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Introduction to the Performance Based Allocation System

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Allocation Process and Variables IFAD similar to best practices in other IFIs and Funds that use a performance-based allocation system. – PowerPoint PPT presentation

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Title: Introduction to the Performance Based Allocation System


1
Introduction to the Performance Based Allocation
System
Smallholder Agriculture as a Business Legal
Dimensions of Building Inclusive Value Chains
April 2011
2
PBAS Objectives
  • to have a transparent rules-based approach to
    resource allocation
  • to provide a performance incentive for member
    countries, particularly in regard to the quality
    of policies and institutions in the rural sector
    and,
  • to allocate resources according to need when
    countries perform equally well.

3
Decisions Taken and Progress Made
  • Feb 2003 Governing Council approves the
    Consultation Report including the establishment
    of PBAS
  • Sep 2003 EB approves the operational framework)
  • April 2005 EB approves first set of loans and
    country grants developed under PBAS
  • Feb 2006 Governing Council approves Consultation
    Report for the uniform system of allocation
    across the lending programme beginning with the
    2007 programme of work
  • April 2006 EB approves modification in weight
    given to population and introduction of rural
    population and,
  • April 2007 EB approves introduction of Debt
    Sustainability Framework (DSF).

4
Countries Included in Allocation Periods
  • 2005-07 119 countries (36 minimum allocation)
  • 2007-09 90 countries ( 9 minimum allocation)
  • Active countries where IFAD expected to have
    new lending or DSF grant operations in
    2007-2009
  • PBAS 3 year allocation period aligned to
    Replenishment period
  • 2010-12 115 countries (26 minimum allocation)
  • Use of country-specific grants for knowledge
    management
  • Portfolio 240 ongoing projects under
    implementation in 93 member recipients.

5
Allocation Process and Variables
  • IFAD similar to best practices in other IFIs and
    Funds that use a performance-based allocation
    system.
  • Variables that are common to almost all IFI
    formulae
  • Needs variables
  • Performance variables
  • Each year country scores updated and allocations
    revised
  • October 2010 analysis for the calculation of
    2010 country scores and the allocations for 2011,
    2010 allocations frozen, 2012, indicative
  • Applied to all lending programmes, DSF eligible
    countries and all country-specific grants.

6
Application of PBAS formula
  • PBAS derivation of country scores
  • PBAS allocation process

Allocations take into account DSF.
7
Evolving practices of other IFIs
  • Introduction of new countries final year of the
    allocation period limited number
  • Set-asides the need for financing for fragile
    states
  • Minimum and maximum allocations review the
    levels of the annual minimum and maximum
    allocations and,
  • Reallocation examine the modalities for
    reallocation of unused funds in the final year of
    the allocation period.

8
Rural Sector Performance Score Process
  • Common scoring form used in rating performance
  • Analyze country-level information on the five
    topics covered
  • Measure significant changes from year to year
  • Establish a score for each indicator
  • Indicators scored on 6 point scale (6 as
    highest).
  • RSP Score equals un-weighted average of the
    average rating for each of the 12 indicators
    (three or four sub-indicators for each
    indicator).
  • Individual country ratings reviewed by the
    regional division to ensure consistency of
    results and process employed.
  • IFAD-wide review of scores based on statistical
    analysis undertaken to identify outliers,
    anomalies and promote uniformity across countries.

9
Rural Sector Clusters and Indicators
  • A. Strengthening the capacity of the rural poor
    and their organizations
  • (i) Policy and legal framework for rural
    organizations
  • (ii) Dialogue between government and rural
    organizations
  • B. Improving equitable access to productive
    natural resources and technology
  • (i) Access to land
  • (ii) Access to water for agriculture
  • (iii) Access to agricultural research and
    extension services
  • C. Increasing access to financial services and
    markets
  • (i) Enabling conditions for rural financial
    services development
  • (ii) Investment climate for rural businesses
  • (iii) Access to agricultural input and produce
    markets
  • D. Gender issues
  • (i) Access to education in rural areas
  • (ii) Representation
  • E. Public resource management and accountability
  • (i) Allocation and management of public resources
    for rural development
  • (ii) Accountability, transparency and corruption
    in rural areas
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