aimed to establish decentralized and participatory planning procedures at the kebele and woreda levels, operating within the regional government structure. It had three sub-components: (i) Capacity Building; (ii) Community Investment Fund (CIF); and (iii) Support Services. Sub-component 1: Capacity Building Achievements under this sub-component are rated satisfactory as the project successfully undertook skills training in key areas and built local community capacities to develop their own community development plans (CDPs), and met all indicator targets. Three key indicators were specified under this sub-component: (i) increased delegation of authority to woredas, kebeles and communities; (ii) existence and use of transparent, accountable, demand-driven, and decision-making processes at community level; and (iii) broader representation of hitherto marginalized groups in local affairs. All three indicators have been met (except in the Somali region, where under (ii) above, transparent decision-making processes were not always used). Indicator (i): PCDP has established 32 woreda development committees (WDCs) that are functional, manage project resources and supervise sub-project activities at the woreda level. In addition, 592 kebele-level community project management committees (CPMCs) have been established and are operational. In the Beneficiary Assessment, 97 percent of the key informants interviewed (including community elders, traditional/clan leaders, CDC, NGO and MOT members, school headmasters, veterinary post officers and health extension workers) confirmed that community development committees (CDCs) were established. The CDCs mobilized and coordinated beneficiaries’ participation, and managed and operated community sub-projects.

Table 1: Woreda Development Committees and Community Project Management Committees per Region

Region WDC CPMCSomali 14 218Afar 9 261Oromia 7 74SNNPR 2 39Total 32 592

Source: FPCUP/CDP M&E office (June 2008). Indicator (ii): According to the Beneficiary Assessment, the project successfully empowered beneficiary communities, with 90 percent of them indicating that capacity building has enhanced their empowerment and decision making, and have developed a feeling of ownership of sub-

20 See Annex 2 Appendix 1 for Results Framework and Status of Key Performance Indicator.

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projects. The satisfaction with PCDP is associated with the creation of grassroots institutions that mobilize beneficiaries to organize themselves, initiate, manage and operate projects that facilitate the achievement of a common goal, and allow them to check/control any action that was against their interests (for example in avoiding corrupt practices in bid processing, purchases, etc.). The trainings have enabled beneficiary communities to articulate their local development plan. Indicator (iii): In the Beneficiary Assessment, 97 percent of the respondents indicated that all beneficiaries were participating in implementing and managing micro-projects. They also recognized that the project’s approaches emphasized the participation of marginalized groups in local affairs through greater involvement of women and youth in community activities including the identification and selection of sub-projects. Nevertheless, women have had a relatively passive role in the decision-making of pastoral communities, despite the orientation awareness. Women’s participation in training and capacity building has been limited compared to men, partly due to religious or customary rules of traditional societies. Men have benefited most from the training. Through the JSDF grant, PCDP has also secured the involvement Civil Society Organizations (CSOs) to implement complementary capacity building activities in the project areas, although these activities started late. Eleven CSOs supported community-based capacity building processes. Achievements of the CSOs include: (i) 14 community development plans (CDPs) prepared and completed in 16 woredas; (ii) over 80 community project management committees established and strengthened; (iii) about 20 community service management committees established; (iv) 20 business management committees established and reorganized; (v) 14 new women’s groups organized; and (vi) 33 women’s business management committees established and reorganized.

Table 2: Community/Kebele level Key Informants’ Responses (by Woreda %) to selected questions and key issues on PCDP by Region and National level

Somali Afar Oromia SNNPR National Community desire to continue with the approach 95 100 100 100 98Received training/orientation from PCDP 76 98 91 88 87Trainees’ participation in project cycle management 100 100 100 100 100Trained beneficiaries’ ability to transfer what they learned to beneficiaries who have not been trained.

74 95 86 68 82

Community empowerment in decision-making, feeling of ownership of sub-projects, self confidence

91 93 86 88 90

Participation of all beneficiaries in the implementation and management of sub-projects

94 100 96 100 97

Establishment of Community Development Committees

95 100 96 96 97

Usefulness of MSTs visits 83 100 100 100 97Implementation of PCDP approaches as intended 58 100 100 100 92 Sub-component 2: Community Investment Fund (CIF) Achievements under this sub-component are rated satisfactory. The CIF aimed to provide funds to implement community/inter-community-prepared and WDC-appraised sub-projects. Two key indicators were specified under this sub-component:

(i) Number of community development plans (CDPs)developed and approved. (ii) Number of micro-investments and inter-community sub-projects executed.

Both indicators have been met.

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Indicator (i): A total of 500 CDPs were prepared at the kebele level. The training provided to WDCs and MSTs in Participatory Rural Appraisal and Participatory Learning and Action tools has facilitated community consultations, awareness creation and preparation of CDPs. However, the CDPs have not always been used; a top down approach was more frequently used in Somali. Indicator (ii): A total of 1,025 micro-projects and inter-community micro-projects were completed and 332 are in the process of implementation. Of the completed projects, 823 are operational. The largest percentage of the completed projects is in IGAs (22.7), education (20.3), and water (20.2). The share of other activities is in human health (12.6 percent), local level support (10 percent), animal health (7.5 percent), irrigation (3.3 percent), community road (2.9 percent), natural resources (0.5 percent) and rural energy (0.1 percent).

Table 3: Sustainable Livelihood Enhancement sub-projects by region (2003-2008)

Region Projects Completed Projects Ongoing Total Number Somali 290 127 417 Afar 254 87 341 Oromia 336 92 428 SNNPR 145 26 171 Total 1,025 332 1,357

Source: Government ICR and PCDP data, (June, 2008)

Table 4: Completed projects operational per region (2003-2008) Region Operational Projects (%)

Somali 73Afar 82Oromia 81SNNPR 77Total 80


Table 5: Ongoing and Completed projects per project type (2003-2008) Project Type On Going Completed Total Number Water 41 207 248 Education 85 208 293 Human Health 85 129 214 Animal Health 43 77 120 Local Level Support 15 102 117 Income Generating Activities 59 233 292 Irrigation 3 34 37 Community Road 0 29 29 Natural Resources 0 5 5 Rural Energy 1 1 2 Total 332 1,025 1,357

Source: Government ICR and PCDP data, (June, 2008) The major water sub-projects are ponds, shallow wells, deep wells, spring development, micro-dams and river diversion. These are developed to serve both for humans and animals.

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Table 6: Completed projects operational per project type (2003-2008) Project Type Operational Projects (%) Water 78.2Education 86.5Human Health 72Animal Health 46.8Local Level Support 82.4Income Generating Activities 86.7Irrigation 91.1Community Road 100Natural Resources 100Rural Energy 100Total 80.3

Source: Government ICR and PCDP data, (June, 2008) Income Generating Activities (IGAs). Beneficiaries characterize IGAs as having improved their livelihoods. Pastoral women did not have experience in IGAs. PCDP activities have increased their capacity and skill in entrepreneurship development through training, and many women are engaged in petty trade and micro-business activities either on an individual and/or a group basis. Oromia accounts for 70 percent of the IGAs (Table 7). The most common IGAs are livestock marketing/raring, grinding mills, services, and petty trade. In all sampled IGAs, the selection of business type is not based on a feasibility study of the business, but rather on beneficiaries’ past experience. About 92.5 percent of the IGA surveyed are organized groups. Seventy percent of the sampled IGAs are illiterate.

Table 7: Income generating activities per regions (2003-2008) Region IGASomali 105Afar 22Oromia 308SNNPR 6Total 441

Source: Assessment of IGAs financed during Phase 1 of PCDP (May, 2008)

The profitability of IGAs could not be measured as financial documents and statements are either not available or limited to fragmented records. However, most of the interviewed IGAs members reported that they are making a profit from their business, and that the social benefits are important. The sustainability of some of the IGAs is a major issue. In addition, the financial management of IGAs is weak as there are no financial guidelines in all surveyed IGAs and little or no technical assistance has been received in this area. The grant application, processing and disbursement are generally not transparent and exposed to manipulation even by MOT members. Most of the interviewed IGA groups expressed that they do not know the amount of the grant that they received from the project. There are also some serious risks due to the fact that management members are bank signatories and at same time approve the payments.

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Table 8: Major IGA’s business activities Business Activities Percentage Handcrafts 2.5 Petty trade 17.5 Fruit vegetable production and marketing 7.5 Wood work 2.5 Services* 20.0 Sanitation and hygiene/shower, toilets 7.5 Grinding mills 20.0 Rental house 2.5 Livestock marketing/raring 20.0 Total 100.0

Source: Assessment of IGAs financed during Phase 1 of PCDP (May, 2008) * Video house, music band, tyre repair, garage brick production and cafeteria.

Table 9: Total beneficiaries from SLE and per Regions (2003-2008) Region Beneficiaries Total Percentage

Female Male FemaleSomali 1,154,341 989,343 2,143,686 46.2 Oromia 484,483 486,251 970,732 50.1

Afar 354,859 278,973 633,832 44.0 SNNPR 94,349 91,057 185,406 49.1 Total 2,088,032 1,845,624 3,933,656 46.9

Source: FPCUP/CDP M&E office (June 2008). Sub-component 3: Support Services Achievements under this sub-component are rated moderately satisfactory. Support services aim to finance strategic infrastructure investments and strengthen public service delivery at regional and woreda levels, and targeted research into rain-fed and irrigated cropping, range management, livestock production and non-agricultural issues relevant to pastoralists. Six key indicators were specified under this sub-component:

(i) New technologies developed and existing technologies adapted to local conditions; (ii) Technology adoption rate; (iii) Literacy rates; (iv) Access and use of mobile and stationary health and education services; (v) Training programs completed; and (vi) Research contract granted

The project met two it the six indicators and partially met the third.

Indicator (i): The project developed 6 new crop and forage varieties. The new varieties were introduced to 780 agro-pastoral communities. Indicator (ii): The technology adoption rate was not measured. Indicator (iii): Literacy rates were not measured. Indicator (iv): The indicator was not met. Access to stationary health and education services were not measured and no mobile services were supported during Phase I. Nevertheless, the project successfully constructed and rehabilitated 203 schools, 214 human health and animal health posts.

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Indicator (v): Over 10,000 people including 3,174 community-based workers (CBWs) in animal and human health, teaching, and traditional birth attendance have been trained.

Indicator (vi): The indicator was not met. No research contracts were granted. In addition to the improvements in veterinary services, education, health and rural roads (discussed in the ICR text Section 3.2), beneficiaries mention their appreciation of improvements made with regard to the participation of women. PCDP activities have raised awareness of women to attend meetings with men, participate in micro-project identification, prioritization, selection, implementation with their labor, to be organized into women groups for special economic activities of their own interest, decision-making at all levels (at home and in public meetings). There are several issues under the sub-component. These include: disparities between the composition of CBWs and the facilities executed through PCDP support (Beneficiary Assessment, May 2007, p. 32-33); and delays in completed sub-projects providing the intended services. From Tables 5 and 10, we see that Oromia accounts for 1130 of the 1502 (75 percent) of the community animal health workers trained across all regions. The Beneficiary Assessment reports that this is too much for a total of 26 animal health facilities executed (including the ongoing sub-projects) in the region. The Tables show that, taking ratios of trained workers to facilities built, there would be about 2.4 community teachers trained per school across all regions. Similarly, there are about 1.3 workers for each health facility executed. On the contrary, there are about 12.5 animal health workers trained for each animal health facility. In Oromia, this ratio is 43 workers per animal health facility built, and only 5 human health workers trained for 30 human health facilities executed with 15 of them already completed. Although the case of Oromia is taken as an example, this discrepancy between trained CBWs vis-a-vis the facilities executed is also observed in the other regions. According to the FPCU, the incompatibility of manpower capacity and sub-project construction is due to inadequate assessment of CBW needs by woredas, who should be making the requests, and PCDP providing the training only on the bias of the training needs of woredas. Focal groups and key informants note that the number of sub-projects constructed in many woredas exceed the available human resources capacity. Thus, there are sub-projects that were completed including schools that are not providing services. The delays in the delivery of services have had a negative impact on the attitude change and the confidence developed as beneficiaries are disappointed.

