## IMF Capacity Development State of Play — D4D Fund Steering Committee (June 6th, 2023)

## Source details

**Canonical URL:** [IMF Capacity Development State of Play — D4D Fund Steering Committee (June 6th, 2023)](https://www.imf.org/-/media/files/capacity-developement/d4d/june-2023/10-cd-state-of-play-2023-d4d-fund-scm.pdf)

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### Key messages
- Execution rates of budgets are projected to be back to pre-pandemic levels (FY23).
- Strong CD demand expected, particularly given increased program activity (including RSF) and Ukraine reengagement (FY24 outlook).
- Full budget utilization anticipated for FY24 but downside risks exist.
- Increased shares of MCD and APD countries in total CD delivery expected; work on major thematic areas dominates with enhanced focus on priority areas.
- Budget utilization remains difficult to predict due to evolving delivery patterns, timing and nature of new programs; some uncertainty remains.

### FY23 CD delivery and thematic focus
- CD delivery continues to focus on Fund core areas and traditional recipient groups.
- FY23 CD Spending by Major Thematic Area: (share of total CD delivery spending, percent) — figures represented in source slides.
- FY23 CD Spending by Income Group: (share of total CD delivery spending, percent) — figures represented in source slides.
- IMF CD delivery by modality, FY22-23: percentage share of total outturn — figures represented in source slides.

### Fundraising and resourcing
- External fundraising from established and emerging partners reached an exceptionally high $467million in FY23 (including firm commitments and pledges/MoU to be signed in FY24).
- Determined fundraising efforts will be required to cover multi-year budget envelopes for vehicles and cross-cutting initiatives starting new phases in the years ahead.

### Delivery in transformational and priority areas
- CD Delivery in Priority Areas, FY23-24 increased; source reports growth in transformational areas.
- Transformational areas to be integrated across CD portfolio: climate change, gender, digitalization, and renewed focus on support for FCS.
- The Resilience and Sustainability Trust (RSF) is a new element of the climate strategy; Capacity Development is an essential component of the RSF.
- Mainstreaming gender in macroeconomic analysis and policy is highlighted as filling an important gap in the global agenda.
- Increasing demand for CD related to digitalization, including Central Bank Digital Currencies (CBDCs), tax collection, revenue administration, and G2P transfers.
- Planned allocation of 30 additional LTX to FCS through internal and external resources to expand field presence and tailored support to FCS.

### FY24–26 workplans and spending outlook
- CD Delivery Spending by Major Thematic Area, FY22-26 (in millions of USD) — projected distribution reflects concentration in core areas with the following percentage pattern shown in source slides: 44% 17% 15% 15% 5% 4%.
- As the impact and recovery from the pandemic on member states linger, CD will continue to address near-term vulnerabilities and long-term crisis damage while beginning to refocus on Fund core areas.
- Effective CD will depend on adaptive delivery (including through hybrid or blended modalities) and improved coordination between CD departments, AD country teams and RCDCs.
- Insights from Regional Strategy Notes: addressing post-pandemic challenges remains a priority, with major thematic areas as key.

### Competing pressures and considerations
- Dynamics:
  - New facilities and rising program requests intensifying new demands in Fund core areas.
  - Reinforcing debt sustainability is a critical priority.
  - Surveillance and lending objectives also emphasize importance of transformational areas (FCS, climate, digitalization, gender, governance, etc.).
- Considerations:
  - Ukraine: when, where, how, and how much?
  - Priority given to program countries and FCS.
  - Continue to match external funding with demand.
- Expectations:
  - A ramp up in climate support related to RSF is expected.
  - Strong demand in major thematic areas draws on the same resources.

### Monitoring, evaluation, and results measurement
- Evaluations of CD aim to foster learning, enhance accountability and ensure IMF’s compliance with fiduciary oversight and responsibility.
- Evaluations assess relevance, coherence, effectiveness, efficiency, impact, and sustainability of CD interventions (OECD-DAC Criteria).
- CD evaluations are becoming shorter and more focused on issues of wider applicability and lessons learned rather than processes.
- A Pilot Thematic Evaluation covers AFW2, CAPTAC-DR and ATI in one joint in-depth evaluation focused on tax revenue administration and customs administration to obtain more specific and useful lessons for RCDC CD delivery.
- 23 subaccounts undergo an independent, mid-term evaluation of CD every 3-5 years.
- Key elements of IMF's M&E:
  - RBM embedded with a new monitoring and management tool (CDMAP) to plan and monitor inputs, outputs, and outcomes of CD.
  - Project assessments by the capacity development departments.
  - External evaluations of CD.
- Status indicators from FY2021-23: Ongoing*, In pipeline FY24-25, Completed FY2021-23 (counts illustrated in source slides).

### 2023 Capacity Development Strategy Review
- Seeks to further increase the impact of Fund CD and address recommendations that emerged from the 2022 IEO Evaluation; builds on the 2013 and 2018 CD reviews.
- Guided by an Externally Advisory Group, inter-departmental working groups, background papers, and outreach to recipients and providers. The review process started in 2022 and will be carried out through 2023.
- Pillars of the Capacity Development Strategy Review:
  - What? Ensuring the size, composition, and funding of CD is in line with the proposed strategic framework.
  - How? Modernizing CD Delivery.
  - Why? Enhancing the strategic and Prioritization Framework of CD.
  - To what effect? Assessing Effectiveness and impact of CD.

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_Source: https://www.imf.org/-/media/files/capacity-developement/d4d/june-2023/10-cd-state-of-play-2023-d4d-fund-scm.pdf_