Table 10: Summary of Woreda, Kebele and Community Level Capacity Building (type of

trainees and composition by region, number and percent of each category of trainees) Types of trainees

Number of trainees by region Total/National

Somali Afar Oromia SNNPR No. %Woreda Development Committee 342 144 127 61 674 6.15Mobile Outreach Team 246 338 173 98 855 7.67Community Members & Community Leaders 607 419 801 111 1938 16.55Community Project Management Committee 605 71 2550 482 3708 34.78Community Teacher 59 200 362 78 699 6.74Community Animal Health Worker 22 330 1130 20 1502 13.89Human Health Worker 40 242 5 - 287 2.74Traditional Birth Attendance 24 33 629 - 686 6.58Grand Total 1945 1777 5777 850 10358 100.00Share of regions in the total trained (%) 18.8 17.2 55.8 8.2 100.00Source: Computed based on FPCU of the PCDP data.

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Component 2: Pastoral Risk Management (US$16.43) Achievements under this component are rated marginally unsatisfactory. The protracted restructuring of DPPC led to unclear institutional arrangements and lack of leadership for the implementation of the component, impairing the overall effectiveness of the component. This component aimed to address pastoral risk management through: (i) the creation of a credible early warning system (EWS); (ii) the definition of ‘warning stages’ summing up different levels of threat; (iii) the preparation, in advance of a drought, of a woreda disaster preparedness contingency plan (DPCP) containing long-term activities to mitigate risk and reduce vulnerability, as well as ‘shelf projects’ to be rapidly implemented in response to specific warning stages; (iv) the preparation of a woreda disaster preparedness and prevention manual; and (v) a woreda disaster preparedness and contingency fund (DPCF). Sub-component 1: Community-based Early Warning System (EWS) Achievements are rated marginally unsatisfactory because of its late and generally ineffective implementation, resulting in the partial completion of its indicator targets. The EWS was to build on ongoing efforts by the Disaster Prevention and Preparedness Commission and some NGOs to establish, at the woreda level, systems for collecting and analyzing basic household welfare and natural resource, economic and conflict-related data, using a survey instrument designed for pastoral production systems. Two key indicators were specified under this sub-component:

(i) Timely delivery of remote sensed information to woredas. (ii) Food security assessment applied in threatened areas.

PCDP did not achieve the two indicator targets but made some progress in PCDP’s last year.

Indicator (i): The project established a pastoral EWS in 23 woredas and the EWS implementation manual was prepared in January 2008, ready for use. Indicator (ii): The EWS in Somali region was expanded to project woredas in Oromia and SNNPR and the livelihood baseline data were collected for all woredas.

Sub-component 2: Disaster Contingency Planning Achievements under this sub-component are rated marginally unsatisfactory. This subcomponent aimed to build capacity at woreda, zonal and regional levels to prepare DPCPs and manuals, monitor local disaster indicators, and manage funds. Two key indicators were specified under this sub-component:

(i) Disaster plans implemented as necessary. (ii) Cereal stocks used when necessary.

The project made some progress towards one indicator target and did not meet the other. Indicator (i): The indicator was partially met. All 23 DPCPs were prepared and are ready to be used, but were too late to influence decisions made under the DPCF. Indicator (ii): The indicator was not met.

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Sub-component 3: Disaster Preparedness and Contingency Fund (DPCF) Achievements are rated marginally unsatisfactory. The DPCF was to finance activities identified in the woreda DPCP in the project woredas. However, in the absence of woreda DPCPs and the manual of procedures for Fund use, the Fund was implemented in an ad hoc manner. The project then decided to use the fund for projects based on local and traditional knowledge of communities to reduce vulnerability to disaster and rapid reaction to crises in these areas. Project activities were financed, but without following the procedures set out in the Project Implementation Manual (PIM). This sub-component aimed to provide the initial 30 woredas with development and rapid reaction grants to finance activities identified in their DPCPs. Two key indicators were specified under this sub-component:

(i) Number of regional plans developed and approved. (ii) Number of investments executed (i.e. feeder roads, ponds, markets built, etc.).

Indicators have been met (but out of sequence). Indicator (i): 23 DPCPs have been prepared. Nine woredas are delayed due to security reasons. Indicator (ii): The DPCF financed 447 community-based sub-projects and emergency responses. The majority of these projects were implemented without community DPCPs. At MTR, no DPCPs were completed; yet the project reported that 422 sub-projects were identified, prioritized and implemented. The DPCF manual was not prepared as the money was already allocated.

Table 11: Disaster Preparedness and Contingency Fund Sub-projects by type (2003-2008)

Project Type On going Completed Total Water 44 221 265 Animal Health 0 1 1 Local Level Support 2 3 5 Income Generating 0 94 94 Irrigation 3 4 7 Community Road 9 43 52 Natural Resources 1 15 16 Restocking 0 3 3 Grain Store 1 3 4 Total 60 387 447


Table 12: Completed projects operational per project type (2003-2008) Project Type Operational Projects Water 90.1%Animal Health 100%Local Level Support 100%Income Generating 97.9%Irrigation 50%Community Road 100%Natural Resources 100%Restocking 100%Grain Store 75%Total 93.8%


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Table 13: Disaster Preparedness and Contingency Planning sub-projects by region (2003-08)

Region Project Completed Project Ongoing Total Somali 95 48 143 Afar 15 1 16 Oromia 149 6 155 SNNPR 128 5 133 Total 387 60 447


Table 14: Completed projects operational per Region (2003-2008) Region Project OperationalSomali 95.8%Afar 86.7%Oromia 89.3%SNNPR 98.4%Total 93.4%

Source: Government ICR and PCDP data, (June, 2008) Component 3: Project Support and Policy Reforms (US$7.01) Achievements under this component are rated moderately satisfactory. This component aimed to provide operational support and training resources to the FPCU in Addis Ababa and implementation units in the four regions, and funding for the M&E system and studies, and training on policy issues and institutional reform. Seven key indicators were specified under this sub-component:

(i) Frequency of reports. (ii) Accuracy of reports. (iii) Number of policies promulgated and effectively implemented. (iv) Effective advocacy for pastoralists at all levels of government. (v) Clear vision and strategy for pastoral area development. (vi) Adoption of transparent and inclusive planning and development activities in regions. (vii) At least 75 percent of results of participatory M&E meetings are used in decision-making for community investments, pastoral risk management plans, and other project activities, as measured by M&E reports.

The project achieved very limited results in terms of having an effective M&E system, but provided analytical support for pastoral policies and strategy development. The project met 4 out of the 7 indicators and partially met two others. Indicator (i): The project prepared quarterly progress reports on the financial and technical activities of the sub-projects. Indicator (ii): The indicator was only partially met, as reliable quantitative information from project woredas and regions was not readily available to analyze the outcome of project interventions. Indicator (iii): This indicator has been achieved by the GoE outside of project resources. The Pastoral Policy Gap Analysis (2007) served as a basis for GoE to prepare and implement pastoral policies.

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Indicator (iv): The Ethiopian Pastoralist Development and Governance Network was established to provide a forum for policy discussion on various issues of pastoral development. The network includes government agencies, international development partners, civil society organizations, think tanks, and researchers. The project contributed to the preparation of National Ethiopian Pastoralist Day, which is a national high-level advocacy event for pastoralists. Indicator (v): The project finalized several studies including a Pastoral Policy Gap Analysis, a Participatory Research and Social Analysis with special emphasis to Gender, “Role of Micro Finance for household food security in Dolo Woreda of Somali region”, and a social analysis, which served as a basis for the government to prepare its Pastoral Area Development Strategy. However, as stated in the MoFA Project Performance M&E Report, April 2006, most of these studies are more appropriate to the sedentary agriculturalists and all of them were researched and studied in the last 30 years in most of the pastoral areas. The effectiveness of these studies to influence positively the livelihoods of the majority of pastoralists is debatable. Indicator (vi): This indicator was partly achieved. Coordination was acceptable, but there were several issues with transparency of funds allocation (as discussed in the ICR text, Section 2.2). Indicator (vii): This indicator was not achieved. A participatory M&E system was developed, but it was not implemented. In addition, there was no uniform reporting format and some of the regions did not report project performance as they were expected to. The MIS was not utilized.

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ANNEX 2 Appendix 1

RESULTS FRAMEWORK (PROJECT DESIGN SUMMARY IN PAD ANNEX 1) AND

STATUS OF KEY PERFORMANCE INDICATORS

Indicator Reference

Key Performance Indicators Status as of Performance Indicators on September, 2008

End-of-Program Indicators

Growth and stability of agricultural and non-agricultural income and asset levels.

Environmental stabilization and improvement

Human and livestock health improvements

Drought/crisis mitigation capacity enhanced

Project Development Objective Outcome/Impact Indicators (fourth PDO Indicator is under Component 3, as in PAD Annex 1)

At least 80% of funds allocated to the Community Investment Fund were used for approved community micro-projects and inter-community sub- projects and inter-community sub-projects.

CIF was overcommitted with 25% of CIF subprojects remaining incomplete.

At least 80% of funds allocated to the Disaster Preparedness and Contingency Fund were used for approved sub-projects.

95% of IDA allocation under the DPCF disbursed, though most in response to emergency and not based on Disaster Preparedness and Contingency Plans (DPCPs).

At least 75% of community sub-projects requiring government support received it in a timely and adequate fashion, as measured by beneficiary assessments.

82 % of the Beneficiary Assessment participants indicated that they received capacity building training.

Component 1: Sustainable Livelihoods

Increased delegation of authority to woredas, kebeles and communities.

The project was successful in establishing 32 woreda development committees, which are functional, manage project resources and supervise sub-project activities at the woreda level. 592 kebele level project management committees have been established and are operational. The Beneficiary Assessment reported that 97 percent of the respondents (community/kebele level key informants) confirmed that community development committees were established.

Existence and use of transparent, accountable, demand-driven, decision-making processes at community level.

According to the Beneficiary Assessment, the project successfully enhanced empowered beneficiaries communities with 90 percent of them indicating that capacity building has enhanced their empowerment and decision making and have developed a feeling of ownership of sub-projects. The satisfaction of beneficiaries with the project expressed was associated with the creation of grassroots institutions

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that mobilize beneficiaries to organize themselves, initiate, manage and operate projects that facilitate the achievement of a common goal and to check/control any action that is against their interest (for example in avoiding corrupt practices in bid processing, purchases, etc.). The trainings have enabled beneficiary communities to articulate their local development plan.

Broader representation of hitherto marginalized groups in local affairs.

During the beneficiary assessment, 97 percent of the respondent indicated that all beneficiaries were participating in implementing and managing micro-projects. They also recognized that the project approaches gave emphasis to marginalized groups involvement in local affairs through enhanced participation of women and youth in community activities including the identification and selection of sub-projects. Nevertheless, women and marginalized groups have had a relatively passive role in the decision-making of pastoral communities, despite the orientation awareness. Despite the project support for women’s participation, their number participating in training and capacity building has been limited compared to men due to religious or customary rules of traditional societies.

Number of community development plans (CDPs) developed and approved.

A total of 500 community development plans were prepared at the kebele level.

Number of micro-investments and inter-community sub-projects executed.

1,025 micro-projects and inter-community micro-projects were completed and another 332 are in the process of implementation. Out of the completed projects, 823 are operational.

Literacy rates. Not measured. Access and use of mobile and stationary health and education services.

The indicator was not met. Access to stationary health and education services were not measured and no mobile services were supported during Phase I. Nevertheless, the project successfully constructed and rehabilitated 203 schools, 214 human health and animal health posts.

Training programs completed 3174 CBWs of animal health, community education and traditional birth attendants were trained.

New technologies developed and existing technologies adapted to local conditions

The project was successful in developing 6 new crop and forage varieties. The new crop and forage varieties were introduced to 780 agro-pastoral communities.

Technology adoption rate Not measured. Research contracts granted. There were no research contracts granted during this

phase.

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Component 2: Pastoral Risk Management

Timely delivery of remote sensed information to woredas.

Not achieved.

Food security assessment applied in threatened areas.

Not achieved. The EWS in Somali was expanded to project woredas in Oromia and SNNPR and the livelihood baseline data were collected for all woredas.

Disaster plans implemented. Not achieved but 23 DPCPs were prepared. Cereal stocks used when necessary.

Not achieved.

Number of Regional plans developed and approved.

23 woredas disaster preparedness and contingency plans were prepared and are ready to be used.

Number of investments executed (e.g. feeder roads constructed, ponds dug, markets built, etc.).

The DPCF financed 447 disaster preparedness and contingency sub projects.

Component 3: Project Support and Policy Reform

Frequency of reports. Quarterly progress reports have been prepared on the financial and technical activities of the project.

Accuracy of reports. Partially achieved. Number of policies

promulgated and effectively implemented.

The project finalized several studies including a Pastoral Policy Gap Analysis (2007), which served as a basis for GoE to prepare and implement pastoral policies. This indicator has been achieved by the Ethiopian Government outside of project resources.

Effective advocacy for pastoralists at all levels of government.

The Ethiopian Pastoralist Development and Governance Network was established to provide a forum for policy discussion on various issues of pastoral development. The project contributed to the preparation of National Ethiopian Pastoralist Day, which is a national high level advocacy event for pastoralists.

Clear vision and strategy for pastoral area development.

The project finalized several studies including a Pastoral Policy Gap Analysis (2007) and a social analysis, which served as a basis for the GoE to prepare its Pastoral Area Development Strategy. It will be adapted by regions in the second phase.

Adoption of transparent and inclusive planning and development activities in Regions.

Partly achieved. Coordination was acceptable, but there were several issues with transparency of funds allocation (as discussed in the ICR text, Section 2.2).

At least 75 percent of results of participatory M&E meetings are used in decision-making for community investments, pastoral risk management plans, and other project activities, as measured by M&E reports.

PM&E was developed but not implemented. There is evidence of community decision making for investment in most areas, the most exceptions being in the Somali region.

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ANNEX 2 Appendix 2

PROJECT DEVELOPMENT OBJECTIVE KEY PERFORMANCE INDICATORS

The PAD listed four KPIs for the achievement of the PDO. Although these KPIs were not clearly linked to the PDO, achievements under each are described below. (i) At least 80 percent of funds allocated to the Community Investment Fund (CIF) were

used for approved community micro-projects and inter-community sub-projects. The IDA allocation under the CIF has been fully committed and disbursed to about 1,357 micro projects. Eighty percent of the completed sub-projects were reported as functional. In several reports, including the MTR and a final report concerning IGA performance conducted in May 2008, concerns were raised regarding the sustainability of groups formed and projects selected: 50 percent of the groups were formed by the project and in substantial need of more training in organizational and business/financial skills (68 percent were reported with no training and many deprived of technical support); some groups did not know the amount of their grant as MSTs were managing their investment, and criteria for selecting the project was reported as unclear; many groups did not have management or business plans, with profitability reported as questionable or low; M&E was absent in groups’ activities. These assessments highlight that while the “funds allocated” target was reached, the degree to which all the sub-projects were “approved” by community participants is at best unclear. Thus, more work in the next phase is needed to ensure long-term group viability, a more demand-driven project selection process and ownership, and sustainability of investments. (ii) At least 80 percent of funds allocated to the Disaster Preparedness and Contingency

Fund were used for approved sub-projects. According to the final report of the “Review and Evaluation of CIF and DPCF Implementation of the PCDP” and financial records of the Project, by the end of 2007 about 86 percent of DPCF resources had been disbursed for approved sub-projects. This figure was reported to be 95 percent at the end of September 2008. However, community engagement in the DPCF design has been assessed as inadequate (as noted in the November 2007 Implementation Support Mission Aide Memoire and MTR June 2006), reflecting top-down approaches in pursuit of accelerating disbursement and meeting triggers. Most of the disbursements were made in response to emergency needs and not based on DPCPs as agreed in the PAD and PIM. This lack of a DPCP link compromises the envisaged objective of this sub-component that aims to strengthen community capacity to reduce vulnerability to emergencies. The absence of DPCPs caused confusion between the DPCF and CIF, partly resulting in the use of DPCF for CIF investments. Component 2 was largely about building community capacity on disaster risk management and the results suggest that from a community participation standpoint the process was not well done. (iii) At least 75 percent of community sub-projects requiring government support received it

in a timely and adequate fashion, as measured by beneficiary assessments. The Beneficiary Assessment report of May 2007 verified that 82 percent of surveyed beneficiary communities targeted in the first phase have received capacity-building support and have formally articulated their Community Development Plans using participatory approaches with facilitation of PCDP. On the basis of these plans there was direct project support to increase community management capacity and reduce community vulnerability to disasters (drought). In fact, the

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Beneficiary Assessment report used a variety of methodologies to reach stakeholders and triangulated results before concluding that over 90 percent of the communities and local stakeholders were satisfied with the PCDP approach and felt that the support was beneficial. It was clear from the project reports and field assessment that PCDP activities assisted/supported vulnerable and more marginalized communities, notably women, youth, and the poorest. However, it was noted in reports that follow-up and supervision could improve and that more sensitization and clarification of roles and responsibilities among stakeholders was needed. (iv) At least 75 percent of results of participatory M&E meetings are used in decision-

making for community investments, pastoral risk management plans, and other Project activities, as measured by M&E reports.

It was not found that results of participatory M&E meetings, as measured by M&E reports, were used in a manner that meets this KPI. First, the project’s M&E system was never effectively established. Second, this was even less so at the community level. However, there were community consultations that led to about 500 community development plans being prepared at the kebele level. These led to over 1,350 micro projects being approved and executed. Further, in most instances, after at least three years of the CDD approach being implemented in 23 project woredas (72 percent), DPCPs were developed. Thus, while on a strict interpretation of the KPI it might not have been met; there is evidence of community input influencing decision making for investments, risk management plans and other activities. This is so despite the fact that it is known that the DPCPs were completed with considerable assistance from individual consultants in a short period of time. Performance suggests that PCDP has partially met the KPIs and expected outputs. This is importantly so given that the targeted areas were generally not being served by other development institutions. However, it is recognized that the achievement of higher level objectives and significant improvements in livelihood systems and human development are more likely during the next phases of the Program. This is dependent on enhanced project focus on institutional and organizational dimensions that are critical to economic viability and sustainability. PCDP 1 identified seven performance triggers related to the satisfactory implementation of the project’s activities and the readiness of the project and national capacity to expand geographically. As discussed in the Phase II PAD, all these triggers have been met (see Annex 2 Appendix 3).

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ANNEX 2 Appendix 3

TRIGGERS FOR COMPLETION OF PHASE I OF PCDP (2003-2008)

Triggers Status (as of December 2008)

1. Beneficiary assessments indicated that 80 percent of communities and local stakeholders are satisfied with PCDP and wish it to continue.

Achieved. Over 90 percent of beneficiaries and local stakeholders are satisfied with PCDP approach and wish to continue.

2. At least 50 percent of communities in woredas targeted in the first phase have received capacity building support and have formally articulated their local development plans.

Achieved. 82 percent of communities in woredas targeted in the first phase have received capacity building support and have formally articulated their Community Action Plans.

3. At least two-thirds of woredas have submitted approved disaster preparedness plans (DPCPs).

Achieved. A total of 23 project woredas (72 percent) have developed their DPCPs.

4. At least one-half of the Community Investment Fund has disbursed for micro-projects, which were approved and successfully implemented.

Achieved. About 72 percent of the resources set aside for CIF has been disbursed for community-prioritized micro-projects that have been completed; and 80% of the completed sub-projects are functional.

5. At least one-half of the Disaster Preparedness and Contingency Fund have disbursed for sub-projects, which were approved and successfully implemented.

Achieved. About 86 percent of DPCF resources have been disbursed for approved sub-projects and 60 percent of the completed sub-projects are operational.

6. The Pastoral Development Network is active and operational and has made substantial progress towards harmonization of decentralized development approaches.

Achieved. The Ethiopian Pastoral and Agro-Pastoral Development and Governance Network (EPADGoN) was established in 2007, with significant civil society participation. Progress on decentralization approaches is being addressed largely through larger national programs (see trigger 7).

7. Government, through its reforms and support to phase I, continues to demonstrate strong support for decentralization and community-based development in pastoral areas, and has produced a pastoral area development strategy that has been validated at the Regional and local level through consultation with a broad spectrum of stakeholders.

Government continues to support national decentralization process with donor assistance, including through large programs such as Protection of Basic Services Project and Public Sector Capacity Building Program. Government included a dedicated section on pastoralist livelihoods in the PASDEP (2006), which was developed with consultation at regional and civil society levels. Government prepared a revised Policy Statement for the Sustainable Development of Pastoral and Agro-Pastoral Areas of Ethiopia (2008) to further guide implementation of the PASDEP of these areas.

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ANNEX 3. ECONOMIC AND FINANCIAL ANALYSIS INTRODUCTION 1. The Project addresses improvements in rural livelihoods in the Ethiopian lowlands in a holistic way through an integrated set of interventions with individual components and activities being mutually reinforcing and producing a diverse range of benefits. Pastoral Risk Management (PRM) measures, for example, increase the potential for profitable bio-off-take (i.e. meat, fiber, milk) and mitigate the effects of animal losses on society and the economy (e.g. disruption of schooling and other social services and reduced government exposure to post-disaster recovery costs). One also needs to estimate the intervening factors which may impede or enhance the effects of the Project components, such as external (climatic, epidemic or macro-economic) shocks, interventions from other national projects and overall changes in the macro-environment. 2. Given the complementarities of components, a calculation of economic benefits by component is of limited value as it does not illustrate the multiple anticipated spillover effects between the Project’s activities. The analysis, therefore, focuses on: (i) disaster early warning and response; (ii) IGAs; and (iii) the introduction of a process ensuring sustainability and cost-effectiveness of all project-supported investments. This annex presents steps that would need to be taken to ensure adherence to these principles. FINANCIAL ANALYSIS A. Sustainable Livelihoods Enhancement

(i) Community Investment Fund 3. The SLE component aims to improve access to and provision of basic public facilities and social services by establishing effective, transparent and socially inclusive mechanisms that facilitate pastoralists’ participation in prioritization and selection of investments in PCDP II woredas and kebeles. These investments in terms of sub-projects are characterized by: (i) their relatively small size in monetary terms; (ii) the demand-driven nature with an open menu to choose from; (iii) their multi-sectoral composition; and (iv) designs based on GoE standards. This makes conventional economic evaluation techniques not fully relevant. Poor communities often value a minimum level of social services and the associated building of human and social capital well above their actual economic value. Furthermore, the synergy of the development of a range of social services sub-projects across a woreda is difficult to capture. At the same time, the CIF’s objective also targets the institutionalization of mechanisms that facilitate citizens’ participation in the prioritization and selection of investments in local public facilities throughout lowland Ethiopia and the establishment of systems of social accountability to ensure transparent use of resources. The component is, therefore, seen as establishing the conditions and mechanisms for a delivery system of public facilities and social services provided by local woreda governments throughout lowland Ethiopia. The analysis of the CIF investments in Phase I revealed that most of the 1357 civil works implemented by community groups through sub-projects were cost-effective and timely relative to the alternative of government contracting their construction to private contractors.

(ii) Income-Generating Activities 4. The most important IGAs implemented during PCDP I in the kebeles and woredas in all four regions included: (i) grain milling; sheep and goat rearing, fattening and marketing; (ii) milk processing and marketing; (iii) grain purchase and reselling; and (iv) petty trading. IGAs under

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Phase I, however, were poorly managed and monitored by the project, with minimum attention to counterpart contribution and little or no attempt to revolve funds. A PCDP I – financed study is currently evaluating their financial impact. The examples cited below are representative of the types of investment made by pastoral groups under Phase I. 5. Sheep were fattened by pastoral women in Afar Region for a period of up to four months for sale to upland markets during festive periods (Christmas, Meskel, Ramadan etc). The concentrate supplementation of grazing sheep by Group 2 resulted in higher daily growth rates than Group 1 and a 40% higher return on initial investment.

Revenue from sale (per head)

(ETB)

Total variable cost/head

(ETB)

Net return/head

(ETB) Household: Grazing (plus 400g teff straws per head/day due to poor pasture) 73.5 44 29

Household 2: Grazing plus supplementation (200g teff straw, 50g noug cake and 50g wheat bran per head/day)

154 101 53

B. Pastoral Risk Management 6. In eastern Africa, disaster early warning and response interventions are very recent, and little empirical data are available to quantify the linkage between ex ante adaptation and mitigation measures. However, experience indicates that preventive measures are more effective than post-disaster arrangements. In this analysis, livestock mortality is used as a measure of pastoral risk, although the declines in health and productivity preceding livestock death (e.g. milk production, weight, conception rate) are likely to be equally important sources of risk. Since livestock account for most of the wealth of Ethiopian pastoralists, mortality provides a reasonable proxy for project-related PRM benefits throughout the Ethiopian lowlands. The direct economic benefits of managing pastoral risks consist of a reduction in livestock mortality and retention of livestock productive value, while wider economic and social benefits include, for example, the cost of post-disaster recovery including the social and financial cost of the urbanization of destitute pastoralists. The direct economic benefits of the PRM component can therefore be estimated as a share of the sum of the replacement value of adult livestock (including camels, cattle, sheep and goats) over project years. 7. Livestock mortality in “normal years” is estimated at 2% of total livestock per annum across livestock species. Livestock mortality during drought, which typically occurs one in five years, frequently exceeds 30% of the total herd. Early response measures (vaccination, subsidized transportation, water and fodder carting, early herd movement to unaffected areas) are estimated to allow for the commercial off-take of up to 10% of the herd and a reduction in losses of the remainder of 10–20%. 8. Assuming the incidence of drought every five years, a modest impact of 25% losses for 25% of the total lowland herd, the average annual cost is estimated at US$70 million. Assuming that the PRM is able to prevent just 15% of those deaths through drought-mitigation measures, the annual cost of the PRM component would be economic. This estimate is conservative, given that the analysis does not include the future productivity of breeding livestock or the impact of productivity losses due to morbidity. The main assumptions for the economic analysis are that: (i) the livestock

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base stays constant over the life of the project, including relative distribution between animal species; and (ii) the average replacement value per adult animal (February 2007) is constant throughout the project at US$400 per camel, US$320 per cow, US$30 per sheep and US$20 per goat.

Table 1: Costs and Potential Benefits: Scenario for PRM-based Livestock Mortality Savings

08/09 09/10 10/11 11/12 12/13

(US$ x106) (US$ x106) (US$ x106) (US$ x106) (US$ x106)PRM component: investment & recurrent cost 7.8 6.8 7.2 6.5 6.6

Total capital value of pastoral herd (US$ x106) 4,531 4,531 4,531 4,531 4,531

Cost of losses in normal year (2%) 90.6 90.6 90.6 90.6 90.6 Annualized cost of cyclical drought (assume 25% of livestock population affected, 25% loss and drought occurrence every 5 years)

56.6 56.6 56.6 56.6 56.6

Assume 15% of losses avoidable through PRM 8.5 8.5 8.5 8.5 8.5

C. Sustainability and Cost Effectiveness 9. Sustainability and cost effectiveness are two key requirements for every investment funded by the Project. The sustainability requirement for IGAs also includes the demand that the investment should provide a decent long-term financial income for the owner whereas, for pure public goods, maintenance and management are more important aspects. The following definitions of sustainability and cost effectiveness will guide IGA and social investments under PCDP II. Sustainability would require that: (i) The investment is profitable, namely that:

operational profits be positive: i.e. sales revenues minus (input cost + maintenance charge); financial profits be positive: i.e. operational profits minus depreciation I savings charge; financial profits per day of family labor should be high enough to offset alternative labor

opportunities; adequate savings are made to replace the investment good or an equivalent good at the end

of the expected life-time of the investment good. (ii) A maintenance plan for assets is established, including:

a description of planned periodical maintenance; and estimated cost of spare parts and servicing needed.

(iii) A risk analysis and mitigation plan is established, including:

a description of the three main risks to profitability; and a description of mitigation measures to avoid these risks.

(iv) An agreed management structure and plan is established, including:

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a simple worksheet addressing the requirements described above has been developed and will be included in the Project Implementation Plan, for use:

a. during the CDD capacity-building efforts as part of the curriculum; b. during the PRA exercises to assess sustainability with the communities; c. as the baseline for PM&E; and d. during the Community Action Plan (CAP) decision meetings of the WDC.

10. The WDCs will approve funding for CAPs only when sustainability criteria are met. This worksheet would be used only for “public” or “social safety net” activities of the CDD component. Credit cooperatives, which will be the primary financiers of private IGAs, will use credit manuals established under the IFAD-supported RUSACCOs movement. 11. Cost effectiveness would require that the least-costly assets be purchased that fulfill certain requirements which, bearing in mind the isolation, climatic and physical conditions in the project area, could be quite stringent and might exclude the cheapest available solutions (it is the cost-effectiveness of the investment over the entire required lifespan that matters). Public buildings will be built to government construction standards. The community procurement system that will be employed under PCDP II will facilitate the cost effectiveness of the CDD projects. A provision in the budget has been made to review and enhance the community procurement system and to develop manuals for the MSTs and community partners. The MSTs and woreda procurement assistants will receive training in the use of the community procurement system. D. Fiscal Impact 12. In the short run, PCDP II’s fiscal impact was expected to be relatively neutral, given that only around 15% of the total project cost would be financed by the Government, primarily in the form of deferred taxes. In the long run, it is expected that the fiscal impact of the proposed project would be highly positive, owing to the increased tax base with the rise in economic activities and the savings of public expenditure on climate-related relief efforts as a result of improved pastoral risk management. The Project’s recurrent cost implications would include the staffing and operation and maintenance of public facilities such as schools and public health and veterinary clinics together with the supporting equipment. These recurrent costs, which will be partially met through service charges to users, are already factored into the Government’s long-term budget plan, which aims to provide universal education and health services to lowland communities.

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ANNEX 4. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES

(a) Task Team members

Names Title Unit Responsibility/Specialty

Lending Daniel Sellen Task team Leader (TTL), Appraisal AFTR2 Team Leader Assaye Legesse Sr. Agr. Economist, TTL (2003 on) AFTR1 Team Leader Christine Cornelius Program Coordinator AFTR1 Operations Joseph Toledano Agri. Services Specialist AFTR1 CDD Rahel Lulu Team Assistant AFTAR Project support Graeme Donovan Agricultural Economist AFTR1 Food Security Robin Mearns Peer reviewer EASRD Peer reviewer Tjaar Schillhorn Peer reviewer ECSSD Peer reviewer Cees De Haan Peer reviewer ARD Peer reviewer Solange Alliali Country Lawyer LEGAF Legal issues Samuel Haile Selassie Sr. Procurement Specialist AFC06 Procurement Eshetu Yimer Financial Management Specialist AFC06 Financial Mnmt. Steve Gaginis Disbursement Officer LOAG2 Disbursement Tesfalem Gebreiyesus Procurement Specialist AFTPC Procurement

Supervision/ICR

Assaye Legesse Sr. Agr.Economist, TTL, 2003-10/06 and Dec. 2008

AFTAR Team Leadership

Azeb Fissha Consultant AFTAR Research Abiy Admassu Temechew Procurement Analyst AFTPC Procurement Basma Ammari E T Consultant AFTRL M&E Christine E. Cornelius Program Coordinator AFTAR Operations Edeltraut Gilgan-Hunt Environmental Specialist AFTEN Environment Eshetu Yimer Sr. Financial Management Specialist AFTFM Financial Mnmt. Eyerusalem Fasika Research Analyst AFTP2 Research Garry A. Smith Consultant ECSSD Supervision

Ingo Wiederhofer Sr. Operations Officer, TTL 10/06-11/2008

EASSO Operations

Ingrid Pierre Mollard Consultant AFTAR ICR J. R. Deep Ford Sr. Economist FAO ICR, co-author Jean Charles Amon Kra Sr Financial Management Specialist AFTFM Financial Mnmt. Malathi Jayawickrama Operations Officer (ICR, TTL) AFTAR ICR Mulat Negash Tegegn Consultant AFTFM Supervision Rahel Lulu Program Assistant AFCE3 Program Support Richard Olowo Sr Procurement Spec. AFTPC Procurement Samik Sundar Das Senior Rural Development Specialist SASDA Rural Dev. Serigne Omar Fye Consultant AFTH1 Research

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Samuel Haile Selassie Sr. Procurement Spec. EAPCO Procurement Sarah G. Michael Social Development Spec. AFTCS Social Dev. issues Tafesse Freminatos Abrham Financial Management Specialist AFTFM Financial Mnmt. Tesfaye Bekalu Wondem E T Consultant AFTU1 Consulting Serv. Wendy Schreiber Ayres Consultant AFTFP Operations

(b) Staff Time and Cost

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending FY02 18.93 73.45 FY03 40.44 147.70

Total: 59.37 221.15 Supervision/ICR

FY04 30.89 69.84 FY05 35.76 39.30 FY06 36.60 81.55 FY07 39.81 81.35 FY08 39.40 131.42 FY09 47.55 167.97

Total 230.01 571.43

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ANNEX 5: BENEFICIARY SURVEY RESULTS 1. Beneficiaries’ Assessment The scope of the beneficiaries’ assessment was limited to 93 kebeles randomly selected (i.e., 20% of the total 465 PCDP intervention kebeles) and proportionally distributed among the four project regions - Somali, Afar, Oromia and the SNNP Regional States. The kebele included includes:

35 kebeles in four woredas of the Somali National Regional State, 20 kebeles in five woredas of the Afar National Regional State, 27 kebeles in four woredas of the Oromia National Regional State, and 11 kebeles in two woredas of the SNNPR State

The selection of sample woredas within each region was been purpose oriented. Hence, a scheme that ensured meaningful representation of the PCDP woredas both spatially and in terms of year of entry, with relatively more emphasis on year one and year two entries (except for those in the SNNPR, where access has been a limiting factor). Therefore, to be more practical, in SNNPR, woredas that were anticipated to be difficult in terms of access (at the time of planning of the study) were excluded from the sampling process. Besides, adjustments were made to ensure that socio-cultural diversity was taken into consideration and also regions that had a minimum number of PCDP woredas were reasonably represented in the study. On the bases of this scheme, the following woredas were considered for the study in each region:

Jijiga, Ayisha, Shinile, and Qebrebeyah Woredas of the Somali National Regional State; Gulina, Afambo, Dubti and Gewane Woredas, and Argoba special Woreda of the Afar National Regional State; Fentale, Sawena, Arero and Dirre Woredas of the Oromia National Regional State; and Hamer and Benatsemay Woredas of the SNNPR State.

For each selected sample woreda, the list of all PCDP intervention kebeles/ communities were prepared in consultation with concerned woreda officers from the pastoral development office (PDO), in such a way to allow grouping of kebeles by pastoral/ agro-pastoral and then by type of intervention, micro project and sub-project. The required sample kebeles/ communities were then selected from this sample frame, using the linear systematic sampling procedure while also considering accessibility issues. Within each selected kebele/ community, the ultimate units of observation, i.e., both key informants and Focal Discussion Groups (FGDs) participants were sourced with similar procedure as those followed in the selection of sample kebeles/ communities. The methodologies followed in the study included a desk review, consultation with stakeholders, in-depth interviews of key informants/ resource persons, focus group discussions and general observation. General observations were made with the view to assessing the PCDP supported project interventions on the ground vis-a-vis beneficiaries' opinion while visiting kebeles/ communities selected within the study woredas. In-depth interviews were carried out with 17 regional level and 64 woreda level key-informants/ resource persons. The main resource persons included project coordination officers and mobile support team (MST) members of the respective regions. At woreda level, the main key-informants included members of the woreda development committee (WDC) and mobile outreach teams (MOT) members, and officers from relevant sector offices and NGOs/ CBOs. Key informants also included resource persons such as CDC members, elders/ community leaders and women

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beneficiaries, and officers from sectoral offices (such as the DAs and representatives of schools, health posts, veterinary posts, water) and CBOs. 191 key informants from members of the beneficiary communities (including CDC members), and 53 kebele/ community level stakeholders were selected for the in-depth interviews based on a pre-designed questionnaire. The community/ kebele level FGDs formed one of the principal data/information collection methods. The purpose of the FGDs was to generate data/ information through a participatory technique to complement secondary and primary data collected in the survey. Based on a pre-prepared questionnaire, a total of 214 FGDs were conducted for the whole study in the four project regions:

31 focus groups from CDCs; 71 focus groups from Women; and 112 focus groups from Men and Youth.

Each focus group involved 5 to 7 discussants. This was formed, as stated above, separately from CDCs including members of the different sub-committees, i.e., community project management, procurement and control sub-committees; as well as other segments of the community, i.e. women, Men and youth and the disadvantaged beneficiaries represented in the respective FGDs. Conclusions Progress made by PCDP towards achieving its development objectives has been encouraging. The CDD approaches used in relation to investment of micro-projects/ sub-projects identification and implementation has improved access to services and reduced vulnerability. Project implementation has contributed to community empowerment and effective decentralization of development project preparation and decision-makings. The CDD approach related to empowerment of women and the disadvantaged in decision-making and development project preparation has increased. The approach has made them the direct implementers and owners of their projects. The CDD approach has contributed to community empowerment in project planning and implementation, asset increase, self-confidence and decision-making abilities. In this regard, the resource persons/ key informants and FGDs believe that the beneficiary communities and local stakeholders are satisfied and wish to continue with the CDD approach. The capacity building, participatory method used has empowered the beneficiary communities including women. Local Authorities, woreda and kebele level institutions and the beneficiaries themselves selected all development projects, and implemented, and managed them. The participation of women in project selection and in development-oriented meetings has increased. Women’s participation in project identification, prioritization and implementation has been increased from time to time. Women were working as members of CDCs procurement workers, cashiers and others. The PCDP projects were the first community developed projects, implemented and managed and used according to community needs. The beneficiaries have developed confidence in project preparation, implementation and management after the CDD approach. The key informants' interviews and FGDs participants, all confirmed that communities were able to prepare their development projects, and implement and manage them. In the case of the project identification and implementation/construction of physical assets/ the project went as intended. But, furnishing with equipment and furniture, and assigning trained workers in the areas of human and animal health are needed for the completed projects to become operational.

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There was no problem with the CDD approach. If any, there were project implementation problems, like ignoring beneficiaries' long-years of experience, for example in water pond development areas, bypassing their advice, and delaying completion of projects. These problems were a reflection of frequent personality changes at woreda levels. The WDC members change, and woreda technical expert turnover was reported to be high. This condition has resulted in the conducting of training and orientations for the new comers on the CDD approach, project objectives and implementation methods. This took time and resources, and created delays in the project implementation and service delivery. Besides, the prolonged delay in commencing the intended services of some projects, following the formal transfer to the concerned sector offices, is also attributed to the delays in recruitment of the necessary staff and or lack of financial capacity on the part of the sector offices, which are the recipient institutions. Generally, the number and quality of projects proposed by the community have improved over the years. Approval of projects and their execution improved as experience was gained through time. The beneficiary communities have increased their capacity in project development and implementation. But they need the constructed projects to start providing services as intended. As stated above, because of limited capacity, mainly in terms of finance, stakeholders could not furnish and equip some of the projects completed to start service delivery. Community members particularly in the project management sub-communities were reasonably well informed about the project objectives and implementation arrangements. The orientation and or introductory meetings and PLA training facilitated by the MSTs and MOTs have rendered many community members the ability to analyze their most immediate development needs and prioritize and develop related development projects. Recommendations Beneficiaries are satisfied with the CDD approach and also the capacity building and empowerment that enabled them to identify, select and implement projects according to their priorities and to manage their own development. However, there are cases in which sub-projects failed because they were selected and implemented without the consent of beneficiaries. Apart from the need to create adequate awareness in all beneficiaries in order to develop a clear understanding of the role, proper attention should be given to the training and capacity building of the CDC members. As a result, beneficiaries will be more empowered to resist any intervention against their interest during the selection and implementation of sub-projects and also to avoid the misuse and/or mismanagement of project funds by local authorities. Women and marginalized groups have had a relatively passive role in the decision making of pastoral community activities. Therefore, these groups have to be given the chance to voice and select projects without being dictated by other members. Despite the orientation and awareness creation provided by the PCDP staff, the priorities of these groups have been overlooked during the identification and selection of PCDP financed sub-projects. For example, it was noted from the key informants and FGD that men often dictated discussion and prioritization of sub-projects. As the priorities of men and women could differ, the selection/financing of sub-projects should take into account the extent to which priorities of the poor and women have been targeted, and they are able to select projects of their own choices. In some of the sub-project implementation arrangements (bid processing, procurement and supervision, and construction contract negotiation and inspection), the role of beneficiaries and also the CDC members was passive. These weaknesses were partly due to the vested interest of local

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authorities to engage in corrupt practices, and partly due to the apparent limitation of skill/capacity of the CDC members. Therefore, proper attention should be given to the training of the CDCs to enable them to undertake the job and also to strengthen beneficiary communities’ capacity building and empowerment so that they would have more awareness and a clear understanding about their decision making role. As noted from key informants and also the participants in the FGD, the duration of the capacity building training was too short to grasp the messages of the trainings. This was particularly a problem for the illiterates who were unable to write/record and read what they learned during the training. Therefore, while training programs should be given adequate duration including the provision of refreshment courses, the inclusion of literate individuals in the selection of training participants will be useful since they can take notes/record the subjects during the training, and help illiterate participants to grasp the subject in joint discussion sessions. Apart from the orientation and training, the extent of community capacity built and the empowerment achieved would depend on the technical support of the MSTs and MOTs, which in turn depends on the timing and frequency of visits to sub-projects. Thus, the proper timing and increased frequency of their visits would be crucial in order to supplement the training skill and further strengthen community capacity through the PLA during the sub-project implementation. Provision of training/ orientation once or twice should not be taken as a sufficient condition for capacity building & empowerment to enable pastoral communities to implement CDD approach. Institutionalizing the CDD approach would require continuous training for capacity building that suits the categories of stakeholders (ordinary beneficiaries, the CDC members that undertake management, procurement, control sub-committees, and women IGA group leaders), WDC members, MOTs, development agents, teachers/school directors and health extension workers. Along with this, adult literacy training should be focused to enable the pastoral communities to read and write, which would increase the impact of PCDP implementation. Due to the fact that PCDP interventions are demand-driven, the number of sub-projects that beneficiaries identified, selected and proposed for funding far exceeded the available project resources. In some cases, beneficiaries pressurized WDCs to make credit arrangement with contractors for project constructions. As a result of too many projects that were implemented simultaneously, follow up and supervision of sub-projects by MSTs/MOTs was unthinkable, and hence implementation often deviated from the planned course of action. Therefore, PCDP coverage and project financing should be planned taking into account the available project resources (finance, manpower capacity, time, etc.) required to implement sub-projects efficiently and effectively. Micro-projects initiated, identified and prioritized and approved for implementation should take into consideration the availability of budget in advance, otherwise delays in implementation of micro-projects due to the shortage of cash flow may dissatisfy beneficiary communities and lead to a loss of hope in PCDP. In this regard, project construction and training of workers to be assigned, equipment provision, and furnishing of completed projects should be accomplished side by side to enable them to commence operation without delays. Coordinated and integrated efforts have to be made at local government level to fulfill/assign qualified staff for community and inter-community micro-projects, which are completed but are not yet providing services. Prior to construction of facilities (such as human health post, animal health post, school) which require staff assignments, they should be equipped and furnished, and sector offices should be consulted so that they be able to plan in advance to incorporate the sub-project operation in their programs.

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Awareness and skill upgrading of communities should be given adequate attention to enable them to operate, manage, use and take care of and maintain micro-projects like water points, schools, health posts, feeder roads, rangelands etc., to ensure their sustainable functioning as a result of the ownership feeling and confidence of the micro-projects that develop within the community. WDCs chaired by Chief Woreda Administrators have long lists of duties and responsibilities in the process of PCDP implementation as identified in the Project Implementation Manual. Such duties and responsibilities would not be accomplished without adequate time, commitment and dedication. WDC members and particularly the Chief Administrators are occupied with other administrative and political issues, and the time they have allocated to PCDP implementation has not been adequate. PCDP implementation processes also require a responsible person for the project, and it would be advisable to appoint a person as a Deputy Administrator to a PCDP intervention woredas and to chair the WDC with the full responsibility for PCDP. Income generation schemes were major interventions to diversify pastoral livelihoods and improve income and employment. These schemes must be built on the basis of viability and profitability, with better capacity building and training of members, consistent with best working modalities and strategies that can boost employment and income of the poor pastoral and agro pastoral communities. Local market demand and resources availability should be appraised before implementing the projects. PCDP is not represented in woreda project implementation, and the structure ends at the regional level. The woredas experts, including woreda council members were looking at PCDP activities as their second duty. The MOTs were assigned from other departments and have other assignments from their parent organization. They may be sent to other areas for some type of work, including out of the region, for long periods of time. Most MOTs left or changed their working place and were replaced by new ones, who also needed training. These issues need close attention; otherwise the project would not be implemented as intended. In some areas, the woredas facilitators of the CDD approach tend to implement procurement and financial management for the communities. There is a tendency for woreda level facilitators to procure contractors on behalf of the communities. This takes away from community capacity to manage their finances and procurements. Also, the procurement guidelines to be used by communities are beyond community capacity, and do not consider the remoteness of the communities, and the availability of contractors in the areas. Hence, the procurement procedures need to be revisited. In almost all of the study regions, the woredas have a great interest to include more kebeles more quickly in the PCDP. T he case of Argoba special Woreda is a typical one and appears over ambitious. In order to include more kebeles to benefit from the project, enough MSTs, MOTs and other technical staff such as construction supervisors capable of following the progress of the approach should be in place beforehand. The PCDP has been designed to strengthen development planning and implementation at both the community/kebele and woreda Level. However, means of transportation and per diem to field works including WDC members and MOTs should have been known and set aside for this purpose and used. Otherwise this will contribute to delays in project implementation. The experts employed and assigned to woredas by PCDP were not working/obeying and or gave little attention to woredas. Most of them were not on their duties and not going to the office. Their offices were closed most of the time. The woreda council/administrators had no means of keeping them in the office. The coordination between the woreda-assigned PCDP staff and woredas staff needs to be revisited.

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PCDP sub-projects have neither an independent primary owner nor are they integrated into the regular local government/sectoral offices’ activities upon completion, and yet formal transfer of the projects has been made to the concerned sectoral offices. As a result, there is a loss of momentum over time, thereby challenging the original hopes, expectations, and motivations of the beneficiary communities. Moreover, hidden motives of competition over resources were observed among the various government sectoral offices that constituted the WDC, mainly due to unequal access to actual decision-making on project resources. Thus, this may need to be improved through the implementation of PCDP activities, and should be led by an independent institution for which the project is a primary and priority responsibility. Monopoly of decision-making over project resources by the PDO has adversely disabled other equally important sectoral offices from active involvement and participation in the project's implementation and management. The PCDP may, therefore, consider financial disbursement to line offices that are most relevant for each project component (for instance, money for health post construction through the health offices). In line with the findings and recommendations of the mid-term review mission, a zone level task force is being established in some of the zones, especially in Oromia. The task force is expected to provide supervisory and technical backstopping support to woredas. In two zones (Bale and Borana), the project has already provided financial and equipment support to the respective Agriculture and Rural Development Departments to coordinate the process. The plan was that each zone would begin formal participation as of the third quarter of 2007. There is a need to speed up the process for establishment of the task force in all zones of Oromia and other regions where the zonal structure is still operational. Other recommendations include: the need for a clearly defined organizational structure and a study-based benefit package for

PCDP staff; The CDD approach needs some adjustments in project approval and funding, and the budget

ceiling for sub-projects; PCDP should be strengthened with capable and dedicated staff who receive motivating

remunerations; The powers of the CDCs should not be allowed to be taken over by government administrative

bodies. CDCs should only be responsible to the electorate; Some arrangements need to be made to have projects implemented in the form of "a minimum

package", so to say. In other words, when one thinks of a school, for example, one should also think about the availability of water in the vicinity or whether there is a need to propose a water supply project as well. The same needs to be done about the availability of acceptable accommodation for the school staff and health workers as these will invariably have to come from outside;

Women, men, and youth have been requesting to be organized in income generating activities. They should be assisted to organize themselves and given the necessary training; and

To gain further benefits from the training for beneficiary communities, CDC members or a few selected community members need to be trained as Trainers to ensure that training is done on a continuous basis and that beneficiaries assume greater responsibility in this regard.

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ANNEX 6. STAKEHOLDER WORKSHOP REPORT AND RESULTS Not applicable

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ANNEX 7. SUMMARY OF BORROWER'S ICR INTRODUCTION The Pastoral Community Development Project (PCDP) is an integrated and comprehensive development project signed between the Federal Democratic Republic of Ethiopia, International Development Association (IDA) and the International Fund for Agricultural Development (IFAD) to improve the livelihoods and reduce their vulnerability to both manmade and natural disasters of the pastoral and agro pastoral communities inhabited in the arid and semi arid lowlands of Ethiopia. The project was the first phase of the first fifteen year program that has been implemented from 2003 up to 2008. The project has been declared effective since 30th September 2003 commencing with ten woredas and gradually expanded to 3021 woredas. The project is financed by a grant and credit obtained from IDA and IFAD respectively, and the contributions of the Government of Ethiopia (GoE) and the beneficiary communities. The total project cost was 60 million USD, of which 50 per cent was from IDA, 34 per cent from IFAD and the remaining 16 per cent from GoE sources The first phase of the project was completed in 2008 and thus an attempt has been made to develop this implementation completion report. Accordingly, project achievements, implementation problems encountered at the time of project implementation, lessons learned that will be used as an input for future interventions and other pertinent issues are presented below in greater details. PROJECT OBJECTIVES As clearly stipulated in the PAD and the PIM, project interventions are designed to empower communities, woredas and Regional governments to better manage local development in pastoral areas, with the aim of increasing, stabilizing and diversifying incomes, improving infrastructure and increasing access to public services. This was envisaged to be achieved through a community-based development planning process linked to a community investment fund, which flows through local government. The Project also aimed at supporting a participatory disaster management program to reduce the risk of pastoral communities to drought and other natural threats to livelihoods. These efforts were also planned to be supported through policy reform, investment in health, education and veterinary services, and applied research into dry land agriculture and natural resource management. While recognizing the central role that animal production plays and will continue to play in pastoral life, the PCDP had no plan to place exclusive emphasis on increasing incomes and productivity from livestock. The Project also planned to identify and develop alternative sources of income, including sedentary agriculture and non-agricultural activities by both men and women in pastoral communities, with a view to more sustainable use of resources and improved livelihoods in the lowlands of Ethiopia. PROJECT WOREDAS All project woredas were covered within three years in a phasing manner, whereby in year one, year two, and year three the project was operational in 10, 22 and 32 woredas, respectively. Out of these 32 woredas, Somali, Afar, Oromiya and SNNPR had a share of 14, 9, 7 and 2 woredas, respectively. In the selected 32 woredas, the project was operational in 516 Kebeles.

21 Due to the split of project woredas the total number of woredas increased to 32.

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PROJECT PERFORMANCE BY COMPONENT Sustainable Livelihood Enhancement Activities under this component include but not limited to water development; construction and rehabilitation of schools, animal & human health institutions; supporting of income generating schemes; development of local support services; road construction; and small scale irrigation construction and rehabilitation works. Accordingly, in the reporting period, 1,357 different sub-projects have been executed by the respective project woredas. Of the total executed 1,357 sub-projects; 1,025 (76%) sub-projects are completed, out of which 80% (823) are operational. Pastoral Risk Management The Pastoral Risk Management component comprises three inter-linked sub-components namely, the Community Based Pastoral Early Warning System (PEWS), Disaster Preparedness and Contingency Planning (DPCP) and Disaster Preparedness and Contingency Fund (DPCF). While the community based PEWS is very helpful to monitor the vulnerability of pastoral population to different disasters so as to give early warning about the impeding threats and trigger appropriate actions, DPCP and DPCF are meant for preparation and financing of risk management related activities to reduce the vulnerability of pastoral population in the project areas. Pastoral Early Warning System (PEWS) The objective of Pastoral Early Warning System is to monitor the vulnerability of pastoral population so as to give early warning about the impeding threats and trigger action to reduce and manage those threats. PCDP has planned to extend the scope of PEWS model developed in Somali region by Save the Children UK to include early and rapid woreda level reactions to developing crises, especially non-food responses, in order to build a comprehensive disaster management system initially in the PCDP Woredas in four Regions that will then be extended to all Woredas in the lowland areas of the country. Accordingly, the following major activities were performed:

Preparation of PEWS implementation manual Recruitment of woreda early warning and training officers to support the Woreda EW activities Expansion of the experience of PEWS of the Somali Region to project Woredas in Oromia, Afar

and SNNP regions Participation in PEWS establishment in Afar region Participation in baseline data updating in Somali region

Disaster Preparedness and Contingency Plan (DPCP) In order to reduce the vulnerability of rural population in the pastoral areas to droughts and other disasters and to prepare, in advance of crisis for rapid reactions and reduce its impact, disaster preparedness and contingency planning has been taken as an important element in the risk management component of PCDP. The mechanism by which this can be achieved is by preparing local disaster preparedness and contingency plans designed through participatory planning at woreda level with the capacity building and technical support from PCDP. Under this sub-component the major activities performed are:

Preparation of disaster preparedness and contingency planning manual Preparation of woreda level DPCPs for 23 out of the 32 project Woredas As this sub-component highly depends on the establishment of the pastoral early warning system

for getting information on the food security situation of the area, it has not been implemented as per its intended plan. But currently 23 Woredas’ DPCP are prepared and distributed to relevant stakeholders at least to serve as a good starting point and learning area.

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Disaster Preparedness and Contingency Fund (DPCF) With the objective of financing mechanism to enable projects in the woreda disaster preparedness and contingency plan (both long term and rapid reaction shelf projects) to be under taken in a timely manner, Disaster Preparedness and Contingency Fund is one of the sub component in the risk management component of PCDP. In the reporting period, 447 DPCF projects executed, 387 (87%) completed and 363 (94%) projects became operational. Activities supported under this fund include water development, rangeland management, community road construction, animal restocking and natural resource development.

Regional Distribution of DPCF Sub-projects by Status from 2003 to 2008

Source: Regional report

Project Support and Policy Reform This component had three linked subcomponents, Project Management and coordination; Participatory Monitoring and evaluation; and Policy analysis and reform. Project support and coordination PCDP I have been coordinated and catalyzed by a semi-autonomous coordination unit (PCU) based in and managed by the Ministry of Federal Affairs (MoFA) at federal level and Pastoral areas Development Coordination Bureaus/Commission at regional level. The Federal Inter-Ministerial Board (IMFB) was expected, amongst its other duties, to act as the Steering Committee to the PCDP. Despite this, the Steering Committee, have been met at least biannually and was responsible for Project policy and strategy formulation, inter-ministerial and interregional coordination of Borrower’s governmental actions, and the oversight of implementation activities under the Project. All PCDP I regions were also expected to oversee the project implementation in their respective region through formally established steering committees under the pastoral areas development bureaus/commissions. Though, not as expected, efforts were made in the first phase to undertake various coordination activities at various levels in supporting project activities. The project had effective management and administrative structure at the federal and regional level who were seeing the routine day to day project activities and management that has been undertaken at woreda and community levels .At all levels the project staffed with skilled professionals and other supporting staff equipped with the necessary office materials and equipments, transport and communication facilities. At woreda level, the project employed assistant procurement officers, assistant finance officers and early warning officers, who were responsible for the routine management of procurements and financial transactions at woreda and community level. In addition to this, regions had Mobile Support Teams (MST) that served the woredas and communities, though their number was not in accordance with the number of woredas they were expected to facilitate. Otherwise, the project implementation was directly embedded into woredas local government structure through the Woreda Development Committee (WDC) for community

Region

Status of Sub-projects Remark

Executed Completed Operational On going

Somali 143 95 91 48

Afar 16 15 13 1

Oromia 155 149 133 6

SNNPR 133 128 126 5

Total 447 387 363 60

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sub-projects approval and technical support from the Mobile Outreach Team (MOT) composed of experts from each sectoral desk. At community level, project management committees were organized to plan, manage and implement community sub projects. The project management committee and procurement committees have got the required training before they start their duties. Policy Reform and knowledge building on pastoral development Policy reform and analysis subcomponent acknowledged the existence of knowledge gap amongst national policy planners concerning the dynamics of pastoralism, regularly leading to poor policy choices and envisaged to address current policy constraints by:

Empowering pastoralist leaders to understand the dynamics of their livelihood strategies in relation to the broader policy environment and to articulate this at grassroots and national political levels;

Funding a series of policy studies that accurately inform policy decision making of the dynamics and diversity of Ethiopian pastoral systems; and

Investment in the knowledge system that will ensure that lessons learned in pastoralist development, past and present, would be retained, internalized and reflected in policy reform. Accordingly, FPCU commissioned various policy studies for different consultants. This includes Participatory Research and Social Analysis with special reference to gender issues, Participatory Monitoring & Evaluation Manual, Pastoral Early Warning System, Disaster Preparedness and Contingency Plan Preparation Manuals, and Community Procurement Manuals. The documents produced by these consultants have great contribution in bridging the existing knowledge gaps concerning pastoralist and their development issues. OUTCOMES OF THE PROJECT Adequate and reliable quantitative information from project woredas and regions was not available to analyze the outcomes of project interventions. Discussion on this section will, therefore, be by and large based on qualitative indicators. The analysis is made based on the major sub components which are believed to have significant and immediate outcome. Sustainable Livelihoods Enhancement (SLE) Projects executed under this sub component obviously built and strengthened the livelihoods of the intended beneficiaries directly or indirectly. Outcomes in terms of enrolment, reduction in drop out, changes in patterns of diseases, reduced workloads, and improved income & employment are direct indicators of changing livelihoods of target beneficiaries from worse to better. The schools so far constructed and completed in the last five years are now functioning and contributing to the increased enrolment of children and access to education in those pastoral areas. In total, about 20,000 school aged children of both girls and boys have got access of education in their vicinity in the four project regions of Somali, Afar, Oromiya and SNNPR. Similarly, with increasing number of schools in the project areas, the distance to schools reduced particularly for girls. There is now at least one primary school per project kebele as a result of PCDP intervention. The integration of schools with other basic infrastructure sub projects such as potable water supply, human and animal health facilities further strengthened access to education which resulted in gradual growth in enrolments, and strengthen permanent settlement. Such package infrastructure has contribution to permanent settlement of the pastoral families particularly children and women as water and health services are now available around temporary settlement areas. Mobility of children will reduce and this have already proved to improve enrolments. Women also start to engage in non-farm activities like grinding mill, milk collection & marketing, vegetable production, animal production and marketing (mainly cattle fattening), petty trading and hand crafts, which add

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assets and income to the household economy. In some areas the location of the basic services particularly schools encouraged most of the households to send their children to schools. The infrastructures implemented with the support of PCDP were located around and within the settlement areas of most of the pastoral households settled temporarily or permanently. The water supply points developed so far undoubtedly contributed for the reduction of workload of women and frequent mobility and waterborne diseases. So far about 200,000 people have been benefited from the constructed water supply schemes. In some cases reduction in morbidity rates could be the outcome in most of the areas. Integration of potable water supply with construction of human health posts and schools further improves livelihoods, health, income and employment of the beneficiaries. Besides, in most of the project areas, mobility period is now reduced to significant level due to availability of water. For example, in some areas of the Somali region, most of the households used to move every three months in search of water points, which means four times a year. However, due to improved availability of water points since 2005, the frequency of mobility was now reduced to thrice a year. Besides, the number of family members moving with their livestock also reduced to a certain extent. In most cases those able bodied especially adult male are moving with their livestock as compared to the pre-project period. As a result, children and women who remain behind in their settlement areas are now able to attend schools and engage in non-farm activities, respectively. Poor households in the pastoral areas suffer from lack of diversification of income, employment and food insecurity. Consequently, over 90% of the households depend mainly on livestock production and related activities with no other alternative income and livelihood sources. Income generating schemes, therefore, are best alternative strategies to improve income, employment and food security status of the community. Besides, the contribution of income generating schemes in building resilient pastoral economy, proved to reduce women dependency on their husbands and food insecurity. The number of IG activities financed by PCDP is now increasing over wide areas of the project areas. Current ongoing and completed projects will contribute to improved income and employment for more than 5,000 households (more than 25,000 people). On the other hand, the installation and expansion of grinding mills, petty trading and handicrafts, vegetable production, milk collection and product marketing IGS purely serve the destitute and poor pastoral women not only to improve their access to alternative income and employment but also to improved health, food and nutrition status of the beneficiaries. Access road construction and rehabilitation is another aspect of the livelihood improvement with considerable impact on transaction of goods and services, stabilizing markets, opening access of the community to basic services, disaster mitigation and emergency humanitarian supports. The construction and expansion of road networks has a multipurpose advantage in these areas and its benefit covers the whole population and even the adjacent and neighboring communities and woredas. The completion of the currently executed sub-projects believed to benefit over 100,000 populations. Beyond the project kebeles, a number of communities could also benefit from the multiplier effect of road network and access. Improved road networks also have a positive impact for improved health and adoption of livelihood transforming technologies, linkages with the highlands that might approve the marketability of produces of pastoralists. Disaster is almost part of the livelihood of pastoral communities, not only due to vulnerability of pastoral livelihood and fragile ecology but also as a result of lack of access of most of the pastoral areas. These areas suffer from the grave consequences of recurrent drought and famine due to delayed humanitarian support attributed to lack of access roads to the pastoral areas.

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Pastoral Risk Management Like the SLE component, sub-projects implemented under the pastoral risk management component have also positive potential impact on the livelihoods of the pastoralists. Pastoral risk management sub-projects are drought proofing sustainable and durable socio-economic infrastructure with the objective of sustainable prevention of severe negative consequences of natural risks and disasters. Water resources development in these areas were meant to reduce human and animal sufferings, frequent mobility and distress as well as forced migrations, food insecurity and malnutrition as well as epidemics and diseases occurring due to lack of access to water and food during drought periods. Water points constructed under this component improved the availability and adequacy of water in critical drought periods. The indirect impacts and outcomes of this intervention definitely reduced the rates of human and animal morbidity and mortality, reduced the workload of pastoral women, improved access to other alternative income and employment opportunities. Small scale irrigation development and expansion is another community sub project with long term impact on coping up risks and livelihood stresses. These sub projects are planned and implemented with active and direct participation of communities who already started permanent settlement and crop farming system in the lowland areas. Apparently, they contributed for improved food security, nutrition, employment and income. The small scale irrigation development, expansion of access roads and other drought proofing infrastructures have significant impact both to mitigate and control drought risk effects and improve livelihoods. In general, the impact and possible outcomes of PCDP supported projects could be rated as very encouraging. It is believed that of the total 1,182 community and inter-community operational projects a total of over one million people in the target areas benefited directly or indirectly from the multi dimensional and integrated projects supported by PCDP since 2003. CAPACITY BUILDING ACTIVITIES A CDD approach has been applied to empower communities to articulate local priorities and to manage development resources. Empowerment is the expansion of assets and capabilities of poor people to participate, negotiate, influence, control and hold accountable institutions that affect their lives as CDD will help ensure local ownership and sustainability of project interventions. The CDD approach entails genuine participation and empowerment of the communities and grass root institutions including government, NGOs, community based organizations and individuals. The pastoral areas, on the other hand, are characterized by lack of efficient institutions, and most of them are with weak implementation capacities. Most of these areas have no adequacies even to rudimentary development initiatives and marginal to participation, decision making and management of their development priorities. Such critical gaps are one of the reasons for PCDP to focus on capacity building activities. For the last five years, the project has provided intensive technical capacity building trainings for the local level government agencies and community management committees and other traditional institutions, in building their social capital.

A number of community members and leaders were trained in various disciplines including need assessment, project identification, proposal preparation, project implementation & management, finance, and community procurement procedures. Awareness creation through such trainings, successive workshops, frequent support visits, and onsite supervision greatly improved capacities

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of community in sustainable management of community based projects. Local governments now have better capacity to plan and manage development activities than the pre-project period.

PCDP also focuses on training and capacity building activities for institutions at the grassroots to ensure efficient service delivery. Training of teachers, animal & human health workers, and traditional birth attendants proved effective means in improving the existing poor service delivery consistent with the circumstances of the pastoral areas (see the details in Annex IX-X)

Government institutions are better equipped with communication and transportation facilities, and other essentials, to better manage their development activities and to provide necessary services to the public. Most of the institutions are able to reach remote communities and areas, which were once inaccessible and unreachable.

To sum up, the impact of capacity building activities is significant and fundamental to sustainability and enhanced development in the lowland areas. FINANCIAL MANAGEMENT PERFORMANCE Financial Management. The project has developed a financial management manual, which was accepted and approved by the World Bank. Disbursement is made in accordance with the procedures and policies set out in the World Bank’s disbursement hand book. So far, the project follows transaction-based disbursement (SOEs) method, instead of report based disbursement method. Eligible project disbursement has been made in accordance with the six categories of goods, consultancy/audit, training, community grant, risk management and operating costs. Fund Utilization. For the last five years, a total of USD 53,331,933.68 has been utilized (99 % of the total project fund). Of this, the shares of Somali, Afar, Oromiya and Southern region is 39%, 29%, 22% and 10%, respectively..

Status of project fund disbursement by financers (USD$), as of June 2008

Category Category Description

Allocated Combined

Total Allocated Disbursed Combined Total

Disbursed

IFAD IDA IFAD IDA Amount %

1 Works 0.00 0.00 0.00 0.00 0.00 0.00

2 Goods 938,933.10 3,148,248.65 4,087,181.75 669,978.68 2,841,461.15 3,511,439.83 86

3 Cons/Audits 521,629.50 744,189.43 1,265,818.93 472,595.33 693,402.30 1,165,997.63 92

4 Training 387,496.20 691,531.68 1,079,027.88 387,011.59 558,628.77 945,640.36 88

5 Community Grants 15,842,633.10 21,982,957.50 37,825,590.60 13,266,308.37 18,545,125.37 31,811,433.74 84

6 Risk managements 2,190,843.90 3,576,888.00 5,767,731.90 2,236,302.09 3,524,177.01 5,760,479.10 99

7 Operating Costs 1,579,792.20 2,393,534.22 3,973,326.42 1,575,620.01 1,739,133.07 3,314,753.08 83

Total Utilized 21,461,328.00 32,537,349.48 53,998,677.48 18,607,816.07 27,901,927.67 46,509,743.74 86*

8 Un Allocated

DA-A Designated Account 2,570,003.83 4,252,186.11

Grand Total 21,177,819.90 32,154,113.78 53,331,933.68 99

* is justified by SoE. Note:- On top of disbursements stated above, USD 3,786,463.12 and USD 4,000,000 has been utilized from GoE and community contribution, respectively. Source: FPCU Finance unit

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Status of project fund disbursement by regions (Birr and USD$), as of June 2008 Region Disbursed amount Expenditure amount %

expended Birr USD Birr USD Somali 158,815,640.90 16,372,746.48 151,569,003.21 15,625,670.43 95 Afar 113,945,507.45 11,746,959.53 108,323,769.77 11,167,398.94 95 Oromiya 88,834,682.31 9,158,214.67 85,006,459.12 8,763,552.49 96 SNNPR 36,982,967.17 3,812,676.41 30,710,056.98 3,165,985.26 83 Total 398,578,797.83 41,090,597.09 375,609,289.08 38,722,607.12 94

Note:- The convertion rate is 1USD= 9.7 Birr Source: FPCU Finance unit

MAJOR FACTORS AFFECTING PROJECT PERFORMANCE Despite the successes and remarkable achievements, the project faces a range of serious constraints and challenges in the process of implementation for the last five project years. The challenges and constraints faced the project are summarized and presented below.

Sustainable livelihoods Enhancement (SLE) The core principles of Sustainable Livelihood Enhancement Approach are it is (1) people centered; (2) multi-sectoral; (3) conducted in partnership ;(4) responsive and participatory; (5) flexible and recognizing dynamic nature of livelihoods; (6) sustainable and ensures community ownership. Successful introduction of CDD principles require a substantive change in attitude and way of operating within government services. This means there is a need for greater vertical integration of information flow and decision-making within government agencies. In terms of addressing the above principles, interventions were undertaken in a smooth way in the first year 10 woredas, the MST operations were more facilitating and backed-up with intensive field visits to target beneficiaries. Later on, in the second year and more in the third years of the project, competition for resources intensified among the existing and newly selected woredas, which was the result of misunderstanding of CDD approach which ultimately led to a certain extent to violation of the principles and shortfall of project fund. In fact, the fund transfer and utilization rates were proving that the project’s approach and principles were getting acceptance. Despite this, the absence of physical and financial planning of PCDP resources in the local government plans by aggregating the CAPs and violation of the CDD procedures, elite capturing, dictatorial decision making, creation of turnkey projects in conjunction with lack of capacity on PM&E and poor M&E of the project, resulted in many of the community sub-projects to remain uncompleted and PCDP to be subjected to shortage of fund. The Community Investment Fund (CIF) has been channeled through the woreda to the kebeles and is intended to fund sub-projects generated by teams within the community, together with risk mitigation strategies, agreed through wide community consultation. This being the case, there are some community sub-projects designed, without the wide facilitations and consultations of the targeted communities and proposals were started to be generated by the woreda administrators and above all the designs and implementations were concentrated on construction of basic social infrastructures with jeopardized and limited interventions on Income Generation Schemes (IGS) with almost insignificant efforts of facilitating communities to create demands on livestock production, marketing and conservation of natural resources and rangeland development.

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Moreover, the little efforts exhibited to initiate IG schemes were not based on concrete application procedures and most of the IG groups lack appropriate individual saving & credit mechanisms among the beneficiary members and there was no clear mechanism for sharing dividends. In addition to this, most of the grants allocated to communities are not supported by mandated sectors at all levels and never been communicated with respective regional Micro Finance Institutions, Cooperative Promotion Agencies at different levels as well as Small and Micro Enterprise Development Enterprises, which make their sustainability in question. The capacity building trainings for both woreda staff and community in some regions were not need based especially in terms of training Traditional Birth Attendants (TBA), Community Animal Health Workers (CAHW), Pastoral Community teachers (PCT), Artisans, range technicians, grain mill operators, repair and maintenance of pumps, carpentry, masonry, with support from the project for rendering the services, etc at Kebeles Development Center (KDC). In fact, the prerequisite of establishing KDCs for housing Community Workers was overlooked and most efforts were not systematic based on the PIM but it can be safely said that it was almost spontaneous. And hence, the creation of skilled manpower for operationalizing the infrastructures was very minimal. The involvement of regional sector bureaus in applying their mandates for the functionality of completed basic social structures was negligible. Consequently, out of the completed some of them are not functional. Moreover, there was a big misunderstandings among the project staff ranging from federal down to woreda level that, the implementation of SLH component was almost dominated by CIF without due consideration of the other sub-components -staff and community capacity building, support services-showing once again the absence of bottom up physical and financial planning aggregation prior to fund release. It is obvious that, community and woreda staff trainings are so important for the successful implementation and sustainability of projects. Previously, woreda staff and community based service trainings were considered the mandates of RPCUs whereas staffs trainings and TOTs were centralized at FPCU. However, RPCUs are complaining that both trainings were centralized and as a result of this it was so difficult to deliver community trainings independently, a misunderstanding was created as the result of poor project communication. Many efforts were made to implement the support services that many equipment supplies (vehicles, motorbikes, radio, tractors, balers, etc) and construction of offices. There were in some instances complaints in the selection of the established KDCs locations from the centrality point of view. Moreover, the little efforts made by some regions to create the nucleus of public service delivery through the community workers with required services as the KDC was not properly established. This also hindered the contribution of these pastoral development coordination bodies to undermine CDD principles and working modalities that in turn created absence of sense of ownership by each sector agencies. As the result, the PDOs (Commissions) made little efforts to coordinate the other sector bureaus to actively integrate their efforts and resources with PCDP and the pastoral communities. Also no logistic support was given to these organizations in order to strengthen their role in monitoring and evaluation activities as well as oversee project performances. In fact, PCDP had made little effort to institutionalize and create capacity of Monitoring and Evaluation in a participatory way with government sectors at all levels.

Pastoral Risk Management The risk management component has been lagged behind achieving its expected plans during the last project life due to restructuring of Disaster Preparedness and Prevention Commission (DPPC) into Disaster Preparedness and Prevention Agency (DPPA) which brought changes in the mandate

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of the former Disaster Preparedness and Prevention Commission to lead the role of this task as stipulated in the PCDP PIM. Later on, the Ministry of Federal Affairs and the Federal Project Coordination Unit in cooperation with Regional Disaster Preparedness and Prevention Bureaus took the lead to accomplish the task. Though promising changes are being currently registered in bringing this component to its right direction, the major problems related to this component were:

Absence of clear mandate and responsibility to host the component as well as smooth communication between DPPA and the project;

Absence/Delay of well established pastoral early warning system; Delay of woreda level Disaster Preparedness and Contingency Plans preparation; Absence of DPCF utilization manual and lack of clear demarcation between CIF and PRM sub-

projects; Implementation of DPCF in the absence of its implementation manual; Confusion on institutional arrangements of early warning system and DPCP implementation; Very poor attention given to the component against its great importance for the pastoral

community; Unbalanced project diversification and focus as well as concentration on capital investment

projects through CIF sub-component and capacity building; Absence of awareness creation and capacity building trainings for both PCDP Pastoral Risk

Management (PRM) staffs and stakeholders; and Above all, restructuring of DPPC into DPPA and lack of coordination with DPPA and regional

Disaster Prevention and Preparedness Bureaus. Project Support and Coordination a) Communication Strategy Communication is an all-embracing activity that defines all aspects of relationship between PCDP and its internal and external stakeholders. Communication ensures transparency and accountability. The way the project office reports, evaluates, communicates and promotes its activity, objectives as well as achievements and failures are important for its success. It has been observed that the communication strategy of the project was unsystematic and weak, not only externally with government structure but also amongst the staff of the project coordination units. Moreover, PCDP was not able to benefit from the latest information technology for most of its five years time. Even the attempt made to develop Management Information System (MIS) to enable FPCU, RPCU and project woredas to have exchange of information was not successful. b) Participatory Monitoring & Evaluation (PM&E) A participatory monitoring and evaluation system was developed for the project with the help of local consultants. The PM&E system was expected to play a central role in PCDP and to be responsive to the end users and their realities on the ground. The system requires the involvement of all relevant stakeholders (primarily community members, their leaders, government staffs, NGOs and private sectors representatives). However, it was not properly implemented as expected, and as a result the intended objectives were not achieved as required. On top of that, there was no uniform reporting format, and hence regions were not reporting project performance as they are expected to do so. There was an attempt at the later time to develop a Management Information System (MIS) that can facilitate a smooth information flow between regions, and with FPCU, but not implemented as planned.

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c) Policy Reform and knowledge building on pastoral development The following two problems can be drawn from last phase performance of the sub component:

The activities were improperly centralized and there was a weak linkage between FPCU as well as RPCU with Federal and Regional research institutions; and

There was lack of quality in some studies sponsored by the sub component d) Financial Management PCDP follow decentralized financial management. It supports the regional governments to decentralize by financing at woreda and kebeles levels. During the last five years PCDP follows this principle. However, there was poor coordination and limited transparency on fund allocation, delay in fund allocation and release, as well as lack of accountability at woreda level. There was also absence of mechanisms for cross-checking on SoEs sent to FPCU for replenishment, weak or absence of internal auditing, lack of integration between the financial and physical reporting mechanisms, leading to poor control on fund utilization. e) Procurement and Resource Management Pastoral Community Development Project (PCDP) interventions are designed to empower pastoral communities to administer development in their areas. To this end, PCDP is going through the process of decentralization by channeling substantial resources directly to Woreda administrations. These types of self-management of own resources, through CDD approaches, created an opportunity in terms of community participation and enhancement of local decision on utilization of development resource for pastoral Communities in Afar, Somali, Oromia and SNNP Region at woreda and kebele level during the last Five years. However the CDD approach, as accompanied by Participatory Learning and Action, has been misunderstood and implemented in some woredas of Somali Region whereby the woreda administration officials erroneously used their power by violating the mandate of the community to participate, negotiate, control and use resources for community’s best interest. In this regard, few remote and insecure woredas in Somali region left uncontrolled under the existing fiduciary system which eventually resulted in declaration of misprocurement. The unbalanced implementation status of the two main components CIF versus DPCF tilted in favor of CIF during the four years of the project period, which created backlog of triggered activities on the DPCF component. FPCU, during its endeavor to fulfill the component’s trigger, carried out urgent recruitment of consultants to develop disaster preparedness and contingency plan at least in two third project woredas, by overlooking standard procurement procedures for selection of consultants. However, during post procurement review, rationales for deviation from the procurement procedures in the selection of consultant was found un-acceptable by the World Bank and declared mis-procurement which resulted in the cancellation of that portion of contract from the grant and reimbursement of payment executed to IDA. The respective government body on behalf of the project has taken appropriate action. Accordingly: For misprocurement findings of the World Bank from four woredas of Somali Region, appropriate legal actions have been taken up on wrongdoers. Following the World Bank’s misprocurement declaration on four woredas of Somali Region, FPCU has also written a letter to the Regional State to suspend ongoing activities until mitigation plan being in place. Regarding misprocurement declared at FPCU level, appropriate legal action is on process. And the government is taking action to reimburse the amount request by the World Bank.

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Insufficiency in capacity building efforts at woreda & regional level has aggravated the harmful consequences that ended up in cancellation of about 190,000 USD from grant and reimbursement of expenditure due to misprocurement. During various procurement capacity assessment made by World Bank’s Supervision Mission and annual post procurement reviews, capacity building in procurement areas has been frequently recommended to minimize a highly rated procurement risks in implementing PCDP II. LESSONS LEARNED The following pertinent issues can be cited as a learning ground for future interventions.

The project follows a challenging approach, Community Driven Development Approach. It has been observed that the approach is well working and adopted the circumstances of pastoral communities and hence ensures efficiency and sustainability of the project. It created self reliance and built confidence among the community to undertake their own development initiatives. Nevertheless, more decentralization and developing decision making power to the community best works with CDD approach. On top of that, a continuous capacity building activities needs to be undertaken for the respective community to ensure the adoption and sustainability of grass roots development.

It has been also found out that the Community Driven Development Approach (CDD) required a clear and committed share of responsibilities among the different stakeholders of the project. In this regard, much effort is expected to be accomplished in the future.

Provision of basic social and physical infrastructures and services contribute for reducing the problems in the pastoral areas. Availability of water, school, human & animal health services have proved to show positive impact on the development and creation of permanent settlement areas around these schemes. The development of such kind of schemes could be still a priority area for the project up on the will and interests of the community.

Income Generating Schemes supported by the project brought a concrete out come for the intended beneficiaries in the first phase of the project. Still these activities are valid in the future but with certain modification on their institutional setups. They need to be more formal to properly addressed, supervised, monitored, as well as to make them more effective in line with the intended objectives. One problem in the first phase of the project was mix up of community and inter-community projects, and between CIF and DPCF sub projects. As a result, some regions have got a problem to clearly indicate sub-projects supported by CIF and those supported with DPCF. There is therefore, a need to clearly isolate activities supported by each of these two funds.

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ANNEX 8. COMMENTS OF COFINANCIERS Not Received.

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ANNEX 9. LIST OF SUPPORTING DOCUMENTS World Bank Documents PCDP 1, Project Appraisal Document, Report No. 25227-ET, April 22, 2003. PCDP 2, Project Appraisal Document, Report No: 43472-ET, May 5, 2008. PCDP 1 Development Credit Agreement, June 12, 2003. PCDP 1, Amendment to the Development Credit Agreement, November 11, 2005. PCDP 1, Amendment to the Development Credit Agreement, September 20, 2006. PCDP 1Amendment to the Development Credit Agreement, September 18, 2007. PCDP 1, Aide Memoire and Back-to-Office Reports of Implementation Support Missions, FY03-FY09. PCDP 1, Implementation Status Report, Number 1-13, October 22, 2003 to December 24, 2008. OPCS, Guidelines for Implementation Completion and Results Report, August 2006. Quality of Economic and Sector Work Assessment FY01, September 6, 2001. Sixth Quality at Entry Assessment, July 23, 2003. PCDP Post Procurement Review Report (Somali Region), January 2007. Government Documents PCDP 1 Draft Implementation Completion Report, March 2009. 2007/2008 Second Quarter Progress Report of PCDP Activities, January 2008. 2006/2007 Third Quarter Financial Management Report, April 2007. 30 Months PCDP Development Activities Progress Report, MTR, May 2006. Project Performance Monitoring and Evaluation Report, MTR, FPCU, April 2006. Final Report on the Assessment of Income Generating Activities Financed during Phase 1 of the PCDP, Ministry of Federal Affairs, May 2008. Windows of Progress Enlightened in the Implementation of Phase 1 of the PCDP, Ministry of Federal Affairs and FPCU submitted to the Ministry of Finance and Economic Development, August 2007. Other Documents Beneficiary Assessment of Phase 1 Implementation of the PCDP Final Report, B&M Consultants PLC, May 25, 2007. Review and Evaluation of CIF and DPCF, B&M Consultants PLC, August 2007. Customary Pastoral Institutions Study, Ann Muir, March 2007. Ethiopia Country Programme Evaluation, International Fund for Agricultural Development (IFAD), June 2008. Pastoralist Forum Ethiopia, Japan Social Development Fund, Progress Report, August 2006. Pastoralist Forum Ethiopia, Japan Social Development Fund, No-cost Extension Plan, September 2008. Pastoralist Livelihood Initiative, Impact Assessment of Emergency Livestock Feed Supplementation in Southern Ethiopia, USAID, July 2008. Pastoral Policy Gap Analysis, PCDP, WABEKBON Development Consultants PLC, July 2007. Participatory Monitoring and Evaluation System, Patta Scott-Villiers and Tom Hockley, February 2003. Environmental Assessment Management Framework for PCDP, Environmental Resources Management, Washington DC, January 10, 2003. Ethiopia PCDP Operational Review of PCDP in Somali Region, Garry Smith, June 2007.

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